Regulatory Statesmanship

For the "last great frontier of airline expansion," a CAB examiner recommended last week that National and Delta get new transcontinental routes across the southern tier of states. To National go routes from Florida to California; Delta will fly from Atlanta to California.

The recommendations are a blow to American. Eastern, Braniff and TWA, which had also applied. In his decision, Examiner Edward T. Stodola noted that these new routes are "the last great opportunity for some real regulatory statesmanship." But other airlines questioned Stodola's idea of statesmanship. The reason he settled on National was that it is the least well off of the applicants.

CAB has followed this policy of granting rich routes to ailing lines before, hoping to cure their trouble. But it has not always worked. Four years ago, CAB allowed Northeast to join Eastern and National on the blue-ribbon New York-Miami run. For the two lines the route had been profitable, but when Northeast also began flying it, all three lines suffered. National was $1,000,000 in the red during the past nine months.

For the new routes, National--the nation's seventh-ranking airline--lacks the aircraft needed. It will probably find it difficult to raise the cash for new planes. Delta Air Lines, the sixth largest U.S. air carrier, is well fixed. But oddly enough, since hustling Delta is stronger, it got the less attractive routes. Its routes start in Atlanta and branch out only after Albuquerque to San Francisco and Los Angeles, while National's net starts in Miami, spreads out from Houston to Los Angeles and San Francisco. Stodola's recommendations must be acted on by the full CAB. The rebuffed carriers plan to fight them.

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