Memorandum Concerning the Trans-Pacific Route Case

[Released January 19, 1961. Dated January 18, 1961]

Memorandum for the Chairman, Civil Aeronautics Board:

After considerable deliberation I have concluded that the recommendations of the Civil Aeronautics Board in the Trans-Pacific Route Case, Docket 7723 et al. should, with minor exceptions set forth at the end of this memorandum, be disapproved.

When I requested in February 1959 that this proceeding be undertaken by the Board, I sincerely hoped that it would be possible at the conclusion of the case to provide greater competition among United States flag carriers in the Pacific.

The study made by the Board is excellent. Much evidence is set forth in support of the Board's recommendations for additional United States flag service on major routes to the Orient. My decision not to approve the Board's principal recommendations is predicated solely on considerations of foreign policy, a responsibility that is mine and which the Board, of course, does not share.

My review of the record in this case persuades me that our foreign relations would be adversely affected were we at this time to add second carriers on our major routes to the Orient. Duplication of service on major routes presently served by a single carrier means inevitably--as history shows--that greater United States flag capacity would be offered. This result is made all the more certain by the advent in recent months of jet service which in and of itself means greater capacity because much larger and much faster aircraft are involved.

Greatly increased capacity--always of considerable concern to other nations engaged in international commercial aviation--should not in my judgment be approved unless traffic forecasts for the routes in question plainly show that the additional capacity can be absorbed without engendering a legitimate fear abroad that United States flag carriers will collect so much of the traffic as to make service on the route by a foreign carrier economically untenable or marginal at best. The evidence in the case at hand, including particularly the traffic forecasts does not establish the circumstances I have described. It is reasonable, therefore, to predict that approval of the Board's major recommendations in this case would unsettle our international relations--particularly with Japan which would be faced with an additional United States carrier on all but one of the now existing four routes from the United States to Tokyo.

For these reasons I have concluded that the Board's major recommendations should be disapproved, but I recommend to the Board that within the next several years it update the evidence in this case and again consider the addition of second United States flag carriers on major routes to the Orient.

The Board in the Mainland-Hawaii part of this case has concluded that another airline--until now a carrier engaged solely in service on the North American continent--should be authorized to provide service between San Francisco and Los Angeles and Honolulu. Due to the advent of Hawaii as a State, the President, under the law, no longer has jurisdiction over service between the Mainland and Hawaii. It would be my hope, however, that the Board would reconsider its decision to authorize additional service between the Mainland and Hawaii by a carrier which heretofore has not been engaged in service over the Pacific. At some future time it may be deemed advisable from every standpoint to add a second United States carrier on the California-Hawaii-Tokyo route. The carrier selected--which would presumably be a carrier customarily engaged in international commercial aviation in the Pacific--should also be authorized to carry local traffic between the Mainland and Hawaii. To do otherwise would be to handicap such a second carrier in terms of its ability to compete with the carrier now serving this route to the Orient, a carrier which already has full traffic rights between the Mainland and Hawaii and which is thus able materially to support its overall route to the Orient.

Those of the Board's recommendations that I do approve are (a) the renewal for an indefinite period of Northwest Airlines' authority to serve Okinawa, Korea, Taiwan, Hong Kong, and the Philippines; (b) the renewal for an indefinite period of Pan American World Airways' authority to serve Japan, Viet Nam, Singapore, Sumatra, Java, Federation of Malaya, Thailand, Burma, and points within India and Pakistan lying north of the twentieth parallel; (c) the amendment of Pan American's certificate to redesignate Australia as an intermediate point and adding Java as a new intermediate point on its South Pacific route; (d) the renewal and amendment of South Pacific Airlines' certificate as recommended by the Board; (e) the amendment of Trans World Airlines' certificate as recommended by the Board; (f) the Board's denial of applications.

DWIGHT D. EISENHOWER