Jungle Warfare

In Central and South America, U.S. airlines were again bristling over an old but appetizing bone: domination of the strategic Latin American air routes.

The challenger, as usual, was swashbuckling TACA Airways S.A. For three years, TACA has worried the South American flanks of overdog Pan American Airways Corp., and has won permits to operate in such Pan Am territory as Brazil and Venezuela. Pan Am has pretended not to notice these nips. But fortnight ago it wheeled, announced that it was setting up affiliated companies in TACA's boneyard --Panama, Nicaragua, Honduras, and tiny Costa Rica.*

Last week, TACA's square-jawed President Lowell Yerex gave bite for bite, came up with a new permit to operate in Colombia. TACA de Colombia will be a TACA affiliate, owned 45% by the parent company and 55% by Colombians. Operating in the pack-mule fashion that made it in 1942 the world's No. 1 freight flyer, the Yerex airline will pit two Douglas DC-2 1/2s (DC-2s with DC-3 wings, double doors and reinforced bottoms) and a twin-engine Beechcraft against Pan Am's deluxe equipment. If it needs more money and talent than it has, TACA can draw from big, rich Transcontinental & Western Air, Inc., which owns 29% of TACA stock.

Biggest Pan Am thorn is that, bit by bit, TACA may gather the operating rights to knit its South American system together. A new TACA affiliate is getting under way in Paraguay, and one is on paper in Argentina, awaiting more favorable diplomatic weather. Unless TACA loses its market--South & Central America's need for a poor man's airline--more are likely to follow.

* In each company Pan Am will own 40% of the stock, the Government of the country in which the line operates will own 20%, and native investors the remaining 40%.

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