Truce but No Peace

The transatlantic rate war between Britain and Pan American's Juan Trippe was halted last week by an uneasy truce. The terms of the truce were British. But the victory was partly Trippe's. The British will permit U.S. airlines to fly from New York to London 14 times a week (CAB promptly divided the flights evenly between Pan American Airways and American Overseas Airlines). But there were strings attached: U.S. airlines must charge $375 each way, $100 more than Pan Am wanted to charge. And U S. lines could not carry more than 500 passengers a week each way.

The limitation on passengers was Britain's means of effecting in practice what the U.S. had turned down in theory at last year's Chicago air conference. The British wanted to limit the total seating capacity on any international route to a level only slightly higher than the actual demand for seats. Thus Britain's BOAC would be assured a share of the business.

At present, the limitation will not hurt U.S. companies. Their DC-4s cannot carry more than 500 passengers weekly. But Pan Am and American expect to get bigger Constellations in the next few months. If the limitation is still in force, they will then be forced to fly some of their planes partly empty. Passengers who want to fly will have to pay higher rates and travel on BOAC's obsolescent Clippers. U.S. airmen hoped that the limitation would be temporary, and would be lifted when the North Atlantic Conference of the International Air Transport Association meets in New York Jan. 8. But the British said nothing about a time limit.

In any case, Pan Am had forced a whacking reduction in transatlantic fares (from $572). It had also dramatized the question of whether U.S. airlines shall let free competition or I.A.T.A. fix minimum fares on transatlantic routes,

American Overseas Airlines had teamed up with the British to get I.A.T.A. so recognized. But they may have gone too fast. Last week the Civil Aeronautics Board was still trying to decide whether it would permit American to take part in I.A.T.A.'s rate-fixing conference.

Pan Am, still firm against fare fixing by I.A.T.A., had certainly won popular support. It had proved that free competition would bring lower fares than any I.A.T.A. devised cartel plan.

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