Change for MATS

Only two months after he moved into his job, Civil Aeronautics Board Chairman Whitney Gillilland last week took a step that was long overdue. In the first clear sign that Gillilland intends to supply CAB with a new brand of leadership, CAB scrapped the cut-rate charter fares charged by nonscheduled and scheduled airlines flying for the Air Force's Military Air Transport Service, biggest U.S. airline; CAB said that the low fares will be replaced by higher, published tariff rates, with a reasonable margin of profit. This removes the position of privilege that has enabled many nonskeds to grab MATS' business, will transfer much of the military personnel and freight now flown under charter for MATS to the scheduled airlines.

Beginning during the Korean war, when certificated airlines operating in the Pacific did not have the capacity to meet the tremendous increase in military airlift requirements, CAB granted special rate and other economic exemptions to lines flying charter contracts for MATS. At cut-rate prices established by competitive bidding, nonskeds got the right to fly to given points regardless of the regular carriers already certificated on the route. The effect, CAB now concedes, was to develop "what amounts to an overlapping air transport system."

In their scramble to get some of the MATS business, many fly-by-night airlines made low bids--sometimes even taking a loss. Airlines have successfully bid for MATS charters, then had to go out and buy or lease their first planes. Losing out to the low-priced nonskeds, scheduled U.S. lines found themselves making money-losing bids to win MATS contracts. The competitive bidding used by MATS, said CAB, "is not conducive to sound economic growth and development of air transport capability." During the past five years, MATS spent some $300 million for international, overseas and Alaskan air transportation, all of it outside the regulatory system established by CAB. By scattering its business among so many airlines, MATS has neither enabled nonscheduled airlines to buy newer planes nor encouraged the bigger airlines to buy the turboprop cargo planes MATS says it needs.

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