The Great Air Race

Now, almost everyone with wings is trying to get into the great transpacific air race. Scarcely had Japan Air Lines secured the right to fly across the U.S. while circling the globe than, last week, American Airlines asked the Civil Aeronautics Board for permission to extend its service across the Pacific to Hawaii and on to Tokyo. "It is one of the most important route applications in the company's 40-year history," said American President Marion Sadler, who announced the move and posed for photographs while suitably flanked by two regularly employed Oriental stewardesses.

American has plenty of company in its quest to become the third U.S. airline (after Northwest and Pan Am) to span the Pacific. Eastern, Western and Continental have made similar applications to the CAB. United, which already flies to Hawaii, intends to ask for an extension to Tokyo. Delta and TWA will probably also put in bids.

Foreign Encroachment. What the carriers are fighting for is a share in the world's fastest growing air-transport market. The volume of air traffic between Japan and the U.S. has nearly tripled in five years, in part because of the deepening U.S. involvement in Viet Nam. The U.S. airlines are also struggling against foreign encroachment on their domestic business. Japan Air Lines' new rights, says American's Sadler, are "the latest in a long series of moves that have changed completely the role between domestic and international carriers. Years ago, the international carriers served the coastal cities of the U.S., exchanging traffic with their domestic counterparts. Now the U.S. is a lattice work of international carriers lifting traffic directly across the country and from key markets in the heartland to overseas points--and domestic carriers are the losers."

That point is a particularly sore one with American, since it is the only transcontinental U.S. airline that does no business overseas, having given up routes to Scandinavia and West Germany in 1950. "If we had been four times smarter than we were," says American Chairman C. R. Smith, "we might have seen in 1950 what the Marshall Plan would do, and we would have anticipated the European boom." Moreover, American has recently lost out on applications for some lucrative domestic routes, notably Miami-Los Angeles, has added only one major nonstop route, New York-San Francisco, in six years. Says President Sadler: "American has been held to the smallest expansion of any domestic airline."

44 Cities. In the rush for Pacific routes, American's hand is strengthened by the fact that its 44 domestic cities channel 80% of all air traffic between the U.S. and the Pacific. If the CAB approves its application, the airline plans to spend at least $200 million on new equipment--a moderate investment considering that American values the transpacific route at $80 million-$100 million annually.

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