Petition — American Airlines, Inc. v. World Airways, Inc.

Supreme Court brief1977

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Text

Supreme Court, U. $ 7

FILED

MAR 1 1977

MICHAEL RODAK, JR., CLERK

IN THE

Supreme Court of the United States

OcrosEer TERM, 1976

wo. 76-1205

AMERICAN AIRLINES, INC.,

Trans Wort Arr.ines, Inc., Petitioners

Worm Amways, Inc., Respondent

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

DISTRICT OF COLUMBIA CIRCUIT

ALFRED V. J. PRATHER

Ky P. Ewrna, JR.

PRATHER SEEGER DOOLITTLE

Farmer & EwIna

1101 Sixteenth Street, N.W.

Washington, D.C. 20036

Attorneys for Petitioners

American Airlines, Inc.

Trans World Airlines, Inc.

March, 1977

Pumes of Breow 8. Adams Paintizia, Inc., WASHINGTON, D. C.

TABLE OF CONTENTS

Page

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QueEsTION PRESENTED ..............-+0- ps eee 2

Statutory Provisions INVOLVED ..............+see00. 2

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Reasons For GRANTING THE Writ Cocsuluec cuenta bedss 7

I. The Court Of Appeals Decided An Important

Issue Of Federal Law That Should Be Resolved

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II. The Court Of Appeal’s Decision Conflicts With

This Court’s Decisions On Deference To An

Agency’s Interpretation Of Its Own Statute ... 12

ee. 8 ee ce a paead saan tabeesks 15

Appenpix I

Appenpix IT

Appenpix III

TABLE OF AUTHORITIES

Cases :

Alhemarle Paper Co. v. Moody, 422 U.S. 405, 431

SAAR EE ee erry oe se yee 14

Civil Aeronautics Board v. Delta Air Lines, 367 U.S.

I a a aed ok Be a eee 13

Civil Aeronautics Board v. State Airlines, 338 U.S. 572,

SE ae a oe iia tl ale saa 7,8

Columbia Broadcasting System, Inc. v. Democratic Na-

tional Committee, 412 U.S. 94, 121 (1973) ..... 6, 7, 14

Columbia Gas Transmission Corp. v. F PC, 530 F.2d

ey Be Cae Ge BPE on deSconcncsncccacecs 13

Committee For Open Media v. FCC, 533 F.2d 1 (D.C.

Se SE ddbduddsenne ak wedeihessedeceeesesenes 13

ii Table of Authorities Continued

Continental Air Lines, Inc. v. C.A.B., 519 F.2d 944,

Ge Se MIEE. avd cccbinces cc cweteesess 13

Fry v. United States, 421 U.S. 542, 546, n. 6 (1975) ... 14

Johnson v. Robison, 415 U.S. 361, 367-68 >. Se 14

Norwegian Nitrogen Co. v. United States, 288 U.S. 294,

Be GED) gona 6b deka aS ee snes op 0460845 0940008 15

Power Reactor Co. v. Electricians’ Union, 367 U.S. 396,

CF GE kn bk cine £6 dank + bekea Sak daeeeess 15

Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 381

SED ovo snccénanegdenedsecasdvansivaent Punks 7,14

Surgett v. Lapice, 8 How. 48, 68, 70 (1850) ,.......... 15

Trans World Airlines, Inc. v. C. A .B., 128 U.S.App.D.C.

126, 385 F.2d 648, "660 (1967), cert. denied, 390 U.S.

Se EEE Suse bandas osncesdcehaceicsae cheoeeen 6, 13

Udall v. Tallman, 380 U.S. 1, 16 (1965) .............. 14

Unemployment Compensation Comm’n v. Aragon, 329

Sa, Se SEO 56 cv naneaeruckscsd<ssenacies 14

United Air Lines v. C.A.B., 97 U.S.App.D.C. 1, 278 F.2d

446, 448 (1960), vacated sub nom. All American

Airways v. United Air Lines, 364 U.S. 297 (1960).. 12

United States v. American Trucking Association, 310

fe & 2. ear ror rc ee 15

United States v. National Ass’n of Securities Dealers,

go Rh 8 ER ae res omen 14

Zemel v. Rusk, 381 U.S. 1, 11 (1965) ............200.- 14

STATUTES:

Federal Aviation Act, as amended:

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—_— ae ee

IN THE

Supreme Court of the United States

OcToBER TERM, 1976

No.

AMERICAN AIRLINES, INC.,

Trans Worup Airings, Inc., Petitioners

Vv.

Worip Airways, Inc., Respondent

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

DISTRICT OF COLUMBIA CIRCUIT

American Airlines, Inc., and Trans World Airlines,

Inc., respectfully pray that a writ of certiorari issue

to review the judgment and opinion of the United

States Court of Appeals for the District of Columbia

Circuit entered in this proceeding on December 8,

1976.

OPINION BELOW

The opinion of the Court of Appeals is not yet re-

ported. A copy of the slip opinion appears in Appendix

II hereof. The decision of the Civil Aeronautics Board,

which the Court of Appeals reversed, appears in Ap-

pendix ITT hereof.’

JURISDICTION

The judgment of the Court of Appeals for the Dis-

trict of Columbia Circuit was entered December 8,

1976. This petition for a writ of certiorari was filed

within ninety days of that date and is thus timely un-

der 28 U.S.C. § 2101(¢). The jurisdiction of this Court

is invoked under 28 U.S.C. § 1254(1).

QUESTION PRESENTED

Whether the Federal Aviation Act of 1958, as amend-

ed, precludes grant of a scheduled-carrier certificate,

under section 401(d)(1) or (2), to a supplemental car-

rier which continues to hold a supplemental-carrier cer-

tificate issued under section 401(d)(3) of that Act?

STATUTORY PROVISIONS INVOLVED

Section 401(d)(1), (2) and (3) of the Federal Avia-

tion Act of 1958, as amended, 49 U.S.C. § 1371{d) (1),

(2) and (3), is the principal statutory provision in-

volved; it is set forth in Appendix I hereof. Also rele-

vant are sections 401(e) (6), 401(n), 406(b) and 417 of

the Federal Aviation Act, 49 U.S.C. §§ 1371(e)(6),

‘World Airways, Inc. was the petitioner below; intervening on

its side were the City of Oakland, the California Board of Port

Commissioners and the Oakland Chamber of Commerce. The Civil

Aeronautics Board was the respondent below; intervening on its

side were American Airlines, Inc., Trans World Airlines, Inc..

Northwest Airlines, Ine., United Air Lines, Ine., Eastern Air

Lines, Inc., National Airlines, Inc., Pan American World Airways,

Inc., and Western Air Lines.

ee ee

(n), 1376(b) and 1387, which were amended in 1962

at the same time as section 401(d); they are also set

forth in Appendix I hereof.

STATEMENT OF THE CASE

The Court of Appeals ruled that supplemental air

carriers can also be issued scheduled-carrier certifi-

cates. It did so even though the 1962 Amendments of

the Federal Aviation Act, which gave the supplement-

als certificated status, expressly preclude holders of

scheduled-carrier certificates being issued supplement-

al certificates. The Court of Appeals’ ruling reversed

a unanimous Civil Aeronautics Board interpretation

of its statutory powers, and ignored some 15 years of

history, during which no carrier has been permitted

simultaneously to hold scheduled-carrier and supple-

mental-carrier certificates. The practical effect of the

Court of Appeals’s ruling will be to ailow the eight

companies now holding supplemental certificates to gain

scheduled-carrier certificates as well, while prohibiting

the 35 companies already holding schedu!ed-carrier

certificates from obtaining supplemental certificates.

Procedurally, this case arose when World Airways,

Ine. (‘‘World’’), the holder of three supplemental-car-

rier certificates issued under section 401(d)(3) of the

Federal Aviation Act, 49 U.S.C. § 1371(d) (3), applied

to the Civil Aeronautics Board for a scheduled-carrier

certificate under section 401(d)(1) of the Act, 49

U.S.C. § 1371(d) (1), to engage in scheduled air trans-

portation in the New York/Washington-Los Angeles/

San Francisco transcontinental markets. World moved

for an expedited hearing, attaching materials on how

it proposed to operate the routes and the fares it would

charge, and making plain that World would not be wil-

ling to surrender its supplemental-carrier certificates

if granted the requested scheduled-carrier certificate.

Various carriers, including American Airlines, Inc.,

and Trans World Airlines, Inc., argued that the Board

should dismiss World’s application because, as a mat-

ter of law, the Board could not grant ‘‘dual certifica-

tion,”’ i.e., could not allow one company to hold both

scheduled and supplemental certificates. After briefing

and oral argument on this threshold legal issue, the

Board unanimously decided that

‘‘Congress intended . . . to prevent the same car-

rier from simultaneously holding certificates au-

thorizing regular route and supplemental air trans-

portation.’’ (Order 76-1-88, p. 5)

The Board rested its statutory interpretation on the

history leading up to the 1962 Amendments, on the ex-

press language employed in those Amendments to cre-

ate within several sections of the Act a class of certifi-

sated supplemental carriers, and on Congressional ma-

terials accompanying their passage.? The Board found

confirmation of its interpretation in post-enactment

history, as well as in the pre-1962 Board policy against

dual certification (expressly noted in the Conference

Committee Report on the 1962 Amendments). The

Board rejected World’s argument that a ‘‘plain mean-

ing’’ rule required a different result.

On review of the Board’s dismissal of World’s ap-

plication, the Court of Appeals agreed that the issue

could not be resolved by a ‘‘plain meaning”’ approach

(Slip Op. p. 13, n. 8), but reached a statutory inter-

pretation diametrically opposite that of the Board.’ It

* Publie Law No. 87-528, 76 Stat. 143.

* The Court of Appeal’s jurisdiction to review the Board’s order

did so by finding that the ‘‘central objective of the Fed-

eral Aviation Act is to promote regulated competition

.. +,’ that the “‘primary means”’ to accomplish this is

“the certification process,’’ and that it would take “‘ per-

suasive evidence”’ to establish that ‘‘the 1962 amend-

ments were intended to preclude Board consideration

of applications from an entire class of potential en-

trants into the market for scheduled service.’’ (Slip

Op. p. 6). The Court of Appeals read the express pro-

hibition against holders of scheduled-carrier certifi-

cates being granted supplemental-carrier certificates

as evidencing only ‘‘the limited statutory purpose of

protecting supplemental carriers from domination by

regular carriers,’’ (Slip Op. p. 20), and quoted a for-

mer Senator’s words, as a witness-during hearings on

the 1962 Amendments, that the supplementals are ‘‘the

true small businesses of civil aviation.’’ (Slip Op. p.

20, fn.). In this approach the Court of Appeals seemed

oblivious to the fact that World Airways, Inc., is al-

ready a far larger company, measured by the relevant

standard of system revenue passenger miles, than some

15 other companies holding scheduled-carrier certifi-

eates, including such government-subsidized scheduled

carriers as Hughes Airwest, Frontier Air Lines, North

Central Air Lines, Ozark Air Lines, Piedmont Air

Lines, Southern Air Lines, and Texas International

Air Lines.*

The Court of Appeals expressly refused to decide

how the Civil Aeronautics Board could exercise its stat-

rested on section 1006 of the Federal Aviation Act, as amended,

49 U.S.C. § 1486.

*CAB Handbook of Airline Statistics, 1975 Supplement (No-

vember 1975), p. 2, Table 2s ‘‘Comparative Traffic Data [In Order

of Rank] Certificated Air Carriers, System Operations: Calendar

Year 1974.’’

utory responsibility, if the public convenience and ne-

cessity require, to alter or amend World’s three supple-

mental-carrier certificates (which necessitates their re-

issuance) once World holds a scheduled-carrier certifi-

cate. (Slip Op. p. 21, n. 13). And the Court of Appeals

simply presumed that the Board would first consider

the supplemental-certificate application of a truly new

entrant which sought both scheduled and supplemental

authority “‘if the route authorization at stake would

not be significant enough to raise a danger of undue

domination.’’ (Slip Op. p. 21). The Board, in contrast,

had decided:

‘“*... we think it inconceivable that Congress could

have meant that such arbitrary procedural cir-

cumstances should control the fundamental role

that a carrier should play in the air transportation

system.’’ (Order 76-1-88, p. 7).

At no point in its opinion did the Court of Appeals

refer to any deference to be shown by it to the agency’s

interpretation of its own statute. It also made no ref-

erence to the fact that the Board’s interpretation had

previously been presented to the relevant Congression-

al committee, in Board testimony on bills (never en-

acted) to permit dual certification. And while obvious-

ly disagreeing with the unanimous Board’s reading of

its own statute, the Court of Appeals did not attempt

to demonstrate that the Board’s interpretation was ‘‘ar-

bitrary or ecntrary to an ascertainable legislative

will,’’* or that ‘‘there are compelling indications that

it is wrong.’’*®

°Trans World Airlines, Inc. vy. C.A.B., 128 U.S.App.D.C. 126,

385 F.2d 648, 660 (1967), cert. denied, 390 U.S. 944 (1968).

®* Columbia Broadcasting System, Inc. v. Democratic National

Committee, 412 U.S. 94, 121 (1973).

REASONS FOR GRANTING THE WRIT

This Court shou!d exercise its discretionary jurisdic-

tion to review the decision of the Court of Appeals in

this case. The court below has decided an important is-

sue of Federal law that should be finally resolved by

this Court, namely a basic interpretation of the Civil

Aeronautics Board’s authority to certificate classes of

carriers, ‘‘of importance for future guidance of the

Board in carrying out its congressionally imposed func-

tions.’’ Civil Aeronautics Board v. State Airlines, 338

U.S. 572, 575 (1950).

Furthermore, the court below has decided a federal

question in a way in conflict with applicable decisions

of this Court on deference to an agency’s interpreta-

tion of its own statute. Columbia Broadcasting System,

Inc. v. Democratic National Committee, 412 U.S. 94,

121 (1973); Red Lion Broadcasting Co. v. FCC, 395

U.S. 367, 381 (1969).

I. THE COURT OF APPEALS DECIDED AN IMPORTANT ISSUE

OF FEDERAL LAW THAT SHOULD BE RESOLVED BY THIS

COURT.

This Court was previously confronted with a Court

of Appeals’ interpretation of section 401(d)(1) and

(2) of the Federal Aviation Act which was different

from the Board’s on the issue of the latter’s power to

grant routes not expressly applied for. This Court

found that issue worthy of certiorari ‘‘because a final

determination of the questions involved, particularly

those involving interpretation of the Act, is of impor-

tanee for future guidance of the Board in carrying out

its congressionally imposed function.’’ Civil Aeronau-

tics Board v. States Airlines, 338 U.S. 572, 575 (1950).

The issue here—of whether there are to be two sep-

arate classes of carriers, or merely two different kinds

of certificates both of which may be held by the same

company—is of even greater importance, for it goes to

the very heart of the Congressional scheme for econom-

ic regulation of air transportation. In essence, the court

below felt that ‘‘competition’’ would be enhanced by

broadening the class of possible entrants into scheduled

service, whereas the Board believed that Congress had

determined that creation of a separate and distinct class

of specialized companies (the supplemental carriers)

would best promote true competition to serve the pub-

lie.

The importance of this issue is evidenced by the pre-

vious, unsuccessful attempts to have Congress change

the statute to read in part as the court below now inter-

prets it. For example, in 1972, 8S. 2548 was pending in

the 92nd Congress, 2d Session. In testimony before the

Aviation Subcommittee of the Senate Commerce Com-

mittee, CAB Chairman Secor Browne testified :’

**S. 2548 would amend Section 401(d)(3) of the

Federal Aviation Act. That section by its terms

presently precludes scheduled-carriers from hold-

ing supplemental certificates. S. 2548 would delete

the language containing that restriction. .

The real thrust of S. 2548 seems to be in two other

directions. One is to enable supplemental carriers

to obtain scheduled authority. The other is to per-

mit mergers between scheduled carriers and sup-

plementals.

* Hearings on S. 2540, S. 2549, and S. 3513 Before the Aviation

Subcommittee of the Senate Commerce Committee, 92nd Cong., 2d

Sess. (1972).

“ eee. aera tae bel Baws

It’s widely assumed that the Board reads section

401(d)(3) as precluding the grant of a scheduled

route to a supplemental carrier, and as prohibiting

mergers between supplemental and scheduled car-

riers. The Board hasn’t passed on these issues but

for purposes of this testimony, I’ll make those as-

sumptions too.”’

Chairman Browne concluded:

‘*Having two classes of carriers makes our life dif-

ficult, but that is what we think the air transporta-

tion system now requires * * * All these bills pre-

sent basic questions of policy for the Congress. We

stand ready to carry out the decision of the Con-

gress whatever it may be.”’

Congress did not enact the provisions of 8S. 2548 abol-

ishing the distinction between scheduled and supple-

mental earriers Congress’ refusal was in accordance

with the position on the proposed legislation taken by

the Board, as it was then constituted.

In 1975-76, as the current Board pointed out in its

Brief to the court below, legislation was again intro-

duced to amend Section 401 so as to permit ‘‘dual certi-

fication.’’ * CAB Chairman John Robson this time testi-

fied in favor of a statutory change to permit dual cer-

tification. But as World Airways noted in a supple-

mental memorandum to the court below on October 6,

1976, that proposed legislation was not enacted, dying

when the 94th Congress adjourned sine die.

Yet what Congress had refused to do, the court be-

low did in part on December 8, 1976 in its decision in

®* H.R. 10261 and S. 2551, 94th Cong., Ist Sess. noted in Brief

for Respondent, p. 6, as well as S. 3364, S. 3536, S. 3830 and H.R.

14604, 94th Cong., 2d Sess., as noted in World Airways’ Supple-

mental Memorandum of October 6, 1976 to the court below.

this case, permitting companies that first acquire a sup-

plemental certificate to obtain dual certification, but

still denying the opportunity to companies which first

obtain a scheduled certificate.

The continuing importance of the issue is attested by

the Board’s Order 77-1-94, January 14, 1977, which

sets World’s application for hearing in a newly insti-

tuted Transcontinental Low-Fare Route Proceeding,

CAB Docket 30356, that contemplates the filing of com-

peting applications.

That this Court’s future ‘“‘guidance of the Board”’ is

needed can also be seen from the subsidiary questions

raised by the lower court’s interpretation, but not ade-

quately answered by the lower court’s opinion. For ex-

ample, if World’s application for a scheduled-carrier

certificate for a ‘‘transcontinental low-fare route’’ is

granted and the certificate is issued, then World will

be ‘“‘holding a certificate under paragraph (1)”’ of sec-

tion 401(d). At that point, the Board is expressly pre-

cluded by section 401(d)(3) from issuing a supple-

mental certificate to World, yet World’s temporary

certificates must be periodically re-issued under section

401(d)(3), and any alteration or amendment of its

permanent certificates, found required by the public

convenience and necessity under section 401(g¢), must

ultimately result in issuance of a new certificate under

section 401(d)(3). The court below merely noted: ‘‘It

is unnecessary to decide this question, given the posture

of the case before us.’’ (Slip Op. p. 21, n. 13). But the

Board cannot avoid this issue, and this Court’s guid-

ance is needed to help the Board in the future ‘‘in car-

rying out its congressionally imposed functions.’’

Moreover, until resolved by this Court, the Board

must cope with the numerous statutory anomalies that

the court below first refused to recognize but then left

**to the Board, in the first instance,’’ to resolve by ‘‘the

interpretation which will fulfill the purposes of the

Act.”’ (Slip Op. 13). The Board described these ano-

malies as follows:

“*To begin with, Section 401(e)(6) of the Act has

authorized those carriers holding certificates issued

under Section 401(d)(1) or (2) to engage in char-

ter trips and special services without regard to the

points named in their certificates. The 1962 sup-

plemental air carrier legislation amended this sec-

tion to deny supplemental air carriers this author-

ity. Section 401(n) of the Act either authorizes, or

imposes, a number of special requirements relating

to supplemental air carriers that are not applica-

ble to route carriers. These include provisions re-

lating to insurance, minimum service, and ‘‘con-

tinuing fitness.’’ Section 406(b) had authorized the

payment of subsidy for all carriers. That section

was also amended by the 1962 supplemental legis-

lation to preclude subsidy for supplemental air car-

riers. If World were to receive a certificate under

Section 401(d)(1) or (2) and at the same time

was permitted to retain its supplemental certifi-

cate, it would still be a supplemental carrier by def-

inition. The wholly anomalous result would be that

the carrier would at one and the same time be (a)

anted and denied Section 401(e)(6) authority;

b) subject to and not subject to Section 401(n)

requirements; and (c) eligible and not eligible for

subsidy.”’

Unlike the court below, the Board concluded :

‘*We think these sections demonstrate that Con-

gress did not intend to permit the same carrier to

hold both route and supplemental air carrier cer-

tificates. Indeed, no citations are needed for the

proposition that statutes are to be construed to

avoid unreasonable, let alone absurd, results.”’

Finally, regardless of whether the lower court’s in-

terpretation is correct, there can be no question that it

alters a basic element of the statutory scheme for regu-

lating air transportation, far transcends the particular

facts of the present case, and involves continuing prob-

lems in the administration of a key federal statute.

This court should grant a writ of certiorari to settle

the basic question once and for all.

II. THE COURT OF APPEAL’S DECISION CONFLICTS WITH

THIS COURT'S DECISIONS ON DEFERENCE TO AN

AGENCY’S INTERPRETATION OF ITS OWN STATUTE.

The court below showed no deference to the Civil

Aeronautics Board’s interpretation of its own statute,

despite the Board’s unanimous view of a Congression-

al intent diametrically opposite that perceived by the

court below. The unanimity of the Board was under-

scored by the vote of CAB Member Joseph Minetti who

was a member of the Board at the time of the 1962

Amendments to the Federal Aviation Act.

The Board’s role in the enactment of the 1962

Amendments entitled its views to special deference. As

the Board expressed it in its brief to the court below:

‘““This, moreover, is not just another dispute over

— an agency’s construction of its own statute. The

provisions of the statute involved are the 1962

amendments of the Federal Aviation Act by which

Congress undertook to solve the so-called ‘‘supple-

mental air carrier problem.’’ [/nited Air Lines vy.

C.A.B., 97 U.S.App.D.C. 1, 278 F.2d 446, 448

(1960), vacated sub nom. All American Airways V.

United Air Lines, 364 U.S. 297 (1960). The basic

problem was to define the place or role of the sup-

plemental air carriers in the national air transpor-

tation system. The Board had been grappling with

this problem in a massive evidentiary proceeding

instituted in 1951 and concluded eight years later.

Its decision was set aside by two decisions of this

Court, holding ultimately that the Board had ex-

ceeded its statutory power, and it was this which

led to the 1962 amendments interpreted by the

Board in this case.

In sum, what the Board interpreted here was

amendatory legislation specifically directed to a

continuing problem with which it was already inti-

mately familiar from extended experience. More-

over, the Board played a major part in the formu-

lation and development of the legislation. Consid-

ering (1) that “‘statutory language necessarily de-

rives much of its meaning from the surrounding

circumstances’? (C.A.B. v. Delta Air Lines, 367

U.S. 316, 323 (1961), and (2) that the Board has

for so long been so deeply involved in the subject

matter and surrounding circumstances of the leg-

islation, and (3) that legislation is even now pend-

ing in Congress to amend the statute so as to give

the Board clear jurisdiction, this is a most com-

pelling case for keen sensitivity to the principle of

judicial deference to the ageney’s construction.”’

(Brief of the Civil Aeronautics Board in the court

below, pp. 8-9).

Yet the court below showed no deference to the Board’s

decision, and did not even cite a case acknowledging

that it owed such deference.’

*The decision of the court below, giving no deference to the

Civil Aeronauties Board’s interpretation of the Federal Aviation

Act also conflicts with decisions of that court: Committee For Open

The failure of the court below to show deference

squarely conflicts with this Court’s

‘‘venerable principle that the construction of a

statute by those charged with its execution should

be followed unless there are compelling indications

that it is wrong, especially when Congress has re-

fused to alter the administrative construction.”’

Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 381

(1969), quoted in Columbia Broadcasting System, Inc.

v. Democratic National Committee, 412 U.S. 94, 121

(1973). This Court’s insistence on such deference has

been often repeated. See, e.g., Fry v. United States, 421

U.S. 542, 546, n. 6 (1975); Albemarle Paper Co. v.

Moody, 422 U.S. 405, 431 (1975) (‘‘ ‘the administra-

tive interpretation of the Act by the enforcing agency’

is ‘entitled to great deference.’’’); United States v.

National Ass’n of Securities Dealers, 422 U.S. 694

(1975) (‘‘econsistent and longstanding interpretation

by the agency charged with administration of the Act,

while not controlling, is entitled to considerable

weight.’’) ; Johnson v. Robison, 415 U.S. 361, 367-68

(1974), quoting Udall v. Tallman, 380 U.S. 1, 16 (1965)

(‘When faced with a problem of statutory construc-

tion, this Court shows great deference to the interpre-

tation given the statute by the officers or agency charged

with its administration.’’) ; Zemel v. Rusk, 381 U.S. 1,

11 (1965); Unemployment Compensation Comm’n v.

Media v. FCC, 533 F.2d 1 (D.C. Cir. 1976) ; Trans World Airlines,

Inc. v. CAB, 385 F.2d 64%, 660 (1967), cert. denied, 390 U.S. 944

(1968) ; Columbia Gas Transmission Corp. v. FPC, 530 F.2d 1056,

1059 (D.C. Cir. 1976); Continental Air Lines, Inc. v. CAB, 519

F.2d 944, 954-55 (D.C. Cir. 1975) (‘‘particular respect due a ‘con-

temporaneous construction of a statute by men charged with the

responsibility of setting its machinery in motion.’ ’’).

Aragon, 329 U.S. 143, 153 (1946) ; Power Reactor Co.

v. Electricians’ Union, 367 U.S. 396, 408 (1961) ; Unit-

ed States v. American Trucking Association, 310 U.S.

534, 549 (1940); Norwegian Nitrogen Co. v. United

States, 288 U.S. 294, 315 (1933) ; Surgett v. Lapice, 8

How. 48, 68, 70 (1850).

This Court should grant a writ of certiorari to re-

solve the clear conflict between the decision of the court

below and this Court’s decisions requiring appropriate

deference to an agency’s interpretation of its own stat-

ute.

CONCLUSION

For the reasons set forth herein, a writ of certiorari

should issue to review the judgment and opinion of the

United States Court of Appeals for the District of Co-

lumbia Circuit.

Respectfully submitted,

ALFRED V. J. PRATHER

Ky P. Ewrna, Jr.

PRATHER SEEGER DOOLITTLE

FARMER & EWING

1101 Sixteenth Street, N.W.

Washington, D.C. 20036

Attorneys for Petitioners

American Airlines, Inc.

Trans World Airlines, Inc.

March, 1977

APPENDIX

Section 401(d)(1), (2), (3)

(d)(1) The Board shall issue a certificate authoriz-

ing the whole or any part of the transportation covered

by the application, if it finds that the applicant is fit,

willing, and able to perform such transportation prop-

erly, and to conform to the provisions of this Act and

the rules, regulations, and requirements of the Board

hereunder, and that such transportation is required

by the public convenience and necessity; otherwise

such application shall be denied.

(2) In the case of an application for a certificate to

engage in temporary air transportation, the Board

may issue a certificate authorizing the whole or any

part thereof for such limited periods as may be re-

quired by the public convenience and necessity, if it

finds that the applicant is fit, willing, and able prop-

erly to perform such transportation and to conform

to the provisions of this Act and the rules, regulations,

and requirements of the Board hereunder.

(3) In the case of an application for a certificate to

engage in supplemental air transportation, the Board

may issue a certificate, to any applicant not holding

a certificate under paragraph (1) or (2) of this sub-

section, authorizing the whole or any part thereof, and

for such periods, as may be required by the public con-

venience and necessity, if it finds that the applicant is

fit, willing, and able properly to perform the transpor-

tation covered by the application and to conform to the

provisions of this Act and the rules, regulations, and

requirements of the Board hereunder. Any certificate

issued pursuant to this paragraph shall contain such

limitations as the Board shall find necessary to assure

that the service rendered pursuant thereto will be

limited to supplemental air transportation as defined

in this Act.

Section 401(e)(6)

(6) Any air carrier, other than a supplemental air

carrier, may perform charter trips (including inclu-

sive tour charter trips) or any other special service,

without regard to the points named in its certificate, or

the type of service provided therein, under regulations

prescribed by the Board.

Section 401(n)

(n)(1) No certificate to engage in supplemental air

transportation, and no special operating authorization

described in section 417 of this title, shall be issued or

remain in effect unless the applicant for such certifi-

cate or the supplemental air carrier, as the case may

be, complies with regulations or orders issued by the

Board governing the filing and approval of policies

of insurance, in the amount prescribed by the Board,

conditioned to pay, within the amount of such insur-

ance, amounts for which such applicant or such sup-

plemental air carrier may become liable for bodily in-

juries to or the death of any person, or for loss of or

damage to property of others, resulting from the neg-

ligent operation or maintenance of aircraft under such

certificate or such special operating authorization.

(2) In order to protect travelers and shippers by

aircraft operated by supplemental air carriers, the

Board may require any supplemental air carrier to file

a performance bond or equivalent security arrange-

ment, in such amount and upon such terms as the

Board shall prescribe, to be conditioned upon such

supplemental air carrier’s making appropriate com-

pensation to such travelers and shippers, as prescribed

by the Board, for failure on the part of such carrier to

perform air transportation services in accordance with

agreements therefor.

Section 406(b)

(b) In fixing and determining fair and reasonable

rates of compensation under this section, the Board,

considering the conditions peculiar to transportation

by aircraft and to the particular air carrier or class of

air carriers, may fix different rates for different air

carriers or classes of air carriers, and different classes

of service. In determining the rate in each case, the

Board shall take into consideration, among other fac-

tors, (1) the condition that such air carriers may hold

and operate under certificates authorizing the car-

riage of mail only by providing necessary and adequate

facilities and service for the transportation of mail;

(2) such standards respecting the character and qual-

ity of service to be rendered by air carriers as may be

prescribed by or pursuant to law; and (3) the need of

each such air carrier (other than a supplemental air

carrier) for compensation for the transportation of

mail safficient to insure the performance of such ser-

vice, and, together with all other revenue of the air

carrier, to enable such air carrier under honest, eco-

nomical, and efficient management, to maintain and

continue the development of air transportation to the

extent and of the character and quality required for

the commerce of the United States, the Postal Service,

and the national defense. In applying clause (3) of this

subsection, the Board shall take into consideration any

standards and criteria prescribed by the Secretary of

Transportation, for determining the character and

quality of transportation required for the commerce

of the United States and the national defense.

Section 417 (3) shall not be deemed a license within the

meaning of section 9(b) of the Administrative Pro-

(a) If the Board finds upon an investigation con- cedure Act (5 U.S.C. 1008(b)).

— a its own initiative or upon request of an air (c) The Board shall by regulation establish proce-

dures for the expeditious investigation and determina-

(1) that the capacity for air transportation be- tion of requests for such special operating authoriza-

ing offered by the holder of a certificate of public tions. Such procedures shall include written notice to

convenience and necessity between particular air carriers certificated to provide service between the

points in the United States is, or will be, tempo- points involved, and shall provide for such opportun-

rarily insufficient to meet the requirements of the ity to protest the application in writing, and at the

public or the postal service; or Board’s discretion to be heard orally in support of

such protest, as will not unduly delay issuance of such

special operating authorization, taking into account

the degree of emergency involved.

(2) that there is a temporary requirement for

air transportation between two points, one or both

of which is not regularly served by any air carrier;

and

(3) that any supplemental air carrier can pro-

vide the additional service temporarily required in

the public interest; the Board may issue to such

supplemental air carrier a special operating au-

thorization to engage in air transportation between

such points.

(b) A special operating authorization issued under

this section—

(1) shall contain such limitations or require-

ments as to frequency of service, size or type of

equipment, or otherwise, as will assure that the

service so authorized will alleviate the insufficiency

which otherwise would exist, without significant

diversion of traffic from the holders of certificates

for the route;

(2) shall be valid for not more than thirty days

and may be extended for additional periods aggre-

gating not more than sixty days; and

United States Cmat of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 76-1072

WORLD AIRWAYS, INC., PETITIONER

Vv.

CrviL AERONAUTICS BOARD, RESPONDENT

CITY OF OAKLAND, CALIFORNIA BOARD OF

Port COMMISSIONERS AND THE OAKLAND

CHAMBER OF COMMERCE

AMERICAN AIRLINES, INC., ET AL.

NORTHWEST AIRLINES, INC.,

UNITED AIRLINES, INC.,

EASTERN AIR LINES, INC., ET AL., INTERVENORS

Petition for Review of Order of

The Civil Aeronautics Board

Argued April 13, 1976

Decided December 8, 1976

Jerrold Scoutt, Jr., with whom Frank J. Costello was

on the brief, for petitioner.

Robert L. Toomey, Attorney, Civil Aeronautics Board,

wtih whom James C. Schultz, General Counsel, Jerome

Nelson, Deputy General Counsel, and Glen M. Bendizxsen,

Associate General Counsel, Civil Aeronautics Board, were

on the brief, for respondent.

Ky P. Ewing, Jr., with whom Alfred V. J. Prather

was on the brief, for intervenors American Airlines,

Inc., and Trans World Airlines, Inc.

J. Kerwin Rooney, Cecil A. Beasley, Jr., and John

C. Smuck were on the brief, for intervenors City of

Oakland, California, Board of Port Commissioners and

The Oakland Chamber of Commerce.

James M. Verner and Ronald B. Natalie were on the

brief, for intervenor Northwest Airlines, Inc.

Arnold T. Aikens and Michael A. Katz were on the

brief for intervenor, United Air Lines, Inc.

Jerry W. Ryan and Susan A. Elliott were on the brief

for intervenors Eastern Air Lines, Inc., National Air-

lines, Inc., Pan American World Airways, Inc., and

Western Air Lines, Inc.

Before MCGOWAN, ROBINSON, and WILKEY, Circuit

Judges.

Opinion for the Court filed by Circuit Judge McGowan.

McGowan, Circuit Judge: The sole issue in this case

is whether the 1962 amendments to the Federal Aviation

Act of 1958, Pub. L. No. 87-528, 76 Stat. 143, should

be construed to bar the Civil Aeronautics Board from

issuing a certificate for scheduled route authority to an

air carrier holding a certificate for supplemental air

transportation. The Board has so read the statute. We

find such a reading unwarranted, and therefore hold

that the Board should have addressed the merits of an

application for such authority.

On April 2, 1975 petitioner World Airways, Inc., an

air carrier certificated to engage in supplemental serv-

ice within the United States and between the United

States and all foreign points except those in Canada and

Mexico, filed an application with the Board seeking cer-

tification to perform regularly scheduled trans-continental

service between Newark and Baltimore on the East Coast

and Ontario and Oakland, California on the West. World

contemplated a high-density, high-load factor service

utilizing “satellite” airports, with a one-way fare of

eighty-nine dollars per person. However, World indi-

cated that it would not be willing to surrender its sup-

plemental certificates if granted scheduled route au-

thority. On January 23, 1976 the Board dismissed

World’s application without reaching the merits, hold-

ing that the 1962 amendments preclude issuance of a

certificate for scheduled authority to a carrier holding a

supplemental certificate. Docket 27693, Order 76-1-88

(Jan. 23, 1976).

Sections 401(d)(1) and (2) of the Federal Aviation

Act, as amended, govern the certification of scheduled

route authority, that is, authority to provide conven-

tional individually ticketed service. These sections pro-

vide that an applicant must be “fit, willing, and able,”

and that the requested service must be “required by the

public convenience and necessity.”* However, the only

1Section 401(d)(1) controls the award of permanent

authority, while 401(d) (2) governs temporary certification.

These sections provide in full:

(d)(1) The Board shall issue a certificate authorizing

the whole or any part of the transportation covered by

the application, if it finds that the applicant is fit,

willing, and able to perform such transportation properly,

and to conform to the provisions of this chapter and the

rules, regulations, and requirements of the Board here-

eee

express limitation on who may apply for scheduled route

authority is contained in section 401(a), which confines

eligibility to “air carriers,” defined as “citizens of the

United States” within the meaning of section 101(13)

of the Act, 49 U.S.C. § 13801(13) (1970). See 49 U.S.C.

$§ 1301(3), 1871(a) (1970).

The 1962 amendments to the Act added a provision

authorizing certification for supplemental air transporta-

tion, defined to encompass charter service but not in-

dividually ticketed authority. See 49 U.S.C. § 1301(36)

(1970).* This provision, section 401(d) (3) of the Act,

under, and that such transportation is required by the

public convenience and necessity ; otherwise such applica-

tion shall be denied.

(2) In the case of an application for a certificate to

engage in temporary air transportation, the Board may

issue a certificate authorizing the whole or any part

thereof for such limited periods as may be required by the

public convenience and necessity, if it finds that the

applicant is fit, willing, and able properly to perform

such transportation and to conform to the provision

of this chapter and the rules, regulations, and require-

ments of the Board hereunder.

49 U.S.C. § 1871(d) (1), (2) (1970).

: Considerable litigation has taken place with regard to the

definition of “charter trips.” See, e.g., Saturn Airways, Inc.

v. CAB, 483 F.2d 1284 (D.C. Cir. 1973) ; Pan American World

Airways, Inc. v. CAB, 380 F.2d 770 (2d Cir. 1967), aff'd by

an equally divided Court, 391 U.S. 461 (1968); American

Airlines, Inc. v. CAB, 365 F.2d 939 (D.C.Cir. 1966) ; American

Airlines, Inc. v. CAB, 348 F.2d 349 (D.C.Cir. 1965). The

overriding principle that has emerged from these cases is that

the Board “should never permit ‘individually ticketed service

to be offered to the general public under the guise of charter.’

SEN. REP. No. 688, 87th Cong., 1st Sess. 13 (1961).” Saturn

Airways, supra at 1288. It should be noted, however, that

supplemental air carriers do have the right to seek temporary

individually ticketed route authority under section 417 of the

Act. See p. 14 & n.10 infra.

10a

includes the requirements that the applicant be “fit, will-

ing, and able” and that the certificated service be “re-

quired by the public convenience and necessity,” but also

includes a limitation—above and beyond section 401 (a)

—on who is eligible for supplemental certification: the

applicant must not be “holding a certificate under para-

graph (1) or (2) of this subsection [section 401(d) }.” *

In other words, an air carrier holding scheduled route

authority under section 401(d) (1) or (2) is barred from

obtaining supplemental authority under 401(d) (3). How-

ever, section 401(d) (3) does not by its terms forbid a

supplemental carrier from acquiring scheduled authority.

The issue in this case thus becomes whether the general

purposes of the 1962 amendments would be furthered

by reading this converse limitation into the Act.

At the outset, it is important to note the narrowness

of the question before us. We are asked merely to de-

cide whether the Board is statutorily foreclosed from

* Section 401(d) (3) provides in full:

(d) (3) In the case of an application for a certificate to

engage in supplemental air transportation, the Board

may issue a certificate, to any applicant not holding a

certificate under paragraph (1) or (2) of this subsection,

authorizing the whole or any part thereof, and for such

periods, as may be required by the public convenience

and necessity, if it finds that the applicant is fit, willing,

and able properly to perform the transportation covered

by the application and to conform to the provisions of

this chapter and the rules, regulations, and requirements

of the Board hereunder. Any certificate issued pursuant

to this paragraph shall contain such limitations as the

Board shall find necessary to assure that the service

rendered pursuant thereto will be limited to supplemental

air transportation as defined in this chapter.

49 U.S.C. § 1371(d) (3) (1970).

lla

considering a supplemental carrier’s application for

scheduled authority. The absence of a statutory bar does

not mean, of course, that a supplemental carrier is

entitled to scheduled authority. It does mean that its

application for such authority is to be evaluated on its

merits, with due consideration to be given to all rele

vant aspects of the public interest, including the ap-

plicant’s responsibilities as a supplemental carrier.

A central objective of the Federal Aviation Act is to

promote regulated competition in the air transportation

industry. See, ¢.g., 49 U.S.C. § 1302 (1970) (public in-

terest standard under the Federal Aviation Act); Con-

tinental Air Lines, Inc. v. CAB, 519 F.2d 944, 951-55

(D.C. Cir. 1975), cert. denied, 424 U.S. 958 (1976). The

primary means for achieving this goal is the certifica-

tion process, in which the Board must consider whether

the applicant is “fit, willing, and able’ and whether the

requested authority would serve the “public convenience

and necessity.” Consequently, rigid constraints on the

Board’s ability to consider applications on their merits

are generally disfavored. See, ¢.g., Civil Aeronautics

ca v. State Airlines, Inc., 338 U.S. 572, 576-78

Against this background, persuasive evidence would

be required to establish that the 1962 amendments were

intended to preclude Board consideration of applications

from an entire class of potential entrants into the market

for scheduled service. Our skepticism in this regard is

reinforced by the total absencé of such a restriction in

the express provisions of the legislation. Nevertheless,

the Board concluded that the 1962 amendments do not

allow “an air carrier to simultaneously hold certificates

for regular route and supplemental air transportation,”

even if the route authority is acquired subsequent to the

supplemental authority. Docket 27693, supra, at 4. Al-

lowing a supplemental carrier to obtain scheduled au-

12a

thority would, so the Board asserted, produce arbitrary

and unreasonable results under several provisions of the

amendments. Moreover, the Board stated that the “plain

implication” of the 1962 legislation, as well as the thrust

of its legislative history, is that Congress intended to

create two mutually exclusive classes of carriers, one to

engage only in regular air transportation * and the other

to supply only supplemental service.*

‘It should be noted that regular carriers, that is, carriers

holding scheduled route authority under section 401(d) (1) or

(2), may perform charter trips and special services under

regulations prescribed by the Board. See Federal Aviation Act

of 1958, § 401(a) (6), as amended, 49 U.S.C. § 1371(e) (6)

(1970), reprinted in note 6 infra. Current regulations permit

an unlimited number of “on-route” charter flights, but re-

strict the frequency and regularity of “off-route” charters.

See 14 C.F.R. Part 207 (1976). The Board presumably recog-

nizes the “hybrid” character of the service provided by regular

carriers but argues, in essence, that applicants must choose

between the package of authority comprehended by scheduled

route certification and the package of authority offered by

supplemental certification.

‘The Board also gave weight to the fact that prior to the

1962 legislation its policy was to prohibit an air carrier from

simultaneously holding both route and supplemental authority.

The Board reasoned that “[p]rior administrative policy and

practice represents another accepted source of guidance in de-

termining how statutes should be construed and applied.”

Docket 27693, supra, at 7. With all respect, we do not find the

Board’s pre-1962 interpretation of the Act persuasive support

for its reading of the 1962 amendments. It seems reasonable

to suppose that a policy formulated at the time the Board was

attempting to justify an exemption of supplemental carriers

from the provisions of the Act would not survive the estab-

lishment of a clear statutory basis for awarding supplemental

certificates. Certainly Congress did not think the prior Board

policy was incorporated as such in the 1962 amendments: the

express prohibition in section 401(d)(3) against accuisition

of supplemental authority by a regular carrier would not have

been necessary had Congress thought the Board’s policy

13a

Although it is clear that Congress intended to au-

thorize certification of a class of air carriers engaging in

supplemental service, we do not see any convincing evi-

dence that Congress intended members of this class to

be foreclosed from seeking regular route authority. This

court’s decisions in American Airlines, Inc. v. CAB, 235

F.2d 845 (D.C. Cir. 1956), cert. denied, 353 U.S. 905

(1957), and United Air Lines, Inc. v. CAB, 278 F.2d

446 (D.C.Cir.), vacated, 364 U.S. 297 (1960), had cast

doubt on the Board’s power to certify supplemental serv-

ice under the statutory scheme in effect prior to the 1962

amendments. In American Airlines, we rejected the

Board’s attempt to grant supplemental air carriers un-

limite? charter authority, plus authority to offer up to

ten individually ticketed flights on any given route per

month, through conferral of an exemption from the pro-

visions of the Federal Aviation Act. In United Air Lines,

we denied the Board’s efforts to achieve a similar result

through the certification process. The 1962 legislation

established a statutory basis for certification and regula-

tion of supplemental service, while preserving the basic

structure of the Act and protecting carriers holding cer-

tificates for regularly scheduled air service from un-

regulated competition. As this court concluded in Ameri-

can Airlines, Inc. v. CAB, 365 F.2d 989 (D.C. Cir. 1966) :

An overall reading of the legislative history indi-

cates that the three primary purposes of the 1962

legislation were: to eliminate irresponsible supple-

mentals, especially those violating safety regula-

tions; to stabilize the operating authority of the

supplementals under certificates, including authority

to authorize “charter trips” on a broad enough basis

so that through performance of civilian and mili-

against dual certification was being carried forward by the

legislation. We note, moreover, that until the instant litigation

the Board had not formally determined the effect of the 1962

amendments upon its prior policy.

l4a

tary charter operations the supplementals might re-

main viable economic organizations capable of meet-

ing supplemental transportation needs and able to

comply fully with safety requirements; to maintain

the regulatory scheme of the Federal Aviation Act

and the protection of the certificated carriers such

as petitioners by eliminating unregulated individ-

ually ticketed point-to-point competition from the

supplementals.

Id. at 944-45 (footnote omitted) (emphasis supplied).

See also Pan American World Airways, Inc. v. CAB,

380 F.2d 770, 777 (2d Cir. 1967), affirmed by an equally

divided Court, 391 U.S. 461 (1968). Obviously, a con-

gressional desire to establish authority for supplemental

service and protect regular air carriers against unregu-

lated competition from the supplementals does not neces-

sarily imply a congressional purpose to shield regular

carriers against competition from supplemental carriers

which is deemed to be in the public interest after a full

hearing by the Board.

We do not think the Board’s construction of the

amendments is necessary to avoid arbitrary or unreason-

able results. Nor do we find sufficient support for its

position in the legislative history, or in the language

of the 1962 provisions considered in their complete con-

text. The Board cited three sections which deny benefits

or impose additional requirements on “supplemental air

carriers,’ and found an anomaly in the fact that a

carrier holding both route and supplemental authority

would be, at one and the same time, “covered and not

covered” by these sections.* The intervening Oakland

*In the words of the Board:

.. . Section 401(e) (6) of the Act had authorized those

carriers holding certificates issued under Section 401(d)

lida

(1) or (2) to engage in charter trips and special services

without regard to the points named in their certificates.

The 1962 supplemental air carrier legislation amended

this section to deny supplemental air carriers this au-

thority. Section 401(n) of the Act either authorizes, or

carriers. These include provisions relating to insurance,

minimum service, and “continuing fitness.” Section

406(b) had authorized the payment of subsidy for all

carriers. That section was also amended by the 1962

supplemental legislation to preclude subsidy for supple-

mental air carriers. If World were to receive a certifi-

on 401(d) (1) or (2) and at the same

it would still be a supplemental carrier by definition.

The wholly anomalous result would be that the carrier

would at one and the same time be (a) granted and

denied Section 401(e) (6) authority; (b) subject to and

not subject to Section 401(n) requirements; and (c)

eligible and not eligible for subsidy.

49 U.S.C. § 1871(e) (6) (1970) (emphasis added).

Section 401(n) provides in relevant part:

(n) (1) No certificate to engage in supplemental air

transportation, and no special operating authorization

described in section 1387 of this title, shall be issued or

remain in effect unless the applicant for such certificate

or the supplemental air carrier, as the case may be,

complies with regulations or orders issued by the Board

governing the filing and approval of policies of insur-

ance, in the amount prescribed by the Board, conditioned

to pay, within the amount of such insurance, amounts

for which such applicant or such supplemental air car-

16a

rier may become liable for bodily injuries to or the death

of any person, or for loss of or damage to property of

others, resulting from the negligent operation or mainten-

ance of aircraft under such certificate or such special

operating authorization.

(2) In order to protect travelers and shippers by air-

craft operated by supplemental air carriers, the Board

may require any supplemental air carrier to file a per-

formance bond or equivalent security arrangement, in

such amount and upon such terms as the Board shall pre-

scribe, to be conditioned upon such supplemental air

carrier's making appropriate compensation to such travel-

ers and shippers, as prescribed by the Board, for failure

on the part of such carrier to perform air transportation

services in accordance with agreements therefor.

(3) If any service authorized by a certificate to engage

in supplemental air transportation is not performed to

the minimum extent prescribed by the Board, it may by

order, entered after notice and hearing, direct that such

certificate shall thereupon cease to be effective to the ex-

tent of such service.

(4) The requirement that each applicant for a certifi-

cate to engage in supplemental air transportation must

be found to be fit, willing, and able properly to perform

the transportation covered by his application and to con-

form to the provisions of this chapter and the rules,

regulations, and requirements of the Board under this

chapter, shall be a continuing requirement applicable to

each supplemental air carrier with respect to the trans-

portation authorized by, and currently furnished or pro-

posed to be furnished under, such carrier’s certificate.

The Board shall by order, entered after notice and hear-

ing, modify, suspend, or revoke such certificate, in whole

or in part, for failure of such carrier (A) to comply with

the continuing requirement that such carrier be so fit,

willing, and able, or (B) to file such reports as the Board

may deem necessary to determine whether such carrier

is so fit, willing, and able.

(5) In any case in which the Board determines the

failure of a supplemental air carrier to comply with the

provisions of paragraph (1), (3), or (4) of this sub-

section, or regulations or orders of the Board thereunder,

17a

parties (the City of Oakland, the Board of Port Com-

missioners, and the Oakland Chamber of Commerce) urge

us to eliminate this “anomaly” by construing these pro-

visions to apply only to supplemental operations rather

than to all services performed by an air carrier holding

supplemental authority. The Oakland parties support

requires, in the interest of the rights, welfare, or saf

of the public, immediate suspension of such A.

ee ae aes Gel cunpend euch cartifeate, tn

or part, without notice or hearing, for not more

49 U.S.C. §1371(n) (1970) (emphasis supplied).

Bs 406(b), as amended in 1962, provides in relevant

or classes of air carriers, and different classes of service.

In determining the rate in each case, the Board shall

(other than a supplemental air carrier) for compensa-

tion for the transportation of mail sufficient to insure

the performance of such service, and, together with all

other revenue of the air carrier, to enable such air car-

rier under honest, economical, and efficient management,

to maintain and continue the development of air trans-

portation to the extent and of the character and quality

required for the commerce of the United States, the

en, States Postal Service, and the national de-

49 U.S.C. §1376(b) (1970) (emphasis added).

18a

their position by analogy to National Association of

Regulatory Utility Commissioners v. FCC, 533 F.2d

601 (D.C. Cir. 1976), in which this court held that a

cable television operator can be a common carrier with

respect to some activities, but a non-common carrier with

respect to others.

We find it unnecessary to pass on the validity of the

Oakland parties’ interpretation, since we fail to see why

the provisions in question raise an anomaly at all. Of

course, if the Oakland parties are correct, a supplemental

carrier holding route authority would be covered by the

1962 amendments in its supplemental capacity, but not

in its route capacity.” Being “covered and not covered”

in this manner would make perfectly good sense. But

even if the references to “supplemental air carriers”

were construed to cover all activities by an air carrier

holding supplemental authority, these provisions would

hardly be irrational. It would not be unreasonable for

Congress to deny benefits and impose requirements on

supplemental air carriers operating scheduled routes,

while granting benefits and waiving requirements for

carriers holding only scheduled authority, if Congress

felt such a distinction were required to ensure that sup-

plemental air carriers would fully carry out their re-

sponsibilities. Thus, we leave it to the Board, in the

first instance, to select the interpretation which will best

fulfill the purposes of the Act.*

* With respect to section 401(e) (6), any eligibility for bene-

fits would flow from the carrier’s route authority.

® Just as we do not think it sufficient to resolve the issue in

this case by looking to the “plain meaning” of section 401(g),

we do not think the Board should be content to rest on the

“plain meaning” of the term “supplemental air carrier” in

sections 401(e) (6), 401(n), and 406(b). The various pro-

visions of the statute should be interpreted so as to effectuate

19a

The Board also found the prospect of a supplemental

carrier acquiring full route authority under section 401

(d)(1) or (2) umreasonable in light of the carefully

limited circumstances in which individually ticketed serv-

ice may be obtained as part of a supplemental license.’

Section 417 of the Act, added by the 1962 amendments,

allows supplemental carriers to seek special operating

authorizations to engage in temporary route service, when

the capacity provided by the regular carriers on a given

route is temporarily insufficient.” Again, however, we

their underlying purposes, with due regard of course for their

language as evidence of those purposes. Since World is ap-

parently willing to waive any charter rights under 401(e) (6)

and any right to subsidy under 406(b), these questions of

interpretation may never arise. If and when they do arise,

however, we leave open the possibility that the term “supple-

mental air carrier” may properly be given different interpre-

tations with respect to different sections.

*The Board stated:

. . » if, as World concedes, Congress has prohibited

“supplemental air carriers” from engaging in scheduled

service under the supplemental license, it makes little

sense to conclude that Congress has, nevertheless, per-

mitted the supplementals to engage in scheduled air

transportation by acquiring a route certificate.

Docket 27693, supra, at 11. Litigation over the proper defini-

tion of “charter trips” has also focused on the congressional

purpose to prevent supplemental carriers from engaging in

individually ticketed service pursuant to their supplemental

certificates. See note 2 supra.

(a) If the Board finds upon an investigation conducted

on its own initiative or upon request of an air carrier—

(1) that the capacity for air transportation bein

offered by the holder of a certificate of public ca.

venience and necessity between particular points

in the United States is, or will be, temporarily in-

8 ll

20a

are unable to see the alleged inconsistency. It is one

thing to limit the incidents which flow directly from

supplemental certification; it is another thing entirely

to eliminate the possibility of acquiring an additional

bundle of rights, upon satisfaction of the requirements

for a different type of certificate.

Ill

We think the legislative history of section 417 sup-

ports our conclusion that Congress was merely concerned

sufficient to meet the requirements of the public or

the postal service; or

(2) that there is a temporary requirement for

air transportation between two points, one or both

of which is not regularly served by any air carrier;

and

(3) that any supplemental air carrier can provide

the additional service temporarily required in the

public interest ;

the Board may issue to such supplemental air carrier a

special operating authorization to engage in air trans-

portation between such points.

(b) A special operating authorization issued under

this section—

(1) shall contain such limitations or requirements

as to frequency of service, size or type of equip-

ment, or otherwise, as will assure that the service

so authorized will alleviate the insufficiency which

otherwise would exist, without significant diversion

of traffic from the holders of certificates for the

route;

(2) shall be valid for not more than thirty days

and may be extended for additional periods aggre-

gating not more than sixty days; and

(3) shall not be deemed a license within the

meaning of section 1008(b) of Title 5.

49 U.S.C. § 1387(a), (b) (1970).

2la

with delimiting the rights which attach to supplemental

certification, and did not intend to preclude applications

for regular route authority. The bill originally passed

by the Senate contained a provision allowing the Board

to grant permanent scheduled authority—in addition to

special operating authorizations under section 417—as

part of a supplemental license, but this authority would

have been subject to Board controls on the number of

flights permitted during any given time period. See

S. REP. No. 688, 87th Cong., Ist Sess. at 1-2, 14-15

(1961). The House Commerce Committee deleted the

additional Senate provision and confined the supple-

mentals’ individually ticketed authority to that arising

under section 417. See H. Rep. No. 1177, 87th Cong.,

Ist Sess. at 11-12 (1961). The Conference Committee

adopted the House version with regard to this issue. H.

Rep. No. 1950, 87th Cong., 2d Sess., at 14 (1962).

The Board read the repudiation of the Senate pro-

vision as clear evidence of a congressional intent to

preclude supplemental air carriers from obtaining sched-

uled route authority. We think the House Committee’s

report makes clear, however, that the Senate provision

was rejected out of a desire to preserve the basic regu-

latory framework of sections 401(d)(1) and (2). The

House Committee relied explicitly on this court’s de-

cision in United Air Lines, Inc. v. CAB, supra, 278 F.2d

446, which had rejected, as contrary to the pre-1962

version of the Federal Aviation Act, numerical limita-

tions on individually ticketed flights offered by supple-

mental carriers. See id. at 448-49. The Committee Re-

port called this holding “fundamental” to the “regulatory

philosophy” of the Act, stating that the Board’s respon-

sibility is to determine the general need for competition,

not to assign specific numbers of flights to particular

carriers. While “supplemental” route authority might

pose a danger of unfair competition to regular carriers,

22a

full route authority acquired upon satisfaction of the

401(d) (1) or (2) prequisites would, by definition, con-

stitute fair competition. Indeed, the Committee Report,

11 The House Report provided in relevant part:

The scheduled carriers opposed any authority for sup-

plementals to conduct individually ticketed operations as

a serious threat to the health and prosperity of the

scheduled industry, citing the poor earnings of the

scheduled carriers for the past 5 years. A witness for

the industry testified that in 1960 the 12 domestic trunk-

lines had a net profit of $1,188,000 on gross operating

revenues of almost $12 billion.

Regulatory concepts of existing law

The so-called certificates issued by the Civil Aeronautics

Board to the supplementals were illegal. This illegality

was not a mere technical infraction of the act. It was

fundamental. The 10-flight individually ticketed grant

violated basic principles of the economic regulatory

philosophy of the Federal Aviation Act of 1958. Thus,

the act recognizes that a carrier’s ability to provide good

public service should not be hampered by artificial limits

on the number of regular schedules for ticketed traffic it

can operate over its routes. The act rejects the restric-

tionist philosophy prevalent in some foreign countries

that a governmental bureau should divide the market

by assigning each carrier an allowed number of flights.

The committee has carefully considered the testimony

and all available evidence and failed to find any sound

reason why these fundamental principles of the act should

be changed. From the standpoint of good public service,

and from the standpoint of opportunity for each carrier

to compete and develop its business, any air carrier

certificated to operate individually ticketed service over a

route should be able to do so without CAB-imposed limi-

tations on the frequency of service. If there is room for

competition over a route, the CAB has authority in section

401 to certificate additional carriers. If there is not room

for such competition, the Board should not be free to

avoid the consequences of competition by limiting the

volume of service to be provided by one, some, or all of

23a

in approving section 417 as a measure necessary

address temporary shortages of route capacity, stated: ,

It is the committee’s view that the grantin

such yoy special operating Po ~y the

Board Id not be : as constituting any

vested right or interest in the route by the carrier

so authorized. If the insufficiency of capacity is a

chronic problem over the particular route, and can

be solved only by an additional carrier, the solution

should be in permanent or temporary certification

under section 401(d) (1) or (2) of existing law.

H. Rep. No. 1177, supra, at 12.

Whether considered singly or together, we

agree that the “plain implication” of the 1962 > se

is that Congress intended to create two mutually ex-

— classes of air carriers. If this intention were

y clear from the structure of the legislation, it would

7 ae to explain why Congress felt compelled to in-

ude the express prohibition in section 401(d) (3) against

acquisition of supplemental authority by a regular car-

rier. At the same time, the Board cannot rely on this

express limitation in section 401(d) (3) as a basis for

inferring its converse. As the Board concedes, see Docket

27693, supra, at 4, the restriction on regular carriers

lent cuerted for a specific purpose, to protect the in-

my supplemental industry from possible domination by

ein a ae route carriers. Although the legislative

_ + Meee A satay is rather thin, it fully supports

the carriers in the market. Moreover the

b . committee does

= fon a A either feasible or desirable to authorize

red transpo system in which the amount of service is

H. REP. No. 1177, supra, at 11-12 (emphasis supplied).

* The companion bills originally introduced

and the Senate, H. R. 7318 and S. 1969 sr a ae

contain any restriction on who could apply for supplemental

24a

certification. Language precluding applications by regular

carriers for supplemental certificates apparently was inserted

by the Senate Commerce Committee staff following the close

of hearings on S. 1969 before the Aviation Subcommittee. See

Committee Print of S. 1969, 87th Cong., 1st Sess. (July 10,

1961). In reporting the bill out to the full Senate, the Com-

merce Committee amended the earlier Committee Print to in-

clude the precise restrictive language now appearing in scc-

tion 401(d) (3). See S. REP. No. 688, supra, at 2.

The most directly relevant materials appearing in the hear-

ings before the Aviation Subcommittee are the following ex-

changes, first, between Senator Monroney and the Chairman

of the CAB, Alan S. Boyd and, second, between Senator Cot-

ton and Mr. Boyd:

Senator Monroney. Assuming enactment of S. 1969, does

the Board contemplate consolidating into a single pro-

ceeding applications for regular and supplementa! cer-

tificates ?

Mr. Boyd. No sir. That, as I understand it, would be

legally possible, but we have no contemplation of that.

Hearings on S. 1969 Before the Aviation Subcomm. of the

Senate Committee on Commerce, 87th Cong., Ist Sess. 29

(June 26-30, 1961).

Senator Cotton. Under this bill [S. 1969] could a regu-

larly certificated carrier also apply for a certificate as

a supplemental carrier?

Mr. Boyd. Yes, sir.

Senator Cotton. Is it conesivable that the CAB would

ever permit a regularly -ertificated carrier to have a

certificate as a supplemental carrier as well?

Mr. Boyd. I can only say that the Board has no contem-

plation of such a possibility, Senator Cotton.

Senator Cotton. At present, a carrier could not form a

separate corporation which would be in a sense con-

trolled by it, to attempt to go into the supplemental

carrier business. Is that correct?

Mr. Boyd. Absolutely. We have very good safeguards.

Senator Cotton. And that is legally provided against, and

is the subject of checking constantly by the CAB?

[Continued }

25a

The Board argues that Con

oar gress could not have meant

the possibility of holding both regular and tire Hore

authority to turn on which type of certificate is obtained

first. In its written opinion the Board reasoned :

.. . if a prospective new entrant into air tr

tation filed simultaneous applications for same ant

supplemental certificates it could not be awarded

both certificates if the route case were decided first

because it would then be a scheduled carrier seeking

. nes certificate—the very situation which

)-og — the language of the Act prevents.

= ~ r hand, again pursuant to World’s views,

e Board could grant the new entrant both certifi-

cates if the Board decided the supplemental certifi-

cate case before the route case. Frankly, we think

that it is inconceivable that Congress could have

the Board should not arbitrarily determin j

plication to consider first, but de sandien = ~_,

tion so as to carry out the limited statutory purpose of

protecting supplemental carriers from domination by

lar carriers. We presume, for example, that a pros-

pective new entrant would have a strong case in favor

7 having the supplemental application considered first,

the route authority at stake would not be significant

a to raise a danger of undue domination. Of course

the route application were filed subsequent to award

of the supplemental certificate, then the problem would

** [Continued]

Mr. Boyd. Yes, sir.

Id. at 33. In addition, Senator S

, , parkman appeared

ness and expressed his feeling “that this comedies foal

make every effort to protect the su seli

pplemental tru

small businesses of civil aviation.” Id. at — ae

26a

i lementa! carrier

ise.” And, in any event, the supp:

a avned to convince the Board that its ne

responsibilities will not be neglected if it acquires rou

authority.

We reverse the order of the Board dismissing 4

tioner’s application, and remand for proceedings not in

i is opinion.

consistent with this op 90 te 00 evdeved.

| if i i te authority

a3 ld argues that if it were to acquire rou

it sonia aa te renewal of = one ait ey,

authority under section 401(g), S.C. — Bente

n t be constrained by the restri ion it ti

at is unnecessary to decide this question, < en

the posture of the case before us. We note, — er, ; i

World’s permanent supplemental authority would no

affected by the 401(d) (3) restriction.

27a

APPENDIX III

76-1-88

Unrtep States or AMERICA

Crvm. Agronavutics Boarp

Wasurneton, D. C.

Docket 27693

Served: January 23, 1976

—

Application of World Airways for a Certificate

of Public Convenience and Necessity

Decided: January 23, 1976

World Airways’ application for a certificate to engage in

transcontinental regularly scheduled route service dis-

missed. Held: The Board does not have authority to

issue a supplemental air carrier certificated route au-

thority without requiring the surrender of carrier’s

authority to engage in supplemental air transporta-

tion.

APPEARANCES:

Frank J. Costello and Jerrold Scoutt, Jr., for World

Airways.

J. Kerwin Rooney for Oakland Parties.

Reuben B. Robertson, III for Aviation Consumer Ac-

tion Project.

Alexander P. Humphrey, IV for U.S. Department of

Transportation.

Elliott M. Seiden for Department of Justice.

Ky P. Ewing, Jr. for American Airlines and Trans

World Airlines.

Howard A, Pulsifer for United Air Lines.

Ronald B. Natalie for Northwest Airlines.

7 ee ee

28a

Jerry W. Ryan for Braniff, Eastern, National, Pan

American and Western.

Paul S. Quinn for the American Society of Travel

Agents.

OPINION

By Tue Boarp:

Background and Conclusions

The central focus of this opinion is on whether the Board

may lawfully issue a route certificate to a supplemental

air carrier without requiring the surrender of the carrier’s

supplemental authority.

The legal question has been raised in connection with

World Airways’ application in this docket for a certificate

of public convenience and necessity to provide scheduled

air transportation between the coterminal points Newark,

N.J. and Baltimore, Md., on the one hand, and Oakland and

Ontario, Calif., on the other hand. World proposes a high-

density, high-load-factor service, featuring a one-way fare

of $89.00 per passenger and a number of marketing inno-

vations. World has also filed a motion for an expedited

hearing on its application.

Answers in support of World’s motion were filed by

numerous governmental, civic and private entities, and by

United Air Lines (one of the three scheduled carriers in

the transcontinental markets). Answers in opposition were

filed by American Airlines and Trans World Airlines (the

other two incumbents) and by Northwest Airlines. Each of

the three objecting carriers raised as a threshold issue the

question of whether the Act bars a supplemental air car-

rier from receiving a route certificate.

In Order 75-7-2, the Board stated that in view of the

legal objections presented it perceived an obligation on its

part to render an interpretation of its statutory authority,

29a

and that it would be more conductive to the orderly admin-

istration of its business if the legal issues were settled

before an evidentiary hearing was undertaken. Accord-

ingly, the Board requested the filing of briefs by interested

persons on the following issues:

1. Whether the Board may issue a certificate for regu-

lar route air transportation under section 401(d) (1)

or (2) of the Act to a carrier holding a certificate

for supplemental air transportation under section

401(d)(3) of the Act without requiring the surrender

of the latter.

2. Whether the Board may issue an exemption under

section 416 of the Act to World to perform the sched-

uled air transportation proposed in World applica-

tion.

The Board also stated that if it determined that it had

the legal authority to grant the relief requested it would

set World’s application for expedited hearing because,

inter alia, the application is unique and could have far-

reaching consequences. However, the Board explained that

if it determined that it had no such authority, it would dis-

miss World’s application. ‘‘Such action would enable

World to seek judicial review. ...’’ Order 75-7-2, p. 3.

American and Trans World, the American Society of

Travel Agents (ASTA), the Aviation Consumer Action

Project (ACAP), ‘‘Certain Trunkline Carriers’’* the De-

partments of Justice (DOJ) and Transportation (DOT),

Northwest, the ‘‘Oakland Parties,’’? Overseas National

Airways and Saturn Airways, Frans International Air-

lines, United, and World Airways have filed briefs in re-

17.e., Braniff Airways, Eastern Air Lines, National Airlines,

Pan American World Airways, and Western Air Lines.

*7.e., The City of Oakland, Calif., Port of Oakland, and the

Oakland Chamber of Commerce.

Voy wees

ie ok lis Cee | ef. ee

————eO

30a

sponse to the Board’s order. Oral argument has been

heard, and the legal issues stand submitted for our deci-

sion.

After full consideration of all matters presented, the

Board is of the opinion that as a matter of law it does not

have the authority to issue a route certificate to a supple-

mental air carrier without requiring the surrender of the

carrier’s supplemental authority.’

We now turn to a discussion of our findings and con-

clusions.

2. General Considerations—Section 401(d)(3) of the Act

Section 401(d) of the Act authorizes the Board to issue

two types of air transportation certificates: (1) certificates

to engage in regularly scheduled air transportation (401

(d)(1) and (2)), and (2) certificates to engage in supple-

mental air transportation (Section 401(d)(3)). Section

401(d)(3) provides:

(3) In the case of an application for a certificate to

engage in supplemental air transportation, the Board

may issue a certificate, to any applicant not holding a

certificate under paragraph (1) or (2) of this subsec-

tion, authorizing the whole or any part thereof, and

for such periods, as may be required by the public con-

venience and necessity, if it finds that the applicant is

fit, willing, and able properly to perform the transpor-

tation covered by the application and to conform to

the provisions of this Act and the rules, regulations,

and requirements of the Board hereunder. Any cer-

tificate issued pursuant to this paragraph shall con-

*Since the Board has concluded that it may not lawfully au-

thorize a supplemental air carrier to simultaneously hold a route

certificate, and since World has not applied for exemption au-

thority and has manifested no intention of doing so, we shall lay

the 416 question aside here without further comment, and shal!

focus our discussion on the dual certification issue.

3la

tain such limitations as the Board shall find necessary

to assure that the service rendered pursuant thereto

will be limited to supplemental air transportation as

defined in this Act.

World’s principal contention is that Section 401(d) (3)

clearly and unambiguously does not prohibit a supplemen-

tal air carrier from simultaneously holding route author-

ity. Thus, it maintains that the ‘‘ plain meaning of this pro-

vision is that a scheduled carrier may not obtain a supple-

mental certificate, not vice versa .. .,’? and ‘‘[mJore im-

portantly, the route certification provisions, Section 401

(d)(1) and (2), do not contain any limitation on who may

obtain a certificate other than the standard requirement

that the applicant be fit, willing and able. In World’s

opinion, this should be dispositive of the question.’’ *

Although World argues that the Board need not look

beyond the literal language of Section 401(d) (3), it never-

theless also maintains that the legislative history is consis-

tent with its position. In World’s view that history shows

that Congress deliberately barred route carriers from ac-

quiring supplemental certificates, but contains nothing that

indicates that Congress intended to bar the reverse situ-

ation.

It may be conceded that a literal reading of Section

401(d)(3) supports World’s position. However, we do not

agree with World that the literal language of that statu-

tory provision is in the circumstances presented disposi-

tive of our legal inquiry. On the contrary, as World itself

appears to recognize, and as the usual canons of statutory

construction otherwise require, the language of that statu-

tory provision must be read in consonance with other aids

to statutory interpretation in order to discover its true

legislative intent or meaning. Indeed, it is a recognized

* World Brief at 3 & 6.

ie 2 we ee

32a

principle of statutory construction that if the literal im-

port of a statutory provision is inconsistent with legisla-

tive intent, or leads to unreasonable results, the words of

the statutory provision must be modified by the intent of

the legislature. United States v. American Trucking Assoc.,

Inc. 310 U.S. 534 (1940). Southland Gasoline Co. v. Bayley,

319 U.S. 44 (1943); Chicago and Southern Air Lines, Inc.

v. Waterman Steamship Corp., 333 U.S. 103 (1948) ; Mastro

Plastics Corp. v. Labor Board, 350 U.S. 270 (1956).

Applying this principle, we find that our empowering

legislation does not permit an air carrier to simultaneously

hold certificates for regular route and supplemental air

transportation. As we shall demonstrate, the concept of

dual certification cannot be reconciled with pertinent pro-

visions of the Act and, if accepted, would produce arbi-

trary and unreasonable results which Congress could not

have intended. Moreover, the plain implication of these

provisions is that Congress intended to create a distinction

between supplemental and route carriers and, pursuant to

that distinction, intended to prevent the same carriers

from simultaneously engaging in regular route and supple-

mental air transportation. The legislative history supports

this statutory interpretation. It demonstrates that Con-

gress, in passing these amendments, contemplated a broad

regulatory scheme whereby supplemental air carriers

would be certificated as a separate and distinct class of

air carrier specializing in ‘‘charter trips.’? On the one

hand, Congress (as correctly noted by World) protected

the supplemental class from possible domination by the

larger route carriers by prohibiting the route carriers

from acquiring certificates to engage in supplemental air

transportation. On the other hand, Congress prohibited

the supplemental air carriers from engaging in regularly

scheduled air transportation pursuant to a certificate of

public convenience and necessity in order to ensure that

the newly created class would ‘‘supplement,’’ é.e., comple-

33a

ment, not duplicate, the service provided by the regular

route carriers. Finally, we believe the postenactment his-

tory of the 1962 supplemental legislation demonstrates

that the statutory mandate limiting supplemental air car-

riers to charter service has been clearly understood by the

courts, and, in fact, by Congress in subsequent legislation.

We now turn to a detailed consideration of our findings

and conclusions.

Dual Certification Cannot be Reconciled With Either the

Letter or the Purpose of the 1962 Amendments to the

Act.

It is a cardinal rule of statutory interpretation that a

section of a statute is not to be read in isolation from the

content of the whole Act, and that the courts are guided

by the provisions of the whole law. Mastro Plastics Corp.

v. Labor Board, supra; United States v. American Truck-

ing Assoc., Inc., supra; Labor Board v. Lion Oil Co., 352

U.S. 282 (1957); Richards v. U.S. 369 U.S. 1 (1962). As

the Supreme Court explained in Power Comm’n. v. Pan-

handle Eastern Pipe Line Co., 337 U.S. 498, 514 (1949):

‘**If possible, all sections of the Act must be reconciled so

as to produce a symmetrical whole.’’ Accordingly, when

Section 401(d)(3) is read in part materia with other rele-

vant sections of the Act, especially those that were con-

temporaneously enacted with Section 401(d) (3), we believe

it is evident that Congress intended that the supplemental

air carriers should provide a separate and distinct class of

service and intended to prevent the same carrier from

simultaneously holding certificates authorizing regular

route and supplemental air transportation.

To begin with, Section 401(a)(6) of the Act had author-

ized those carriers holding certificates issued under Sec-

tion 401(d)(1) or (2) to engage in charter trips and special!

services without regard to the points named in their cer-

tificates. The 1962 supplemental air carrier legislation

ee ee ae ee eee

34a

amended this section to deny supplemental air carriers this

authority. Section 401(n) of the Act either authorizes, or

imposes, a number of special requirements relating to sup-

plemental air carriers that are not applicable to route car-

riers. These include provisions relating to insurance, mini-

mum service, and ‘‘eontinuing fitness.’’ Section 406(b) had

authorized the payment of subsidy for all carriers. That

section was also amended by the 1962 supplemental legis-

lation to preclude subsidy for supplemental air carriers.

If World were to receive a certificate under Section 401

(d)(1) or (2) and at the same time was permitted to retain

its supplemental certificate, it would still be a supplemental

carrier by definition. The wholly anomalous result would

be that the carrier would at one and the same time be (a)

granted and denied Section 401(e)(6) authority; (b) sub-

ject to and not subject to Section 401(n) requirements;

and (c) eligible and not eligible for subsidy. We think these

sections demonstrate that Congress did not intend to per-

mit the same carrier to hold both route and supplemental

air carrier certificates. Indeed, no citations are needed for

the proposition that statutes are to be construed to avoid

unreasonable, let alone absurd, results.

World maintains that its interpretation of Section 401

(d)(3) and the provisions of Sections 401(e)(6) and

406(b) are ‘‘capable of coexistence,’’ since the latter may

be read as applicable either to World’s route operations or

to its supplemental operations. However, Sections 401

(e)(6) and 406(b) permit no such reasonable construction.

They unequivocally speak to supplemental air carriers, not

supplemental operations, and create a clear distinction be-

tween the supplemental and route carrier classes by pro-

hibiting supplemental air carriers from receiving benefits

and engaging in services specifically reserved for the route

carriers. Similarly, Section 401(n) reinforces what we per-

ceive to be the intended distinction between the classes by

imposing certain unique requirements on supplemental air

carriers, not merely supplemental operations.

35a

It is equally significant that Congress, in enacting Sec-

tion 417, appears to have contemplated special conditions

which must be met before a supplemental carrier can per-

form individually ticketed service—conditions which

World describes as ‘‘extraordinary.’’ The existence of

Section 417 confirms the manifest statutory distinction be-

tween supplemental air carriers and route carriers and

provides equally strong evidence that Congress did not in-

tend supplemental carriers to perform route transporta-

tion on a regular basis.

Finally, a number of trunk carriers maintain that

World’s interpretation of Section 401(d)(3), if accepted,

would produce a further anomaly. Specifically, it is argued

that if World obtains a route certificate it could not, there-

after, be issued new or renewed authority because Section

401(d)(3) literally prohibits the issuance of a supplemen-

tal certificate to a carrier holding route authority.’ World

disagrees, arguing, imter alia, that section 401(g), not

401(d), governs renewed or expanded supplemental au-

thority. Therefore, in its view, a supplemental carrier may

obtain a route certificate under 401(d)(1) or (2), and later

seek new or renewed supplemental authority under section

401(g). We believe that World’s argument elevates form

above substance. For example, pursuant to World’s views,

if a prospective new entrant into air transportation filed

simultaneous applications for route and supplemental cer-

tificates it could not be awarded both certificates if the

route case were decided first because it would then be a

scheduled carrier seeking a supplemental certificate—the

very situation which World concedes the language of the

Act prevents. On the other hand, again pursuant to

5 Significantly, World’s overseas and foreign supplemental air

transportation authority are temporary. That carrier seeks renewal

of that authority and new supplemental authority in the Supple-

mental Renewal Proceeding, Docket 23944, while it contemporane-

ously seeks route authority in this proceeding.

36a

World’s views, the Board could grant the new entrant both

certificates if the Board decided the supplemental certifi-

cate case before the route case. Frankly, we think that it is

inconceivable that Congress could have meant that such

arbitrary procedural circumstances should control the fun-

damental role that a carrier should play in the air trans-

portation system. In our judgment, there is considerable

merit in the trunk carriers’ contention that the issuance

of route authority to World could potentially vitiate much

of World’s supplemental air carrier authority and that

this result cannot be reconciled with the Congressional

purpose of certificating supplemental air carriers.

In summary, it is our conclusion that the language of

those statutory provisions which are relevant and material

to resolution of the legal question at issue establish that a

single carrier may not simultaneously hold one certificate

issued under Section 401(d)(1) or (2) and another issued

under Section 401(d)(3). On the other side of the coin, it

is evident that World’s contrary interpretation of the law

would produce arbitrary and unreasonable results that

Congress could not have intended.

Board Policy and Practice Prior to the 1972 Supplemen-

tal Air Carrier Legislation Precluded Dual Certification.

Prior administrative policy and practice represents an-

other accepted source of guidance in determining how

statutes should be construed and applied. Transcontinental

and Western Air, Inc. v. C.A.B., 336 U.S. 601 (1948);

Delta Air Lines v. Summerfield, 347 U.S. 74 (1954); W. T.

Grant Co. v. Fleming, 159 F.2d 720, 723. (U.S. Em. Ct.

App., 1946). It is significant, therefore, that it was the

Board’s policy for a period antedating the 1962 supple-

mental air carrier legislation to preciude dual certification.

For example, in 1955, the Board issued its decision in the

so-called ‘‘ public interest’? phase of the Large Irregular

37a

Air Carrier Investigation, 22 C.AB. 838. It determined that

the large irregulars, thereafter to be called supplemental

air carriers, should be permitted to conduct expanded op-

erations and, pending disposition of the remaining phases

of the proceeding, it granted all applicants an exemption

authorizing the new operations. This grant was subject,

however, to the following condition:

‘*4. That the exemption . . . shall terminate 60 days

after the Board makes a final disposition of the appli-

cation or applications of each such carrier in this

proceeding: Provided, however, That in the event a

certificate of public convenience and necessity is issued

to any supplemental air carrier the exemption granted

herein to such carrier shall terminate on the date such

certificate becomes effective.’’ (22 C.A.B. at 876, em-

phasis added).

One of the carriers receiving this exemption was Trans

Caribbean (TCA). By the time the Board decided the re-

maining phases of the case, granting certificates for sup-

plemental operations to the carriers found qualified, TCA

had received a certificate as a regular route carrier. With

respect to its application in the Large Irregular case, the

Board said (Large Irregular Air Carrier Investigation, 28

C.A.B. 224, 255 (1959) :

‘*As regards Trans Caribbean Airways, whom the

examiners ... found well qualified on the facts before

them, the Board in its recent decision in the Service

to Puerto Rico Case [26 C.A.B. 72] certificated this

———@garrier for a route between New York and Puerto

Rico. ‘The established policy of the Board is that au-

thorization for irregular or supplemental carriage ter-

minates when the carrier receives a route certificate.

This is because supplemental air transportation must

retain a character fundamentally distinct from and

supplemental to, rather than duplicative of, the serv-

eS» =~ = ey «_ —_~ ~~

— Ee CU

ee a a Pet

38a

ices provided over the Nation’s cert.ucated route net-

work, which is the basic component of our national air

transportation system. This distinct and supplemen-

tal character would be undermined if carriers which

assume the burdens of maintaining portions of the

basic route network were to continue to perform sig-

nificant transportation supplemental to that network.

The best energies of a route certificate holder are ex-

pected to be devoted to the development of its route,

and it would be inconsistent to entertain this expec-

tation if the carrier also holds broad supplemental

authority which it is encouraged to exercise to the ex-

tent of its capabilities and the available markets.”’

The Board concluded, therefore, that Trans Caribbean’s

status as a regular route carrier precluded it from also

being a supplemental carrier.

We believe that the Board’s historic proscription

against permitting the same carrier to hold both regular

route and supplemental air carrier authority is entitled to

significant weight in the circumstances of this case. First,

it is consistent with our finding that the pertinent provi-

sions of the Act preclude dual certificaion. Second, there is

little question that Congress in considering the 1962 sup-

plemental air carrier legislation was aware of the Board’s

policy.’ Third, there is no evidence that Congress intended

to disturb that policy. On the contrary, as we shall now

explain the legislative history of the 1962 supplemental air

* For example, in dealing with a proposed amendment to the Act

involving ‘‘grandfather’’ rights, the Conference Report noted that:

‘The conference committee is informed that this provision de-

seribes an air carrier which was originally certificated as a supple-

mental carrier and subsequently certificated as a cargo carrier.

Under Board Regulations such carrier could not hold two types of

certificates; therefore the supplemental certificate initially issued

was cancelled.’’ Conference Report, H.R. Report No. 1950, 87th

Cong. 2nd Sess. at 15, (1962).

39a

carrier amendments shows that Congress expected that

policy to continue.

Legislatiwwe History and Postenactment History

In the previous sections of this opinion we have focused

primarily on the s.a.ute itself and on the Board’s policies

antedating the passage of the 1962 supplemental air car-

rier legislation as they bear upon the issues in this case.

The history of that legislation adds further support for

our conclusion that the Act does not vest in this agency the

authority to permit the same carrier to hold regular route

and supplemental air carrier authority.

a. Legislative History—Congress Acts To Prohibit

Supplementals From Operating Regularly Scheduled,

Individually Ticketed, Services.

One of the most important, and hotly contested, issues

before Congress in connection with the 1962 supplemental

air carrier legislation was whether, and to what extent,

supplemental air carriers should be permitted to operate

regularly scheduled, individually ticketed air transporta-

tion services. Prior to the 1962 legislation, the large irreg-

ular carriers had been allowed to operate 10 individually

ticketed flights per month between any two points in the

United States. The 1962 bill submitted by the Board would

have permitted the supplementals to continue this type of

service on a permanent certificated basis. The Board also

supported legislation that would have permitted supple-

mentals to provide individually ticketed services pursuant

to ‘*temporary operating authorizations’’ (1.e. a 30-day

award under what is now Section 417). The scheduled car-

riers, on the other hand, supported a bill which would have

precluded any scheduled service by supplemental carriers.

Both options were considered by the Congress.

Initially the Senate approved legislation permitting the

Board to certificate supplementals to provide permanent

ee ee SS Ss eee ee ee

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individually ticketed operations without any reference to

the specific number of flights that they could provide. The

Senate’s bill would have merely required the Board ‘‘to

include in the certificate such terms and limitations as it

finds are necessary to insure that such services will not

result in significant diversion of traffic from the certifi-

cated route carriers authorized to render service between

the same points.’’’

Explaining this legislation on the floor of the Senate

during the initial debate on the Senate version, Senator

Monroney (Chairman of the Senate Aviation Subcommit-

tee and floor manager) entered into the following discus-

sion with Senator McCarthy:

‘Mr. McCarthy: I have a question with regard to Sec-

tion 401 and I pose this question to the Senator from

Oklahoma. If that section is retained, could the CAB

certificate a supplemental airline to provide scheduled

service between New York and Los Angeles, or be-

tween any other pair of cities?

Mr. Monroney: Subject to such limitations as were

required to protect the scheduled certificated carriers

it could. Furthermore, under Section 417 if the number

of planes available were inadequate, it might be neces-

sary to authorize daily service for a temporary period

by supplemental carriers to supplement the regular

service.’ ®

The service suggested by Senator McCarthy bears a close

resemblance to the service proposed by World in this

docket. However, Congress declined to pass the Senate

version. Instead it approved the House version of the sup-

plemental amendments which, except for the narrow grant

of authority contained in Section 417, limited supplemental

7 See Senate Report No. 688, 8th Cong., Ist Sess., at 7 (1968).

® 107 Cong. Rec. 17165 (August 28, 1961).

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carriers to ‘‘charter trips. .. .’” The Conference Report in

its comments on ‘‘individually ticketed and waybilled serv-

ices,’’ explained:

‘Under the House amendment, the term ‘‘supple-

mental air transportation’’ did not include individ-

ually ticketed and waybilled services, therefore sup-

plemental air carriers could not have engaged in such

services on a permanent basis. Under the Senate

amendment, such term did include individually tick-

eted and waybilled services and therefore such car-

riers could have engaged in such services on a perma-

nent basis.

The substitute agreed to in conference adopts the pro-

visions of the House amendment with respect to the

prohibition of individually ticketed and waybilled

services on a permanent basis.’’®

In sum, Congress had before it bills that would have

authorized the Board to certificate a supplemental air car-

rier to provide service similar to that proposed by World

herein. Congress declined to pass that legislation.

We point out that on brief World concedes that Congress

has prohibited ‘‘supplemental air carriers’’ from engaging

in certificated individually ticketed operations pursuant to

their supplemental certificates. However, World argues

nonetheless that Congress has not prohibited supplemental

air carriers from acquiring route certificates. It cites the

following excerpt from the House Report on the 1962 sup-

plemental legislation in support of its proposition:

‘*It is the committee’s view that the granting of such

temporary special operating authority [under Section

417] by the Board should not be regarded as constitut-

ing any vested right or interest in the route by the

carrier so authorized. If the insufficiency of capacity is

* House Report No. 1950, 87th Cong., 2nd Sess., at 14 (1962).

a i |

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a chronic problem over the particular route, and can

be solved only by an additional carrier, the solution

should be in permanent or temporary certification un-

der Section 401(d)(1) or (2) of existing laws.’’ *

We have two brief comments with respect to World’s

contention. First, if, as World concedes, Congress has pro-

hibited ‘‘supplemental air carriers’’ from engaging in

scheduled service under the supplemental licenses, it makes

little sense to conclude that Congress has, nevertheless,

permitted the supplementals to engage in scheduled air

transportation by acquiring a route certificate. This result

would permit World and other supplementals to do indi-

rectly that which the legislative history shows they may

not do directly. Similarly, if a supplemental carrier obtains

regular route authority, there would be no substantive dis-

tinction between the scheduled and supplemental classes—

a result which we also believe is inconsistent with Congres-

sional intent. Second, we believe the excerpt from the

House Report relied upon by World also permits the infer-

ence (which we find more reasonable overall) that the

reference to certification under section 401(d)(1) or (2)

was intended to cover the ordinary route carriers rather

than the supplementals or both the supplementals and

route carriers. The fact is that the House version of the

1962 supplemental legislation limited the supplementals to

individually ticketed services under Section 417 alone. In-

deed, as the House Report itself pointed out as to the new

Section 417:

‘*It would be under this provision of the committee

substitute that supplemental air carriers could be au-

thorized to engage in individually ticketed and indi-

vidually waybilled operations.’’ ™

*° House Report No. 1177, 87th Cong., Ist. Sess., at 12 (1961).

** House Report, supra, at 18-19.

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b. Postenactment History

(1) The Determination of the Courts of Appeals

In 1966, the Court of Appeals for the District of Co-

lumbia Circuit reviewed the Board’s award of domestic

inclusive-tour authority to the supplemental carriers and

determined that the Act permitted the Board to authorize

supplemental air carriers to provide inclusive-tour char-

ters. American Airlines, Inc. v. CAB., 365 F.2d 939 (D.C.

Cir. 1966). The court reached its result after conducting

an extensive review of the legislative history of the 1962

supplemental legislation. On the basis of that review, the

Court stated:

‘*An overall reading of the legislative history indi-

cates that the three primary purposes of the 1962 leg-

islation were: to eliminate irresponsible supplemen-

tals, especially those violating safety regulations; to

stabilize the operating authority of the supplementals

under certificates, including authority to authorize

‘charter trips’ on a broad enough basis so that

through performance of civilian and military charter

operations the supplementals might remain viable eco-

nomic organizations capable of meeting supplemental

transportation needs and able to comply fully with

safety requirements; to maintain the regulatory

scheme of the Federal Aviation Act and the protection

of the certificated carriers such as the petitioners by

eliminating unregulated individually ticketed point-to-

point competition from the supplementals.’’ ”

Thereafter, the Board, with the approval of the Presi-

dent, granted international inclusive-tour authority and

the award of that authority was reviewed by the Second

Circuit Court of Appeals. That court, reviewing the same

12 American Airlines v. C.A.B., supra at 944-5, Footnote omitted,

emphasis added.

;

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44a

legislative history, concluded that the term ‘‘charter

trips’’ was not intended to embrace inclusive-tour charters.

In reaching that conclusion, the court stated:

‘‘The conflicting House and Senate bills were sub-

mitted to a Conference Committee which reported out

a substitute bill which was ultimately enacted as Pub-

lic Law 87-528. The substitute followed the House ver-

sion, eliminating the definition of the term ‘charter’

found in the Senate bill. It is clear from the confer-

ence report that one purpose of the committee in

adopting the provisions of the House bill was to pro-

hibit individually ticketed and waybilled services on a

permanent basis. .. .’’

Pan American World Airways v. CAB, 380 F.2d 770, 779,

(2d Cir. 1967). The Supreme Court affirmed the Second

Cireuit’s decision by a divided vote. World Airways v.

Pan American, 391 U.S. 461 (1968).

The difference in judicial interpretation turned on

whether or not inclusive-tour charters were ‘‘charter trips’’

within the meaning of the Federal Aviation Act. Implicit

in both opinions, however, is the more fundamental notion

that supplemental air carriers are limited to providing

“charter trips’? and may not offer individually ticketed

services.

(2) The 1968 Amendment to the Federal Aviation Act

In 1968, Cong.ess amended the Act in order to make it

clear that supplemental air carriers were authorized to

conduct inclusive-tour charters. The House and Senate

bills were similar in major respects. Importantly, inclu-

sive-tour charters were codified as a recognized form of

charter rather than as an exception to the authorization of

‘charter trips.’’ See Section 101(34). In the words of the

House Report accompanying H.R. 17685:

45a

‘*The last sentence of the revised definition of ‘supple-

mental air transportation’ was added by the commit-

tee to assure that supplemental air carriers could not

directly sell or offer for sale tickets for an inclusive

tour to individual members of the general public. Jn

other words, ut keeps such carriers out of the business

of offering individually ticketed services in competi-

tion with the scheduled carriers. It also prohibits such

carriers from making such sales indirectly through

a tour operator authorized by the Board to organize

and sell an inclusive tour if such tour operator has any

interlocking relationship with the carrier or if both

the carrier and the tour operator are under common

control by any other person. In short, no supplemental

air carrier will be permitted to do indirectly what wt is

prohibited from doing dircctly.’’*

Congress approved the House version of the 1968 sup-

plemental legislation.

Summary

In the previous sections of this opinion we have ex-

plained that our inquiry into pertinent statutory provi-

sions, Board policy and precedent, legislative history, and

postenactment history discloses that Congress did not in-

tend to vest in the Board the power to authorize supple-

mental air carriers to hold certificates for regular route

and supplemental air transportation. In these circum-

stances, we find that it is necessary to depart from the

literal language of Section 401(d)(3) in order to effectuate

legislative intent. Therefore, in consonance with our order

inviting comments on the legal issues, we shall dismiss

World’s application in this docket. Several matters relat-

ing to that dismissal warrant comment.

18 House Report No. 1639, 90th Cong. 2d Sess. (1968). Emphasis

added.

Pe EEE a eee. eae aS ee

46a

First, World, and those supporting its position, argue

that the purpose of the route certification provision of the

Act (Sections 401(d)(1) and (2)) is ‘‘to open the door to

all potential applicants” for air transportation authority,

and therefore, that a decision by the Board precluding

World from acquiring route authority would be inconsis-

tent with that purpose. World cites Civil Aeronautics

Board v. State Airlines, Inc., 338 U.S. 572, 578 (1950) in

support of its interpretation of Sections 401(d)(1) and

(2). The short answer to World’s contention is that what-

ever the merits of its views of the route certification provi-

sions in other contexts, Congress has, in our judgment,

determined that supplemental air carriers shall not, pur-

suant to Section 401, engage in regularly scheduled air

transportation and it is our duty to obey that injunction.

It is significant that the court case cited by World was

decided prior to the 1962 supplemental legislation, and, of

course, does not purport to address the statutory limitation

that we have found to exist in this case.

Second, one of the parties to this proceeding opposing

World’s applications on legal grounds states that even if

the Board concludes that it does not have the authority to

permit World to acquire a route certificate, it should nev-

ertheless go forward with a full evidentiary hearing on the

merits of World’s application and reserve decision on the

legal issues herein until completion of that hearing. We

have rejected that course of action. The proper adminis-

tration of the Board’s business and fundamental stand-

ards of fairness in administrative proceedings require that

the Board decide the legal issue it has before it now, and

in a manner that avoids wasteful expenditures of time,

effort and other resources and permits any party to this

proceeding to seek timely judicial review of the Board’s

decision, if so desired. This Board has afforded, and will

continue to afford, careful consideration to new service

proposals that inure to the benefit of the traveling public

47a

and this nation’s air transportation system when such

proposals are in accord with statutory requirements. We

need not conduct a special proceeding for the purpose of

demonstrating our interest in such matters.

Finally, we would emphasize that today’s decision ad-

dresses only the question of the extent of the legal author-

ity that Congress has vested in the Board under present

law. Insofar as it may be argued that the public interest

now requires a change in that authority, so as to permit

the Board to grant or deny applications such as World’s

on their individual economic merits, such arguments must

of necessity be addressed to the Congress.

Accordingly, in view of the foregoing, we find that:

1. World’s application in Docket 27693 should be dis-

missed.

2. Except to the extent granted or dismissed herein, all

motions and requests should be denied and the proceeding

in Docket 27693 should be terminated.

An appropriate order will be entered.

Rosson, Chairman, O’Meuia, Vice Chairman, Mrvertt,

Trimm and West, Members, concurred in the above opinion.

48a

Order 76-1-88

Unrrep States or AMERICA

Civm AgRonauTics Boarp

Wasuinerton, D. C.

Adopted by the Civil Aeronautics Board

at its office in Washington, D.C.,

on the 23rd day of January, 1976

Docket 27693

Application of

Worvp Arrways, Inc.

for a certificate of public convenience and necessity.

ORDER

Oral argument having been held on certain legal ques-

tions arising from the application of World Airways in

the above-entitled proceeding, and the Civil Aeronautics

Board, upon consideration of the arguments of the parties,

having issued its opinion containing its findings and con-

clusions and decision which is attached hereto and made a

part hereof,

Ir Is OnperRED Tat:

1. World’s application in Docket 27693 be and it hereby

is dismissed; and

2. Except to the extent granted or dismissed herein, all

motions and requests be and they hereby are denied, and

this proceeding be and it hereby is terminated.

By the Civil Aeronautics Board:

Epwin Z. Hotianp

Secretary

(SEAL)

49a

Crvoi Agronavtics Boarp

Wasuineton, D.C. 20428

For Release:

On or After

Contact: Ron Aaron Eisenberg Friday

202/382-6031 (Office) January 23, 1976

202/686-0077 (Home) CAB 76-8

CAB Dentes Appiication ror Low-Cost Coast-To-Coast

SERVICE

Wasuinoeton, D. C. (January 23, 1976)—The Civil Aero-

nautics Board today dismissed an application by World

Airways to offer scheduled transcontinental air service be-

tween Newark, New Jersey and Baltimore, Maryland on

the one hand, and Oakland and Ontario, California on the

other, for a one-way fare of $89.00 per passenger.

The CAB, in dismissing World’s application, said it does

not have the authority under the Federal Aviation Act to

issue to a supplemental air carrier a certificate to engage

in regularly scheduled air transportation as long as the

carrier continues to hold its supplemental certificates.

In making this decision, the Board issued the following

statement: (Attached))

Order 76-1-88

ee es ees Se ee a ee re ae ee Se

et Tt Tete |

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Crvim Agronautics Boarp

SupPLEMENTAL STATEMENT

to Order 76-1-88

January 23, 1976

The Board has today issued Order No. 76-1-88 dismiss-

ing World Airways’ application to engage in low-fare

transcontinental scheduled air service. That order holds

that under existing provisions of the Federal Aviation Act

the Board cannot grant World Airways a certificate to

perform regular scheduled route operations while World

continues to hold its existing certificates for supplemental

air transportation. From our study of the Act and the

legislative history, the Board has determined that no other

legal conclusion as to the scope of its authority is possible.

This statutory limitation on the Board’s authority,

which precludes action on the substantive merits of

World’s application, or of other similar applications rais-

ing the same issue, is a matter which deserves Congres-

sional review.

Significant changes have taken place since 1962, when

the provisions which today preclude the same carrier from

holding both supplemental and route certificates were

adopted. Various regulatory factors may demand greater

attention now than was the case at the time of the enact-

ment of these provisions. Careful analysis would, of

course, have to be given to the implications of. legislative

change for the air transport s.stem. However, the consid-

erations which led Congress to inandate a distinct class of,

supplemental carriers, and in all cases preclude the same

carrier from holding both kinds of certificates, may no

longer be as persuasive.

On a different point, it would seem that the creation of

an economic regulatory agency rests on the determination

5la

that a specialized body with expertise and the necessary

regulatory powers will, over time, be best equipped to deal

with the complexities and changing economic conditions

affecting the subject matter of its jurisdiction. The ques-

tion here becomes, as a matter of legislative and public

policy, how broad a range of matters a regulatory agency

should be empowered to determine on their economic and

regulatory merits.

These considerations raise the questions whether the

existing statutory limitation should not be examined to

assess whether it continues to serve important and useful

regulatory and public purposes.

Accordingly, without implying a view on the merits of

any particular legislative proposal or on any application

to provide air service, we believe that an examination by

the appropriate Congressional Committees of the need to

perpetuate in the present form or alter this limitation would

be timely. Without at this time attempting to discuss the

various issues, the Board would expect to offer its views on

this matter at Congressional hearings which we anticipate

will be held later this year on various aspects of the Fed-

eral Aviation Act.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.