Nebraska Department of Aeronautics v. Civil Aeronautics Board, Frontier Airlines, Inc., Intervenor

298 F.2d 286, 1962 U.S. App. LEXIS 6320
CourtCourt of Appeals for the Eighth Circuit
DecidedJanuary 4, 1962
Docket16590_1
StatusPublished
Cited by22 cases

This text of 298 F.2d 286 (Nebraska Department of Aeronautics v. Civil Aeronautics Board, Frontier Airlines, Inc., Intervenor) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nebraska Department of Aeronautics v. Civil Aeronautics Board, Frontier Airlines, Inc., Intervenor, 298 F.2d 286, 1962 U.S. App. LEXIS 6320 (8th Cir. 1962).

Opinion

BLACKMUN, Circuit Judge.

The petitioners, 1 which we shall collectively call “Nebraska”, seek review here 2 *288 of two orders of the Civil Aeronautics Board. In their brief they state:

“This case involves the power of the Civil Aeronautics Board * * * to authorize without a hearing, on the basis of unverified pleadings, the cessation of all air service on segment 13 of route 73 which Frontier Airlines, Inc. * * * was given the sole certificate responsibility to serve.”

The segment referred to is the northern Nebraska route between Omaha, Nebraska, and Casper, Wyoming, via the intermediate points of Lincoln, Columbus, Norfolk, Ainsworth, Valentine, and Chadron, Nebraska, and Lusk and Douglas, Wyoming.

The first order, 3 issued without a hearing, authorized Frontier temporarily to suspend service over segment 13. 4 At the same time and by the same order, the Board, on its own initiative, 5 instituted an investigation to determine whether the public convenience and necessity required the deletion of segment 13 from Frontier’s certificate. The authorization for temporary suspension ran “until ninety days after final decision” in the investigation so ordered by the Board. 6 Our No. 16,589 is the appeal from this order.

The second order 6 7 dismissed, also without a hearing, Nebraska’s cross-petition for an investigation into the adequacy of Frontier’s total service in Nebraska and the substitution of another carrier for Frontier in that state. Our No. 16,590 is the appeal from this order.

The controversy has its origin in the Seven States Area Investigation, CAB Docket 7454, et al., the final decision in which was issued December 8, 1958. Frontier, by Board order 8 and contrary to the recommendation of its hearing examiner, was then granted authority, inter alia, to provide exclusive subsidized service on segment 13. 9 Although the examiner had concluded that the segment should not be authorized because the subsidization costs would be out of line with the service involved and would be primarily for the cities of Ainsworth and Valentine, the Board awarded the route in view of the isolation of the area and the discontinuance of passenger rail service. The award, however, was for an “experimental period” of 5 years and was subject to an announced “use it or lose it” policy. 10

This policy, as embraced in Seven States, was to the effect that the Board was willing, on an experimental basis, to *289 offer local air service to smaller communities with unknown or marginal traffic potential “a chance to demonstrate whether they will use and can afford local air service”. Three factors were specified: (1) unless a city enplaned an average of 5 passengers daily for the 12 months following the initial 6 months of service, the Board, in the absence of unusual circumstances, itself would institute a formal investigation to determine whether the city should lose its air service; (2) unless a route segment averaged a stated passenger minimum during the same period, a similar step would be taken; and (3) the obligation of management to come forward promptly with suggested route modifications, and

“In particular, where a community or segment fails to make adequate use of a subsidized service, the carrier is free to seek a voluntary suspension of service even in advance of a proceeding to terminate the certification. Indeed if a carrier fails to exercise adequate vigilance in this regard, it may reflect upon the economy and efficiency of management in subsidy mail pay proceedings under section 406 of the Act. 11

On February 8, 1960, after 16 months of service, Frontier filed with the Board its application for temporary suspension of service on segment 13 “until such time —not less than a year hence, that the traffic warrants the resumption of such service”. Detailed exhibits accompanied the application. Amendments were filed with further data so that the Board had before it Frontier’s stated results of operations on the segment for more than 18 months. In general, this material contained the history of the operation in terms of schedules provided, traffic results by cities and over the entire segment, and alternate available air facilities. The primary conclusory allegations submitted by Frontier were that the traffic failed to meet the “use it or lose it” standard; that a subsidy of f239,213 annually (estimated on the basis of one round trip daily) was excessive in the light of the actual utilization of the service; that it would be neither economical nor efficient management for Frontier to continue the service; and that alternate air service for nearly half the present traffic was adequate.

Nebraska combined its answer with the cross-petition referred to above. These, too, were accompanied by supporting material in the form of affidavits, newspaper editorials and the like. In general, Nebraska took the position that Frontier’s service throughout the state was unrealistic in operation and grossly inadequate; that this was the major factor in the lack of traffic response; that there was no prospect for improvement under Frontier’s management; that the test period had not been an adequate one; that the stated subsidy was greatly overestimated; that suspension of service would not be temporary but would actually amount to abandonment; that a hearing was required as a matter of law; and that Frontier should be replaced.

Frontier then moved for a decision on the pleadings.

The Board did not hold a hearing on either application. With respect to the proceeding instituted by Frontier the Board found that the standards prescribed in Seven States “have not been met by most of the cities on segment 13 or by the segment as a whole”; that “despite any resultant isolation of the cities in northern Nebraska the traffic response does not indicate a strong need for air service”; that suspension would deprive only Ainsworth and Valentine of all air service; that these cities originated insufficient passengers to warrant service; that the subsidy required to support these two cities and the entire *290 segment was “excessive in relation to the use made of the service”; that “on balance, continuance of the operation would not be in the best interests of the public”; and that the operation would involve a subsidy cost far outweighing the inconvenience to the areas affected.

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Related

Doe v. Department of Transportation
412 F.2d 674 (Eighth Circuit, 1969)
John Doe v. Department Of Transportation
412 F.2d 674 (Eighth Circuit, 1969)
Law Motor Freight, Inc. v. Civil Aeronautics Board
364 F.2d 139 (First Circuit, 1966)
City of Pontiac v. Civil Aeronautics Board
361 F.2d 810 (Sixth Circuit, 1966)
Frontier Airlines, Inc. v. Nebraska Department of Aeronautics
122 N.W.2d 476 (Nebraska Supreme Court, 1963)

Cite This Page — Counsel Stack

Bluebook (online)
298 F.2d 286, 1962 U.S. App. LEXIS 6320, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nebraska-department-of-aeronautics-v-civil-aeronautics-board-frontier-ca8-1962.