Texas International Airlines, Inc. v. Civil Aeronautics Board

444 F.2d 969
CourtCourt of Appeals for the D.C. Circuit
DecidedApril 30, 1971
DocketNos. 23232, 23233, 23481, 23482
StatusPublished
Cited by1 cases

This text of 444 F.2d 969 (Texas International Airlines, Inc. v. Civil Aeronautics Board) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Texas International Airlines, Inc. v. Civil Aeronautics Board, 444 F.2d 969 (D.C. Cir. 1971).

Opinion

PER CURIAM:

These cases are consolidated petitions under 49 U.S.C. § 1486 (1964), to review decisions of the Civil Aeronautics Board in two new route cases known as Central Airlines, Inc., Route 81 Investigation (Central 81 case) and the Gulf States-Midwest Points Investigation (Gulf States). The petitioners are Texas International Airlines1 (Texas International) and the cities of Texarkana (Texas and Arkansas), the Texarkana Airport Board and the Texarkana Chamber of Commerce, collectively referred to as Texarkana. Intervenors include Southern Airways, Inc., Frontier Airlines, Inc.,2 American Airlines, Inc., and the cities of Little Rock, Hot Springs and Beaumont. Texas International’s petition in No. 23,232 relates to the Gulf States decision, and its petition in No. 23,233, to the Central 81 decision. Tex-arkana’s petition in No. 23,481 challenges the Central 81 decision and its petition in No. 23,482 challenges the Gulf States decision. Little Rock, Hot Springs and Beaumont complain of the Board’s failure to grant them certain improved service.

The large number of routes and proposed routes considered by the Board in its proceedings, and the multitude of parties and intervenors who participated, produced a record of unusual length and complexity. The joint appendix distilled from the record by the parties and filed in this court consists of 671 pages. There are 359 pages of briefs. After studying all of this material we have concluded that the statement of the case in the Board’s brief presents a fair summary of the proceedings before the Board and of the pertinent facts; accordingly, we shall follow this summary in our statement of the cases.

I.

The Central 81 case was designed primarily to examine local service needs in the southwest, and granting the applications of Texas International in that case would, in connection with the carrier’s existing route structure, have permitted service between Houston and St. Louis [971]*971via Memphis and intermediate points other than Memphis.

The Gulf States case was designed to examine long haul service needs, and the Texas International applications in that case likewise were for service between Houston and St. Louis either directly or via Memphis as well as service from New Orleans via Memphis to St. Louis and Chicago and between any combination of these points.

Texas International here challenges the Board’s actions insofar as they denied its applications and granted American Airlines (American) a Houston-St. Louis route and Southern Airways (Southern) routes between Memphis-St. Louis and Memphis-Chicago. Texar-kana’s complaints are the same in both eases, namely, that the Board should have authorized Texarkana-St. Louis service in addition to other services to Texar-kana which were authorized.

The Central 81 Case

The Central 81 case was instituted by the Board in May 1965 (Order E-22227) for the purpose of restructuring Central Airlines’ Route 81 in an effort to eliminate uneconomic segments and points, and to realign the route so as to give the carrier access to a greater volume of traffic, reduce subsidy, and provide more convenient service to the traveling public.3 As a result of various orders expanding the issues, the proceeding was converted into a vehicle for “reappraisal of much of the local service needs in the southwest area”.

The issue pertinent to this case was whether the public convenience and necessity required additional service between Memphis and St. Louis, a market in which Delta Airlines was then the only carrier, and, if so, who should provide it. When the Board converted the case into a local service area proceeding, it consolidated several applications by Texas International for new authority (Order E-23158). Grant of these applications would have made possible not only Memphis-St. Louis service by Texas International, but, by reason of Texas International's existing authority, nonstop and one-stop service between Houston and St. Louis, either via Memphis or via other gateways by-passing Memphis,4 and between New Orleans and St. Louis, via Little Rock or Jonesboro.5

Southern sought consolidation in this case of several applications relating to Memphis-St. Louis service. The first (Docket 17142), extending its existing New Orleans-Memphis segments would have made possible a one-stop St. Louis-New Orleans service. The second docket (17141) seeking a new segment between Memphis and St. Louis would have made [972]*972possible a two-stop service.6 By order E-23686, the Board denied consolidation of the first of Southern’s applications on the ground that it did not desire to consider additional usable St. Louis-New Orleans service in this proceeding; however, the Board consolidated Southern’s second application, to permit two-stop St. Louis-New Orleans service. In the same order, the Board put Texas International on an equal footing with Southern by imposing a pretrial restriction, requiring Texas International to make two intermediate stops on any St. Louis-New Orleans service it might operate under a grant of its previously consolidated applications.

Also consolidated into the Central 81 case was a petition by Texarkana for local airline service over a number of routings (Docket 16366). Among the routes sought by Texarkana were (1) Texarkana-Houston via Shreveport; (2) Texarkana-New Orleans via Shreveport; and Texarkana-St. Louis via several alternate routings including a Hot Springs, Little Rock, Jonesboro, routing.7

After evidentiary hearings, the examiner issued his initial decision in the Central 81 case on April 12, 1968. With respect to Memphis-St. Louis authority, he found that additional service between these points was required and that a local service carrier should be selected because of the reduction in subsidy need which the service would be likely to produce. (Initial Decision (I.D.) pp. 21-22). In selecting among the local service applicants, the examiner stated that he was unable to evaluate Texas International’s application for operations over this segment since it had failed to submit plans or estimates for a St. Louis extension from Memphis only; rather, its proposal consisted of an integrated package of plans, revenues, cost, etc., for a Houston-St. Louis service not only via Memphis but also via Little Rock and Jonesboro. Consequently, the examiner denied Texas International’s application for this single segment. Considering that segment alone the examiner found that Ozark rather than Southern should be selected.8 His choice was based upon findings that Ozark’s operation of the route would produce an operating profit of $471,000 and a subsidy need reduction of $202,000 (as opposed to an operating profit of $397,000 for Southern, and a subsidy need reduction of $69,000), and that Ozark would provide greater benefits in terms of new single-plane service (I.D., p. 23).9

Turning to Texas International’s applications for new Houston services, the examiner rejected them. He found that Texas International could operate the [973]*973route “at a profit of $140,000” if it were the only carrier to obtain the Memphis-St.

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444 F.2d 969, Counsel Stack Legal Research, https://law.counselstack.com/opinion/texas-international-airlines-inc-v-civil-aeronautics-board-cadc-1971.