Western Air Lines, Inc. v. Civil Aeronautics Board

495 F.2d 145, 161 U.S. App. D.C. 319, 1974 U.S. App. LEXIS 10009
CourtCourt of Appeals for the D.C. Circuit
DecidedFebruary 20, 1974
DocketNos. 72-1033, 72-1162 and 72-1165
StatusPublished
Cited by19 cases

This text of 495 F.2d 145 (Western Air Lines, 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
Western Air Lines, Inc. v. Civil Aeronautics Board, 495 F.2d 145, 161 U.S. App. D.C. 319, 1974 U.S. App. LEXIS 10009 (D.C. Cir. 1974).

Opinion

LEVENTHAL, Circuit Judge:

These consolidated petitions for review of an order of the Civil Aeronautics Board challenge the Board’s decision to suspend the authority of two air carriers to operate on certain routes contained in permanent certificates, issued to them by the Board, pursuant to § 401 of the Federal Aviation Act, 49 U.S.C. § 1371. Acting under its power to “alter, amend, modify or suspend any . . . certificate ... if the public convenience and necessity so require,” 49 U.S.C. § 1371(g), the Board suspended the authority of Pan American World Airways and Western Air Lines to serve certain cities in Alaska. Simultaneously, the Board renewed the authority of another carrier, Alaska Airlines, to serve the same cities. Petitioners Pan American and Western ask reversal of the Board’s order insofar as it suspends their authority to serve these cities. The carrier petitioners are joined by petitioner State of Alaska and intervenors the City of Juneau, Alaska, and the Juneau Chamber of Commerce (“the Juneau parties”). The Juneau parties, in addition, challenge the authorization of Alaska Airlines to operate over the routes in question. Intervenor Alaska Airlines joins the Board in urging that the award of routes to it, and the suspensions of the other carriers, were proper. For the reasons set forth below, we affirm.

I. STATEMENT OF FACTS

A. Background of the Alaska Service Investigation

The Board orders under review stem from a proceeding known as the Alaska Service Investigation, instituted in March, 1969, as the latest of a series of periodic examinations by the Board of air transportation to and within Alaska. The previous such comprehensive investigation was conducted in 1965. After completion of that investigation, three carriers held authority to provide service along the Southeastern Alaskan routes which are the subject of this litigation : Pan American World Airways, a carrier with international operations, among them service from Seattle to Juneau and Fairbanks, Alaska; and Pacific Northern Airlines and Alaska Airlines, two regional carriers operating between Seattle and a variety of small cities in Southeast Alaska.1

The 1965 investigation had resulted in some adjustments to the Alaskan operations of these carriers. Pan American’s authority to provide service between Seattle and Juneau was suspended for a seven-year period. At the same time, Pan American became the sole provider of non-stop service between Seattle and [322]*322Fairbanks as a result of the simultaneous suspension of Alaska Airlines’ authority to provide that service.

The service which is in controversy in this litigation lies along the “inside” route from Seattle to Anchorage, a land route over Southeastern Alaska which includes the intermediate points of Ketchikan, Sitka, Juneau, Yakutat and Cordova. This inside route is to be distinguished from the direct, over-water route from Seattle to Anchorage.

As the 1969 Alaska Service Investigation began, two carriers were operating along the inside route. Western Airlines, a carrier serving many western continental U.S. cities, had acquired Pacific Northern Airlines by merger in 1967 and consequently was providing service, under a permanent certificate, between Seattle and Anchorage, including intermediate cities of Ketchikan, Juneau, Yakutat, and Cordova. Alaska Airlines, a carrier having predominantly intraAlaskan operations, part of which were conducted under temporary authority, provided service along the same route as Western, but lacked the authority (held by Western) to fly Seattle-Anchorage and Seattle-Juneau non-stop runs. Pan American’s permanent certificate embodied authority to operate between Seattle and Juneau, but the seven-year suspension of that authority, ordered in 1965, was still in effect.

During the course of the investigation, Western requested deletion of its authority to serve Cordova and Yakutat, on the northern segment of the inside route, because these operations were unprofitable. The Board granted Western’s request on a temporary basis but reserved a final decision until completion of its comprehensive review of Alaskan air transportation.

B. Decision of the Hearing Examiner

In his opinion the Hearing Examiner announced the following general principles which would govern the authorization of service and assignment to carriers :

To provide Alaska with optimum air service requires (1) integrating its entire air system so that the stronger markets will help support the weaker, (2) direct and one carrier service to the maximum extent possible, (3) maintaining competition where economically feasible, (4) service to the smaller isolated points even if subsidy is necessary, (5) coordinating mail service with passenger and cargo service, and (6) imposing government supervision and control to insure adequate service to the smaller noncompetitive points.

Examiner’s Initial Decision 16 (“I.D.”).

The Examiner noted the “peculiar problems” of air transportation in Alaska: dependence upon air transportation because of lack of other modes, and, at the same time, population, climatic, and geographic characteristics which make provision of air transportation difficult and expensive. I.D. 14. The Examiner stressed that at many small points in Alaska the demand for air transportation was insufficient to support competitive service. He concluded that there was a need to structure routes so as to provide for route cross-subsidization,2 but noted both that this need could not be the sole basis for an award, and that the interest of reducing govern[323]*323ment subsidy must not overshadow the need for adequate service (I.D. 16-17):

While it is important that the revenues from heavily traveled segments be made available to support operations over the weaker routes and to reduce subsidy, attempts to reduce subsidy and strengthen weak carriers must not overshadow the need for adequate service.
* * * * * *
Although good routes should be operated by those carriers which can use them to the greatest advantage in serving weaker segments and points, routes should not be awarded and competition eliminated merely to help the carriers with the largest operating deficits. There are numerous other causes for operating deficits besides poor route structure and lack of adequate markets. The Board should avoid route awards merely to cut subsidy and to help a weak carrier.

Four carriers made proposals to the Board for future service along the inside route. Western proposed to continue its Alaska service which remained after the temporary deletions approved by the Board. Alaska Airlines proposed continuation of existing service, and new service as well. Pan American intended to reinstate service on authorized routes upon expiration of its 1965 suspension. A fourth carrier, Wien Consolidated Airlines, then having entirely intra-Alaskan operations, also proposed new service from Seattle to Southeastern Alaska. I.D. 24. Two of these carriers, Wien and Alaska, were at that time sustaining net losses on their Alaskan operations and were receiving government subsidies.

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495 F.2d 145, 161 U.S. App. D.C. 319, 1974 U.S. App. LEXIS 10009, Counsel Stack Legal Research, https://law.counselstack.com/opinion/western-air-lines-inc-v-civil-aeronautics-board-cadc-1974.