Context The Civil Aeronautics Act of 1938 instituted tight federal control over almost all US commercial air transport, initially by the
Civil Aeronautics Authority, but that power passed to the
Civil Aeronautics Board (CAB) in 1940. Airlines were required to be certificated by the CAB, but those flying scheduled service prior to the 1938 Act were grandfathered and the CAB certificated 19 domestic scheduled passenger airlines this way in 1939–1941. The 16 still flying after World War II were the domestic
trunk carriers, and in many ways the CAB regulated the US airline industry in their interests. In the period 1943–1950, the CAB certificated another set of domestic scheduled airlines, the
local service carriers (initially called feeder carriers), to fly routes to small cities. Competition was suppressed; the CAB determined ticket prices and what routes scheduled airlines flew. combine. Post-World War II demand overwhelmed the trunk carriers and the CAB, which was "lethargic" and "stunted" by the war. For instance, there was a month-long waiting list for air travel from Washington, DC to Dallas. In 1946,
Fortune magazine had a 12-page article about industry's struggle to handle massive post-war demand.
The nonscheduled loophole In theory, after World War II, the trunk carriers and (as they were certificated) the feeders were the only airlines providing US domestic scheduled service. But under a pre-war CAB exemption, nonscheduled carriers did not need a certificate, an allowance made so companies like
fixed base operators (FBOs) could offer small aircraft charters without CAB approval. In August 1944, the CAB launched an investigation of the post-war role of nonskeds. But as war ended, easy availability of war-surplus aircraft and war-trained pilots resulted in a flourishing of operators using the nonscheduled loophole. Some had transport-class aircraft like
DC-3s, and some flew scheduled service. The study concluded May 1946 with the CAB coining the term "irregular" for such operators (versus "regular" service seen as typical of scheduled flights) and required them to register (essentially to gather data) and subjected them to the parts of the 1938 Act that forbade unfair and deceptive practices. The CAB also made an example of two nonskeds, finding they illegally engaged in scheduled service. The CAB issued a total of 162 "letters of registration" for "large" irregular carriers (those with transport-type equipment), as distinct from FBO-type operators for which the exemption was intended, finally freezing approvals in August 1948. As of June 1948 (the date of its 1948 annual report) the CAB had issued 142 such letters, but only 109 of the carriers were active. The CAB issued another dozen letters to non-certificated pure cargo carriers.
Coach Coach class was an irregular carrier innovation. The CAB forced scheduled carriers to adopt it, but still took over a decade to become the prevailing class combine but was unrelated to the later
CIA airline combine. The CAB shut it down early 1956, after earlier subjecting it to stringent conditions as an alternative to revocation for flying scheduled service New York-Chicago-Los Angeles Irregular carriers could charge low fares because of high-density seating and no-frills service. Seats were four-abreast in DC-3s and five-abreast in DC-4s (one more than normal) with reduced
seat pitch, e.g. from 40 inches to 33. This became known as coach class. With interior reconfiguration, a DC-4 could carry as many as 80 people, up from 50–55. It was generally conceded that irregular carriers invented coach class and the resulting demand expansion. The CAB had to push certificated carriers to offer coach, sensitive to the fact that only the wealthy could afford first class. Coach RPMs only exceeded first class (see
Graph 2) in 1960, but even then the CAB was still having to push scheduled carriers to expand coach class. combine providing scheduled service, primarily Miami-New York/Chicago. The CAB revoked its authority March 1957.
1949–1955: from death sentence to supplemental From 1949 to 1955, the CAB swung between suppression and accommodation of irregular air carriers. In 1949, it eliminated the original blanket exemption that enabled irregular air carriers and required each to apply for an individual exemption. 95 did so, but 46 others fell by the wayside. This was seen as a “death penalty” and by 1951, most of the surviving irregulars were either subject to an enforcement action or preliminary disapproval of their individual application. The CAB also shut down specific offenders, like
Standard Air Lines in 1949,
Viking Air Lines in 1950 and others for scheduled service and other violations. By 1958, the CAB had shut down 18 irregulars or supplementals this way. But the irregulars had their supporters, like the Justice Department. 1949 US Senate hearings credited irregulars with, among other things: • Allowing those that could previously not afford it to fly • Playing a key role in the Berlin airlift, in contrast to the subsidized scheduled carriers • Low air freight costs allowing Alaskans to eat fresh fruits and vegetables. Alaska's governor was big fan. flying in the livery of "
South East Airlines", the Peninsular Group
combine's ticket agency The CAB had trouble with irregularity: defining something in terms of a negative resulted in an "elusive and shifting concept." The CAB tried several times to nail it down. Even if individual carriers remained irregular (whatever that was), it was noted that a ticket agent representing many irregular carriers might cobble together effectively scheduled service on big routes. If the agent was independent, it was unclear the CAB could prevent this. The Korean War showed once again that the irregulars could be useful; they carried over 50% of the military charter airlift. A 1949 appeals court ruling required the CAB give an irregular carrier a hearing before shutting it down, increasing the difficulty of possibly revoking dozens of carriers. In 1951, the Senate again weighed in, lambasting the CAB for oppressing the irregulars while subsidizing "high-cost luxury air service for a small part of the population." So the CAB rolled irregular carrier issues into an investigation, kicking the problem into the future, while, as discussed below, still pursuing specific offenders. When the investigation finished four years in the future (December 1955) the CAB was conciliatory. It acknowledged the contributions of the irregulars for things like coach class, Berlin and Korea. It renamed these carriers "supplemental" because it was now their role to provide supplemental capacity through unlimited domestic charters and the ability to fly up to 10 scheduled flights per month per city pair, effectively swapping "irregular" for "infrequent." It extended these rights to 49 supplementals through a new blanket exemption. s shut down in 1957, after the
US Supreme Court refused to hear an appeal of the CAB's 1955 shutdown order.
1950s combines A combine was a group of irregular carriers flying under the brand of a group-controlled ticket sales agency, often with common services (e.g. maintenance or accounting) provided by other group entities. The biggest combine was North American Airlines Group (1949–1957), where ultimately five irregular carriers flew under the "North American Airlines" name using a common pool of crews and aircraft. In the case of North American, the carriers were ostensibly independently owned and operated but in practice tightly controlled. Using multiple carriers allowed each to fly "irregularly", while together offering scheduled service. North American was effectively a rogue scheduled airline, highly profitable for its partners, who had the money to delay shutdown until 1957 through public relations, lobbying and litigation all the way to the
US Supreme Court. -based
Air Services in March 1959 for being a
North Star combine carrier. Note livery similarities between this aircraft and Air America aircraft above The CAB pursued three other combines: • What the CAB called the
Peninsular Group, which flew in the name (and sometimes livery) of, successively, Safeway,
South East Airlines, and Atlantic Aircoach. The two main group carriers were
Peninsular Air Transport and
Aero Finance. It was a family firm: two brothers and a cousin owned/controlled the airlines, sisters owned the agencies, a nephew helped run them, etc. The CAB shut them in 1957. • The
North Star Group, which operated under other names including Flying Irishman, in which at least five carriers played a role over time:
Caribbean American,
Air America,
Air Services,
Central Air Transport and
Paul Mantz Air Services. On occasion combines swapped irregular carriers: for example, Central flew for North American before it flew for North Star and Paul Mantz would later fly for Skycoach, related below. The CAB started trying to shut down North Star in 1953. -based
Meteor Air Transport had three
C-46s and two
DC-3s and was profitable with 88% of revenue military, 39% passenger. By 1957 it had
DC-4s on transatlantic charters and an
FBO subsidiary, but in 1958 the IRS seized its assets. In 1960, no one came to a CAB hearing to determine its future. • The most persistent combine was
Skycoach (other names it used included Transcontinental.) Skycoach started as early as 1949. Its two main carriers,
Currey Air Transport and
Great Lakes Airlines (no relation to the later regional airline of
the same name), were shut down in late 1961 after extensive litigation including multiple federal appeals court cases and the US Supreme Court declining to take further appeals. Skycoach used
Monarch Air Service, in the early-mid 1950s and the CAB also found
Trans-Alaskan Airlines was under Skycoach control. In 1961, Skycoach tried yet again by reviving two moribund carriers,
Quaker City Airways and
Paul Mantz Air Services (which earlier flew for North Star), renaming them
Admiral Airways, and
Paramount Airlines respectively. But 1962 legislation (discussed below) required all supplementals be recertificated by the CAB. There were no
grandfather rights so the CAB simply declined in the cases of Admiral and Paramount. Timetables survive from each of the four combines listed above. became
U.S. Aircoach in February 1950 and a year later had five
DC-4s and the CAB cited it for scheduled Hawaii flights. By 1953 it had only a
DC-3 and a
C-46. It did not fly 2Q1954 to 3Q1955 and again for almost a year ending Sep 1958. The CAB ended the carrier for financial weakness and lack of compliance disposition in 1959
1953 snapshot (initially
El Paso)-based
S.S.W., Inc., had a single
C-46 with 60% military revenues and lower-than-breakeven results. From September 1957 it was
dba Universal Airlines, no relation to later
Universal Airlines of
Ypsilanti. CAB suspended its license in September 1959 after stranding passengers because it could not afford to fix its
DC-6. Finally lost its license in 1960 In 1953, total irregular airline operating revenue was $70 million ($825 million in 2024 dollar terms). 55 irregular carriers reported non-zero revenue but one,
Seaboard & Western, accounted for almost 20% of total irregular carrier revenue. By comparison, the total US certificated (scheduled) carrier industry operating revenue was $1.317 billion, so irregular carrier revenue accounted for 5% of the joint certificated/irregular total. Included in that $1.317 billion was $13.5 million in scheduled airline charter revenue, little more than 1%. A breakdown of irregular airline revenue is shown in
Table 1. Note: • The irregulars had a significant scheduled business. These figures understate how large that was relative to what scheduled airlines would report because irregular carriers paid much larger commissions, as much as 45%, while scheduled carriers paid only 5%. Pre-commission gross revenues (what consumers paid) were thus much greater per dollar of reported revenue for irregular carriers than for scheduled. Either way, however, irregular carrier scheduled business was small relative to the $1.044 billion that certificated carriers reported in scheduled flight revenue that year. The CAB had continued to permit the operation of supplementals through its power of exemption. But that power required the CAB to show that certificating the supplementals would be an undue burden on these carriers, and the CAB had not done that. So in January 1959 the CAB certificated the supplementals. Of 49 exempted in 1955, only 23 survived the 1959 certification process (with a further two to be decided), although appeals and litigation delayed the end of many carriers the CAB deemed unacceptable. That certification was overturned April 1960: • The CAB could not legally regulate frequency. So the limit of 10 frequencies per route per month was illegal. • Certificates were legally required to specify end and intermediate points of routes. Making endpoints any two cities in the country (as it effectively was for supplementals) frustrated the clear intent of the legislation. Congress intervened with an interim bill allowing the status quo while it considered a solution.
Senate and
House split; the House wanted to limit the supplementals to charters, the Senate to let them keep limited scheduled authority. In November 1961, a
notorious crash (discussed further below) by a financially-shaky supplemental,
Imperial Airlines, swung momentum towards the House, and in July 1962, Public Law 87-528 turned supplementals into pure charter carriers after a two-year transition. The law required supplementals to go through another certification, at the end of which, in 1966, only 13 were left.
1960 military charter changes for the military. The CAB recertificated CEA as a supplemental in 1959, only for CEA to sell its certificate to
President Airlines in 1960 to focus elsewhere, eventually becoming a major government contractor.
Westair Transport for 13 months for violations contributing to 28 deaths in a June 1950
ditching, that occurred months after the
Civil Aeronautics Administration asked the CAB to suspend Westair. On suspension, Westair operated illegally for
Flying Tiger Line. In 1959 the CAB approved the same management for a supplemental certificate. The
IRS seized its assets January 1960 , based on a
novel by
Ernest K. Gann, who flew for Transocean. The carrier collapsed in early 1960 ) into bankruptcy in 1954. New owners bought it for literally $20, the CAB refused to allow them to operate, but by piggy-backing on litigation the moribund carrier was able to stave off the final end until March 1961 s but a significantly negative net worth. By 1956, the CAB suspended its operating authority, with full revocation in 1961 forced a change in
Regina Cargo Airlines ownership, moving it from
Teterboro to
Miami. It crashed again in 1953 (21 dead). Regina had Peninsular Group
combine links. Its new owner at first hid his ownership from the CAB, but it did not seem to mind. In 1960 Regina became
Imperial Airlines. A
1961 crash (77 dead) ended Imperial and
changed the supplemental business certificate in 1960. In September 1961 the above aircraft
crashed in
Shannon, Ireland killing 83, and later President stranded passengers in Ireland and London. It turned out President had a new owner, a property developer/preacher with "grandiose" plans (as the press put it) to buy 34
Boeing Stratocruisers. CAB records show minimal operations in 1962 and its certificate was cancelled in August As
Graph 3 shows, the military was the largest revenue source for 1950s supplementals. For example, in 1956, ten supplementals supported
DEW Line construction in the arctic. Prior to 1960, the military awarded charter contracts by competitive bid and accepted bids from
Part 45 carriers, airlines not subject to CAB regulation because they were not
common carriers. Part 45s could undercut CAB carriers so the CAB was forced to allow its carriers to also bid, making military charters a rare competitive free-for-all in a system that otherwise suppressed competition. For instance, in 1959, the
Military Air Transportation Service (MATS), the governing military agency, invited 93 airlines to bid for contracts. In the same year,
Overseas National Airways won over half the international military contract dollars for 1960, stripping
Pan Am and
Trans World Airlines (TWA) of their contracts. MATS ran its own scheduled flights with military transports. The airlines, and others, believed the military should not provide routine air transport. In February 1960, the
US Department of Defense (DOD) published a report endorsed by
President Eisenhower: MATS was to reduce flights in favor of airlines and only "air carriers" per the 1958 Federal Aviation Act were to fly military charters. This was the definition of a CAB-regulated air carrier, so it excluded Part 45s. Further, contracts were to go to carriers with militarily useful aircraft. The aim was to renew the country's commercial cargo fleet, viewed as dangerously inadequate. With Part 45s excuded, the CAB ended competitive bidding and set uniform military charter rates at significantly higher levels, in particular, ones profitable for scheduled carriers. With price no longer a factor, DOD allocated contracts by an airline's participation in the
Civil Reserve Air Fleet (CRAF), a pool of airliners the military can tap in emergency. The military assigned "mobilization values" to aircraft in CRAF based on speed (favoring jets), capacity, utility and range. DOD liked long-range convertible jets that could carry passengers or cargo. The highest-rated narrowbody was a "stretch" convertible
DC-8-63CF, which had a higher rating than a passenger 747. By the late 1960s/early 1970s, seven supplementals flew the DC-8-63CF or the closely related DC-8-61CF: American Flyers, Capitol, ONA, Saturn, Trans International, Universal and World.
Standard Airways cited lack of convertible jets and resulting inability to get much military business as a factor in its 1969 collapse. Of course, in 1960, no supplemental flew jets. In fact, even in 1964, the supplementals still had only six long-range jets between them, against 427 for scheduled carriers, giving them a huge edge.
1961 Imperial Airlines crash In November 1961, supplemental
Imperial Airlines crashed a Lockheed Constellation, killing all 74 soldiers aboard. The investigation showed the crew was incompetent and put the safety record of the supplementals in the spotlight, revealing it to be 30 times worse than that of scheduled carriers. DOD came under pressure to tighten standards, and launched its own airline inspections. Some supplementals that failed inspections were small, like
Airline Transport Carriers (
dba California Hawaiian), but among those that failed was also
United States Overseas Airlines (USOA), one of the largest supplementals. This contributed significantly to USOA's 1964 demise. And a 1963 non-fatal crash at
Standard Airways surfaced maintenance issues leading DOD to crack down, contributing to 1964 bankruptcy.
1965 vs 1955: mortality, new leaders, substantial profitability for some CAB enforcement actions against combines, the impact of new military charter allocation rules, the DOD's crackdown after the 1961 Imperial Airlines crash and the shifting legal status of supplementals, including recertifications, all contributed to a big reduction in the ranks of supplementals from 49 in 1955 to 13 by the end of 1965, this number also reflecting the November 1965 merger of
AAXICO Airlines into
Saturn Airways (known as All-American Airways in 1955). These 13 were not all in good health: the future of three was in doubt, with operations suspended or only recently resumed. At year end 1965, only 11 supplementals were operating but this returned to 13 at the end of 1966. The 1965 lead carriers by revenue were also completely different from those of 1955. Of the top five supplementals in 1955, one (Seaboard & Western) became a scheduled cargo carrier while the other four were out of business by 1965. In 1965 the three largest supplementals were
World Airways,
Zantop Air Transport and
Trans International Airlines (TIA). In 1955, Los Angeles Air Service (the original name of TIA) had the 18th and World Airways the 19th largest revenues. Supplemental air carriers of year-end 1965: and 1961 respectively. Another exit from 1955 ranks was
Trans Caribbean, which became a scheduled passenger airline in 1957. The CAB set military rates so even high-cost scheduled carriers could make money. Supplemental costs were far lower, so World and TIA made high military charter profits. For example, from 1965 to 1966, World's revenues increased from $33 to $50 million (military accounting for 78% and 75% of charter revenue respectively). Its 1965
operating margin was 36%, dropping slightly to 33% in 1966. World
went public in 1966, owner Ed Daly's remaining 80% stake was worth $280 million (over $2.7 billion in 2024 dollars), a high return on the $50,000 he spent to buy World in 1950. Not all supplementals were so lucky. In 1966, four of 13 supplementals made a loss and two broke even. Some big names failed between 1955 and 1965. Transocean stopped operating early 1960 after years of high losses. As previously related, USOA failed a military inspection in the wake of the Imperial Airlines crash. Its finances deteriorated and the CAB shut it in 1964 after it failed to pay employees. Overseas National Airways entered bankruptcy in 1963 but was revived as effectively a new company by an investor group at the end of 1965, with jets in service by summer 1966.
Capitol Airways was one supplemental near the top of the industry at both ends of the 1955–1965 period. From 1956 to 1960 it was one of the top four supplementals by revenue. In 1965, Capitol was still number four, having put its first jet in service in 1963.
1960s Vietnam bubble of
Airline Transport Carriers (ATC), which tried Los Angeles-New York before founding
California Central Airlines (CCA), a pioneering
intrastate airline (1949–1955). In 1952 ATC started CHA, which survived 1954 ATC bankruptcy (CCA did not). The CAB shut ATC in 1962 after the military deemed it unsafe was a race and Hollywood stunt pilot. His airline,
Paul Mantz Air Services, worked for the
North Star combine in 1953, but the CAB let him to keep his operating authority. New owners renamed it
Paramount Airlines in 1961 and started flying for the
Skycoach combine. The CAB used a new law to shut it in 1962. with aviation pioneer
Charles F. Blair Jr in the cockpit.
United States Overseas Airlines allied military charters to scheduled flights that reached as far as
Okinawa, but the CAB shut them in 1964 for being "irredeemably financially unfit" The 1960s saw an enormous military charter boom as a result of the combination of Vietnam-driven military charter demand, the transfer to the airlines of volume previously carried the military's own flights and the rise in rates from the end of competitive bidding. From fiscal 1960 to fiscal 1969, DOD international RPMs increased over eight times. Moreover, while in 1960, charter flights supplied only 48.5% of international military RPMs (the balance supplied by the military's own flights), in 1969 that proportion jumped to 93.9%. However, scheduled carriers, by dedicating much larger jet fleets to CRAF, grabbed most of the business. For instance, in 1968
Pan Am had 108 jets enrolled in CRAF, twice that of any other airline, and its fleet included 32 convertible
Boeing 707-321Cs. In Fiscal 1968, Pan Am, by itself, received $99.8 million for international military charters, almost as much as the entire supplemental industry, which received $101.7 million. Driven by this military charter bounty, charter RPMs hit an all time high of 18.5% of total US airline industry RPMs in 1969. Of that, scheduled US carriers took over 60% (see
Graph 1). in 1965, with AAXICO the surviving mgmt/ownership After 1969, military charters diminished substantially, with 1975 military charter RPMs down 74% from the 1969 peak. Cargo dropped even faster, because the US military took delivery of
C-141 Starlifters from 1965 and
C-5A Galaxies from 1970, which it put to work hauling military cargo. Military charter cargo ton-miles (one ton of freight transported one mile) in 1975 were down to just 5% of the 1967 peak. with one-way passengers rising from 3 million in 1963 to 11 million in 1971. Scheduled fares were even higher than in the US. For instance, in 1971, the standard New York-Paris economy fare was 1/3 higher than New York-Honolulu, which was over 1,200 miles further. IATA, the international scheduled airline club and then a cartel, set international fares. The CAB provided IATA a waiver from US antitrust law. Most governments backed IATA with air service agreements that required IATA fares, plus most IATA carriers were government owned or controlled. In 1973, IATA carriers carried 94% of international scheduled traffic. Even most notable non-IATA carriers, like
Aeroflot, used IATA fares, with only a few non-IATA rebels charging lower prices, like
Loftleidir Icelandic. Real competition came from charters, which carried 28% of international traffic in 1972 with prices set by supply-and-demand. Charters cost less than half the usual IATA scheduled fares. Competition between IATA and charter carriers was complex. Some prominent IATA carriers had non-IATA charter subsidiaries (e.g.
Lufthansa's
Condor subsidiary, or
Air France's
Air Charter International). And as discussed below, many prominent IATA carriers also engaged in wide-scale illegal rebates of IATA scheduled fares. On the Atlantic, charter share rose from 16% in 1963 to 32% in 1971, but in some segments it was far higher: in 1969, over 50% of US-Germany flights, and over 80% of California-Germany flights, were charters. ,
Standard Airways started as San Diego-based
Standard Air Cargo and led an intermittent existence. From late 1960 to 1964 it flew "Pink Cloud"
propliner scheduled flights to
Hawaii, but a 1963 accident shook its weak finances and it stopped operating January 1964. Revived by an investor group in 1966, it flew DC-9s and Boeing 707s with an unusual red and gold livery until collapsing in 1969
Key market Transatlantic passengers on the supplementals using affinity charters (the main type, discussed below) grew rapidly from 32,000 in 1963 to 781,000 in 1969. From 1966, six supplementals had Atlantic rights, with Atlantic charters accounting for 43% of their civil revenue in 1968, at which time affinity charters were 93% of the total. Supplemental transatlantic passengers then doubled from 1968 to 1969 (also the first year that supplemental civil charter revenue exceeded military). In 1974, the Atlantic accounted for 99% of ONA's civil revenue, 71% of Capitol's and 83% of Saturn's. By 1976, the CAB said the Atlantic accounted for 75% of all supplemental civil operations. Supplementals without Atlantic authority mostly died: Standard (1969), Purdue (1971), Modern (1975) and McCulloch (1977, successor to Vance International). Those with Atlantic authority mostly survived: Capitol, ONA (voluntarily liquidated 1978 as discussed below), Saturn, TIA, and World. The exceptions were Johnson Flying Service (no Atlantic rights but sold to
Evergreen Helicopters in 1975), Southern Air Transport (no rights, but a
CIA-subsidiary until 1973, then not a supplemental thru 1977) and Universal (successor to Zantop), which bought American Flyers in 1971 for its Atlantic rights. The CAB tried to strip Universal of Atlantic rights in 1972 and while
President Nixon prevented it, the uncertainty had already killed Universal by cutting it off from finance. , creating
McCulloch International Airlines (MIA), which initially took potential buyers to McCulloch's
Lake Havasu City real estate development
Affinity and other charters The supplementals were limited in the kinds of charters they could offer. Until the early 1970s these were: • Affinity (or pro-rata) charter: sponsored for members by a club or organization (that existed for purposes other than travel). Passengers had to be a member for at least six months prior. The cost of a charter was shared, pro-rata, among those flying, so price per person depended on how many passengers flew. From 1964, organizations could share an affinity charter. • Single entity: for instance, a corporation charters a flight to Europe to reward top salespeople. • Study trip: a charter in conjunction with education, e.g. students studying in Europe for the summer. • From 1966 the CAB allowed inclusive tour charters (ITC) but required three overnight stops at least 50 miles apart with high minimum spend/minimum stay requirements. The US tour market remained underdeveloped: In 1972, only 150,000 Americans traveled on ITCs compared to 12 million Europeans. Affinity charters were dominant until the last years of the regulated era, but had many problems. They were discriminatory; consumers were excluded if not a member of a "charterworthy" club (the
term of art) and such members tended to be wealthier. Charter prices were much lower: in 1965, a typical New York-London charter fare was 20% lower than the lowest fare available on TWA or Pan Am. People lied to get onto affinity charters; violations were "rampant," with an active gray and black market. ONA's CEO noted even the clergy would lie to fly such charters because the CAB was withholding low fares from the public for no good reason. In 1972, the CAB created the Travel Group Charter (TGC) as an affinity replacement. Any group of 40 could use a TGC, but the CAB ringed the TGC with so many conditions it was hardly used, unlike the simpler Advance Booking Charter (ABC) created in Canada and Europe in the same timeframe. In 1975, charter type shares for supplementals on the Atlantic were 73% affinity, 13% ITC, 9% single entity, 1% TGC.
CAB enforcement The CAB vigorously pursued enforcement against supplementals. Supplementals required passengers to sign statements confirming they met charter requirements The
1973 oil crisis hit hard, with increased fuel prices adding $1 billion to 1974 scheduled airline costs of $14 billion. Starting 1970, the CAB pursued an unannounced route moratorium, no longer responding to new route requests. The CAB also coordinated capacity reductions among scheduled carriers. In 1973, Nixon appointed
Robert D. Timm as CAB chair, who pushed for a 12% industry return on investment and the CAB refused any fare reduction that threatened this goal. The CAB was determined to limit low fares: from 1971 to 1974, 2/3 of the CAB's field investigative efforts were directed towards ensuring low-fares weren't breaking the law. In 1973–1974 the CAB pushed supplementals to coordinate Atlantic pricing with scheduled carriers. When negotiations between supplementals and IATA broke down, the CAB imposed minimum charter prices ("guidelines") as part of a plan to help financially distressed Pan Am. Ensuring Pan Am's survival was a
Nixon administration priority. Atlantic charter prices had always been set by the market and the CAB had no right to set prices internationally, but the CAB had the right to investigate and promised to investigate charter rates below the minimums. The
Department of Justice believed this to be illegal. Senator
Ted Kennedy, with the assistance of future Supreme Court justice
Stephen Breyer, held hearings on this topic in November 1974. The Kennedy hearings on CAB conduct that started February 1975 were later seen as kicking off a swing towards deregulation that culminated in the 1978 Airline Deregulation Act, but Kennedy saw the November 1974 hearings on transatlantic charter pricing as starting the process. The supplementals challenged the CAB in court and got a stay. Meanwhile, Timm was caught vacationing with scheduled airline CEOs, paid for by aircraft manufacturers and President Ford did not reappoint him as CAB Chair for 1975. The CAB dropped the minimum charter price policy February 1975.
1975: fall of South Vietnam DC-8 at
Bien Hoa Air Base near
Saigon in 1970. Note aircraft name. an AFA
Electra in 1966. A Pittsburgh investor bought AFA in 1967 and moved it to
Harrisburg in 1969. Money-losing AFA was sold to
Universal Airlines in 1971 and later
Oakland-based
Universal Airlines was
Zantop Air Transport after a 1966 ownership change brokered by
Frank Lorenzo. Universal bought
American Flyers Airline for its transatlantic rights in 1971, but failed the next year, leaving a need to fly autoparts, quickly filled by
Zantop International Airlines -based
Modern Air Transport (MAT) moved to
Trenton, New Jersey in the 1950s. From the late 1950s the airline flew customers for a Florida land company, which bought MAT in 1966, moving it to Miami. Never profitable thereafter, MAT's only money-maker were
Cold War West Berlin charters. Cut off by its parent company, MAT collapsed in 1975 .
Evergreen Aviation bought JFS in 1975; the CAB stopped earlier attempts by
Executive Jet Aviation (today's NetJets) and
US Steel World Airways made headlines at least twice during the fall of
South Vietnam in 1975. One was the last flight out of
Da Nang on 29 March 1975, with thousands of desperate people rushing a World
Boeing 727, injuring many including CEO
Ed Daly. The damaged aircraft took off with hundreds of people on board, including in the cargo compartment. The other was World's activities airlifting Vietnamese orphans, including outfitting a 747 as a flying hospital, bringing hundreds of children to the US (part of a wider effort known as
Operation Babylift). As previously mentioned, the supplementals were deeply involved in Vietnam through military charters. In Fiscal 1969, World's international military charter revenues were $52 million (over $400 million in 2024 terms), the third largest that year after
Pan Am ($65 million) and
Continental ($55 million). All American Airways that became
US Airways, changed its name to
Saturn Airways in 1960 and bought
AAXICO in 1965, leaving AAXICO in control. Post-AAXICO Saturn was profitable, freight-oriented and
Oakland-based. It sold out to
Trans International in 1976
1975 to 1978: regulatory relaxation The regulatory pendulum now swung the other direction. In 1975, following the Kennedy hearings,
President Ford appointed pro-competition CAB chair
John E. Robson. This was followed by
President Carter's 1977 appointment of
Alfred E. Kahn, leading to the 1978
Airline Deregulation Act. In autumn 1975, the CAB approved European-style one-stop inclusive tour charters (first impacting summer season 1976) followed in autumn 1976 by European-style Advance Booking Charters (ABCs). Other than being booked well in advance through a tour company, ABCs were little different than a scheduled flight. Charters boomed in 1976, especially to places like Hawaii and Las Vegas. Even greater success in 1977 with the new ABC seemed certain. The
New York Times and others ran stories about how the future of travel belonged to charters. But in spring 1977,
American Airlines (then mostly a domestic airline) introduced Supersaver fares, designed to fill empty seats with charter-type customers. US scheduled carriers had lots of empty seats: in the early 1970s the CAB had a policy of targeting 55% load factors, up from 50%. By the end of that summer, it was clear Supersavers were destroying domestic charters. However, the new charters did succeed in dislodging affinity charters as the prevalent type of charter.
Capital) had a base at
Wilmington, Delaware 1958–1970 before moving base and HQ to
Smyrna, Tennessee. Capitol was prominent throughout the CAB era but, as
Capitol Air, was an early deregulation casualty in 1984 In September 1977, British charter carrier
Laker Airways started
Skytrain service from New York to London. Skytrain was a no-reservation scheduled flight at a charter fare, something Laker had wanted since 1971. Scheduled airlines responded with low fares of their own. In the six months ending March 1978, the London-New York market expanded by 39%; the number of low fares (including charters) sold across the Atlantic exploded by over 300% in the first quarter of 1978 over the prior year. Unsurprisingly, this hurt charters: in the first six months of 1978, New York-London supplemental traffic declined 42% from the year prior. In 1978, to help keep the charter carriers in the game, the CAB created a "public charter," with basically no requirements: no advance purchase, no minimum group size, no minimum spend, no minimum stay, etc. But supplementals needed to price below scheduled fares to attract customers. In early 1978, the required spread was estimated as $50 round trip between London and New York. In winter 1977/78 and 1978/79, the lowest New York-London scheduled fares were at or below this spread, approaching charter levels. changed the name to
Trans International Airlines (TIA) in 1960. Kerkorian sold to
Transamerica Corporation in 1968 for a fortune. TIA bought
Saturn in 1976 to end the CAB era as the largest supplemental. But when offered for sale in 1986, then
Transamerica Airlines was worth more dead than alive.
Deregulation: end of the supplementals The four remaining Atlantic-flying supplementals (Capitol, ONA, TIA, World) reacted in very different ways to approaching deregulation. By the end of 1978, Capitol, TIA and World Airways applied for and received authority for scheduled Atlantic service. By contrast, ONA chose to cease operating September 1978, the culmination of failed diversification, poor financial results and three aircraft crashes within a 16 month period from November 1975 through March 1977, including the loss of two widebody
DC-10s within two months. In the face of regulatory uncertainty, ONA liquidated outside bankruptcy, selling aircraft into a strong market. flying cargo
C-46s to the Caribbean. Certificated in 1977 as a supplemental cargo carrier, RIA reorganized as a passenger charter carrier in 1984 but collapsed in a 1996
Federal Aviation Administration post-
ValuJet Flight 592 crackdown In October 1978,
President Carter signed the
Airline Deregulation Act, which was literally the end for supplementals. The Act replaced the word "supplemental" with "charter" (at least for economic purposes; see
Legacy below) and ushered the US industry into deregulation as of 1 January 1979. The Act immediately diminished the CAB's powers and further stripped its authority in stages until the agency's end date of 1 January 1985. Until then, the CAB spoke of charter air carriers, not supplementals. For instance, the CAB Handbook of Aviation Statistics Supplement for 1977 and 1978, published 1979, replaced almost all instances of the word "supplemental" with "charter" versus the earlier edition covering 1975 and 1976, published 1977. Effective 1981, the CAB abandoned the old categories of trunk, local service, charter, etc and simply grouped airlines by revenue. For a snapshot of the supplementals in 1978, see
1978 survivors below. secretly bought Miami-based, mostly-cargo
Southern Air Transport (SAT) in 1960, flying it in support of US operations in Vietnam. The CIA sold then-
uncertificated SAT in 1973. SAT recertificated as a supplemental in 1977, becoming a large freight airline after deregulation, collapsing 1998 ==Legacy==