CIVIL AVIATION A STUDY OF GOVERNMENT POLICIES AND PROCEDURES IN SELECTED FOREIGN COUNTRIES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A004300030001-0
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 205
• Document Creation Date: January 4, 2017
• Document Release Date: April 29, 2013
• Sequence Number: 1
• Content Type: REPORT

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ory40 CIVIL AVIATION
n -'
A STUDY OF GOVERNMENT 2 "
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[RESTRICTED CONFIDENTIAL
The studies. contained in this volume were prepared at the
rec_uest of the Presidentts Air Policy Commission. The Commis-
sion desired to ascertain the salient features of civil air
policy as they obtain in a selected group of eleven countries,
presenting the widest possible range of political, economic and
gec. raphic backgrounds.
In order to maintain uniformity in preparation, the infor-
mation eras collected on the basis of a questionnaire, of ithich
a copy is bound at the end of the volume. The questionnaire may
be opened at the side of the volume and. used concurrently in ex--
amin.;ne the individual reports, it has been a.ccording.y unneces-
sary to repeat the individual questions in the body of the re--
ports. Omission in any report of an item included in the
questionnaire indicates that the question was inapplicable to
the respective country or that satisfactory information is una-
vailable.
Other di;encies have assisted Central Intelligence Agency in
the collection of this data. The Department of State obtainer
reports from the Air Attaches and other US representatives in the
respective foreign capitals. The Office of the Director of Intel--
ligence, USAF, assumed primary responsibility for the collectio:.t
of data on civil aviation in the USSR. The Library of Congress
prepared a thorough report on civil aviation in pre-war GerWany.
Central Intelligence Agency has supplemented this data with
additional. information available from other sources? The opinions
ecpressed.in this study therefore do not necessarily reflect the
views of agencies other than Central Intelligence Agency.
A general analysis of the survey has been prepared by Central
Intelligence Agency and placed as the first document in this
volume. It gives an estimate of the significance of civil a-ri-'
ation outside the US from political, economic and strategic
points of view.
CE TFAL INT LLIGENCE AGENCY
10 November 1.9h7
Document No. Q O/
I NJ CHANGE in Class. o
'RESTRICTE6' ^ DEOLASSIFIED ..
Class. CHANCED TO; TS
f q p DDA Memo, 4 Apr 77 H
Y CONFIDEN~p i IALAuth: DD i REG. 77/1' .3
Date: iS d2 Y By: 11 f
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UNITED KINGDOM
FRki:CF
I'MINERLANDS
USSR
SliiiDM4
GREANY (PRE-i7AR)
CANADA
AItAZIL
ARGINA
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a
of the world?s civil air establishment from the standpoint of
Government policies and .procedures, The studies were prepared at
the request of the President?a Air Policy Commission, for the pur-
pose of ascertaining the salient aspects of civil aviation abroad
as related to national policy under the widest possible range of
conditions, -
The survey, as expected,, has encountered civil air operations
under extremely' varying conditions, The countries covered include
great powers (UK and USSR), as well as small nations (Netherlands)
and primitive economies (China, Peru), The survey has observed the
development of civil aviation under totalitarian governments,(USSR,
pre-war Germany) and under governments which have maintained an
unblemished democratic tradition (Sweden)? Some of the countries
are enjoying prosperity (Canada), while others (UK, France) struggle
for their very existence to overcome the enormous dislocations of
the war, ?any of the countries are situated advantageously across
the natural arteries of world air traffic, while others (Argentina,
Brazil) must attune their civil air policy to a more regional
primary interest.
These conditions,. as the survey confirms, exert a profound
influence on the varied objectives being pursued throughout the
world in the development of civil aviation. Civil air policy in a
given country is dictated by 'a combination of political and economic
factors, and by the country?s geographical position, and therefore
advantages of innate aptitude and enterprise can only begin to
operate after these basic conditions have set the stage,
Regardless of the limitations or handicaps under which every
country operates, almost universal recognition of the significance
of civil aviation prevails. There is scarcely a country which would
not imrediately expand its civil air activities if this were possible;
Policy=makers everywhere appear to recognize that civil aviation is the
most dynamic force in drawing the countries of the world physically
closer for better or for worse, and that the total potential of civil
aviation, including its ultimate military application, far transcends
its strictly peace-time importance, As early as 1930, an official
League of Nations report contained the statement that state participa-
tion in European civil aviation was an act of politics rather then of
economics. By 1938, the British had clearly understood the military,
significance of civil aviation, as evidenced in the Cadmon report,
which stated that the problem of the air is like "two sides of a
single coin," that is to say, "the military aspect of aviation cannot
fundamentally be separated from the civil aspect",. In 1940, the
Germans were er:oloying civil aviation as a geopolitical instrument.
A German geopolitician stated that "the ai.rplane"s speed and radius of
action makes thinking possible in terms of continents,"
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There is fall realization by countries fearful of invasion, as
well as by those which know that they may orb3 day be forced to engage
in large-scale military operations, that the man who are organizing
civil air transport today are establishing the means of carrying the
armies of tomorrow. The keen interest displayed by military authori-
ties of many countries in the progress of civil aviation in their ern
and other countries, appears to be explained by such considerations.
The eleven studies in this survey indicate that civil air policy is al-
most directly controlled by the military in five of the countries, and
strongly affected by military considerations in four others, Chile only
in two countries is no control, by the military exercised. In this con-
nection it is notevorchy that all of the eovntries having porerfua i.'dl-
itary establishments permit them a measure of control over civil avia-
tion.
It might be assumed, by an observer acquainted only with civil air
transport in the US, that this advance in transportation is being de-
veloped primarily for the benefit and convenience of the private citi-
zen who wishes to travel fast. on errands of his own choosing. The fact
remains, however, that a. considerable part of the world's travelling
popul.a~:ion is unable to make use of existing air transport for a variety
of reasons. in the Soviet Union, for exastle, which operates, or at
least , s several thousand transport aircraft, few "average citizens"
travel by air, except on government businezs. Civil aviation is used as
an important instrument of the state to further its extensive develop-
ment plans. The USSR, .osrever, sometimes chooses to move groups of
workors ostentatiously by air to recreational centers, an d occasionally
transports a special mercy case on humanitarian grounds, with a7propri-
ate propaganda treatn:rt. Circumstances of a quite different nature
(small geographic area) prevent the general population in the UK from
benefiting by personal use of the airplane, and it does not occur to
the average Englishman that this facility will ever be, open to his.
Surprisingly little private flying is being done in any country,
and what little there is results primarily from government aid to :flying
clubs and training programs.
Civil aviation in most cases is not chat a country would like to
have, but that it can afford to support. The principal limitations are:
(a) inability to support unprofitable air transport operations, (b) :n-
adequate resources for civil air development, such as lack of tra;sition
in air transport operations, inability to develop a manufacturing indus-
try, and absence of Empire interests or pretige requirements, (e) limita-
tion7 created by the sovereign right of other countries to control their
own air space.
There are certain countries, Sweden, The Netherlands and Belgium,
Y.Mch have succeeded in maintaining substantial positions in the field
of international civil air transport, because their efficiency, coupled
with a tradition in this activity,, has enabled them to achieve profit-
able operations in spite of their obviously limited resources.
The USSR occupies a peculiar' position in civil aviation. While it
has vast and varied resources to support long-range international opera-
,tions and political objectives far beycnd its borders, it has seen fit
to adopt a policy which has resulted in the containment of its large
civil air establishment within the USSR. There may be military
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significance in the fact that the USSR has been unwilling to assign more
than a negligible number of its large fleet of air transports to. its
badly equipped satellite airlines. While the rapid expansion of civil
aviation within the USSR may be considered bertain, its anergnce into
the field of international air. transport frill, depend upon developme,its
in, the future which cannot no-vi be predicted.
The survey does not confirm ray, superiority for particulsr,methods
of establishing and implementing civil air policy. While there is a
wide range of efficiency-and a corresponding diversity in organizational
raatnods is disclosed., a comparison of methods as they affect,efficiencc
could be almost meaningless. It is evident, for example, that the most
ideal organizational charts could inc-'.- produce efficiency in a country
like China which has existed for years on the verge of cailapse; whereas,
the resources of the US might permit a preeminence. in civil aviation in
spite of a certain degree of i.nafficiency of governmental organization.
The survey discloses a wide difference in the degree of subsidiza-
tion by governments of their civil aviation programs. The general con-
clusion to be drawn is that most countries recognize that financial sup-
port of civil aviation is justified to the extent required by (a) the
.unwillingness of private capital to underwrite national-interest air
developments, or (b) the inability of the \,country' s airlines to pay
their oars :gay. Some countries are unable., however, to finance exten.-
,sive subsidization, and therefore the degree of support in a given, in-
stance may indicate no more than tbn liquidity of a countries treasury.
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A. CIVIT. AIR. POLICIES
1. Civil aviation is largely an instrument of national policy.
The state determines the policy directly for the companies,
although the carriers are allowed freedom of action in man-
agement and operational matters. Briefly, civil aviation
is looked upon by the British Government as (1) a means of
tying the Empire together; (2),a means of-showing the flag
and spreading British prestige around the world; (3) an
adjunct to the national defense in keeping communications
open and providing trained men and available aircraft for
transportation purposes in the event of war; (h) to a small
degree, as a means of obtaining intelligence, and finally,
(5) a means of carrying British mail and British business-
men to further_British trade. V.hile lip service is given.
to the use of the airplane as a means of enabling the com-
mon man to have a better life, this scarcely figures in
the basic policy. The present Government does not look
upon civil aviation as an indispensable, or even highly
desirable servant or convenience of the ordinary Englishman.
2.' (a) The Government promotes, or more accurately, supplies
air transport for the reasons mentioned under (1) above.
Since air transportation is nationalized, the Govern-
ment sup'-orts and directs the three Gpvernment=owned
carriers and prevents, restricts or discourages other
forms of commercial air transport. Except for the
charter companies which are discussed below, commercial
civil aviation is a part of the Government. At the
close of World ;:ar IT, British overseas air transport
commenced a period of rapid expansion, re-establishing
pre-war routes and.inaugura.ting.many new services.
The current economic crisis, however, has caused
drastic restrictions on foreign travel and it has
been necessary to curtail the services of British Euro-
pean Airways and to withdraw from other contemplated
overseas air operations.
(b) The basic law governing the operation of commercial
civil aviation provides that services hot assigned to
one-of the three corporations may be undertaken by pri-
vate enterprise, provided they are of a non-scheduled
character. These operators are numerous, but few are
prosperous. The attitude of the Government toward them
at first was somewhat hostile, but because the three
corporations were slow in getting started, it was forced
to let charter companies expand. The Government believed
that there would soon be little or no place for the char-
ter companies as soon as the scheduled operators were
able to take over. The charter companies are still oper-
sting, however, and even have an association, but cer-
tainly are not encouraged by the Government.
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(p)
Little encouragement is given to private flying, In
spite of numerous committees to promote private flying,
and in spite of the avowed sympathy of the Ministry of
Civil Aviation, what private flying there is in the
-United Kingdom today exists through the determination
and enthusiasm of a small group who look ppon it mainly
as a sport, rather than a means of-getting somewhere,
Most private flying is done through clubs, the members
chartering the aircraft and instruction by the hour.
These clubs are no longer subsidized, although they
are allowed reasonable amounts of gasoline for train-
ing flights. The ration for private flying for pure
pleasure, however, has just been abolished altogether,
in line with the stringent economies required by nation-
al policy. Reasons advanced for the limited encourage-
ment of private flying are,' nevertheless, that it helps
to make the country airminded, gives an outlet to the
manufacturers of small airplanes, and trains people
'in the rudiments of aviation for wartime purposes,
(d) It is the basic' policy of the British Government to aid
substantially the manufacturers of aircraft, On both
the military and civil side, the manufacturers are sup-
ported through direct orders from the Ministry of Supply,
which does all procurement for the RAF and the airlines,
and. contributes large sums to research, The most'importo
ant Government contribution to the aeronautical industry
.undoubtedly is the financing of new aircraft designs and
prototypes, and the aid given in the form- of expensive
experimental. equipment, It is difficult to determine,
however, whether Government support of the industry
through orders for operational aircraft to be used by its
airlines exceed those which might be expected if all com-
mercial air activities were in the hands of private opera-
tors. Nor can a comparison of unit costs easily be made,
Thus, the total amount of actual.Governmen'al subsidi-
zation remains obscure. The reasons for the heavy sup-
port given the aircraft manufacturing industry are: (1)
national defense; (2) prestige, and (3) encouragement
of the industry to design and develop new aircraft,
the expense of ihich would not be justified by the small
home. market, In a sense, the companies are nationalized
since, with a few exceptions, their sole customer is
the-Government, on which they also depend for priori-
ties, power, material and labor, They are therefore
to all intents and purposes a part of the Winistry of
Supply, and the question of subsidization is somewhat
academic,
(e) The Government directly supports aeronautical research,
both purely scientific and practical, for-reasons of nation-
al defense and prestige0 Although some manufacturers en-
gage in limited research on their own account, most of it
is done directly by'the Government at its establishments;,
such as Farnborougn and Boscombe Downs, '
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(f) There is no evidence of any direct Governmental aid in.
training eeronantical engineers, but opportunities for
enpioyment in research are provided at the Royal Aerorau-
ti.cul Institute at Farnborough; lndirn-ct oror-otion of
eeronsuticcl engineering education is provided to a limi-
ted extent through the government-aided aircraft
turersA and by the program explained in 8.
(g) The rAF trains its oren nilots and undertakes the training
of foreigners fr r rany countries in the operation and
care of British aircraft and equipment, The Air Forces
of many European, Near Eastern and Eastern countries and
the Dominions receive all or nart of their training in the
United Kingdom, and the close collaboration of the Air Forces
of these British allies in the last war continues. British-
trained foreign pilots and technicians are operating civil
aircraft throughout the world. This policy has promoted
the sale of British aircraft and air equipment. The adonc
tion of British equipment :rd training methods by many friend-
ly foreign countries will make possible t?e c''rdination of
aviation resources in time of war. The British Government,
through its nationalized airlines, occasionally undertakes
to give advanced training to foreign commercial pilots. Bri-
tish pilots in commercial aviation have usually had prior
training in the services, and receive advanced training
with the airline corporations.
(h) The policy of the Government is to encourage the export of
aeronautical equipment. This is accomplished by special in-
ducements tc further the sale of aircraft and engines, such
as training courses, competitive prices, terms of payment,
currency accepted, etc. The importation cif aeronautical equip-
ment is discouraged, and it is almost impossible to obtain an
import license for a foreign-b?rilt airplane or component. The
use of foreign-built airer,.ft, however, is currently the most
controversial issue between the aircraft industry and the
Government airlines. The airlines insist that nresent nri-
tish aircraft are inefficient and ups-iitable., and the industry
claims that its hands have been tied by unrealistic Government
specifications. (The British airlines, however, still use a
great number of C-47's !purchased at the time of the Lend-Lease
settlement. British Overseas Airways Corporatin? has six
Corstellations and has ordered six Stratocruisers.)
(i) The Government promotes the construction of airports for
defense purposes. A few, such as London Airport, have also
been constructed for civil purnoses, but the large number of
war-built airfields are sufficient for present civil needs,
and no new civil construction is being undertaken at this time.
The construction and operati"r of civil airports is natinnalized
under the control of the ?'iristry f Civil Aviation (the RAF
and the Royal Navy operate and control their own airfields).
There are very few private airports.
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(j) The Government, tid'o'l)jli the _ iri.stry of Civil :aviation
and the Air 1.inisti:', controls all air navigational
facilities. These are nnintain.ed and operated by the
:M and the ;.inistr?r of Civil. Aviation for British and
foreiCn civil users. Duo to air traffic congestion
over the UK, the Governnent has adopted a policy of
country vide air traffic control and has announced the
establishment of five Goographicai zones to be placed
in operation shortly. In addition, the Government will
operate special control zones over the major airports.
3. (a) The present British Government. elected on 'a platform
of socialise, has proceeded to nationalize various-in-
dustries, includinG civil aviation. Concccuently, all
scheduled air carriers are completely owned and-operated
by the Government. No privcte capital is, permitted to
invest in British scheduled coru-jercial aviation.
(b) With one exception, tht. ii.rcraft nnnufncturinG industry
is noninally in pr_?-r.La ?:cads. A11 factor iprbduction,
exclusive of export: of1~ is in effect controlled by
the :iinistrg of Supply through its beiw; the sole cu.a-
toner. In addition, the Government also controls the
example of the deg,rce to which manufactirinc is con-
trolled'by the Government, P. primate actiin; entire-
ly on its am initiative recently aucccedcd in buildirC
a small 100 hp. airplanc,. and in a booklet nnnouncins
this airplane bor?.sted of the fact that it tics able to
construct it without Government holm.
(c) The Government has rcpcatodly'announced that T,,ritish?
civil aviation could not survive the evils of nonopoly
and has emphasized the competitive features of -the three
airline corporations. Actually, hox:ever, there is no
real competition for traffic between the carriers since
they generally cover different air routep. There is,
`therefore, opportunity, only for competition in operatic ;
ef?ici.encyi such as in passenger comfort; reduced operat
inG costs, or in the choice of air transport types to bd
used. BSA;, has acclaimed the new Britisi} Tudor S7 which
has been rejected by BOAC (both would'use American air-
craft if permitted to do so), The Govor;uncnt'believes
that the principle of dividing civil aviation anonG three
corporations, rather than concentrating 'operations in onp,
has proved beneficial in practice. It is significant, that
all of the carriara are controlled by one :ai.niistiy of Civil
Aviation and :oust co:speto an.;onc themselves for the equip-
ment they receive from the Ministry of Supply. The Govern-
ment has been vory,careful to encourage, as far as possible,
the. rivalry between the three corporations. This has been
borne. out in the Tudor aircraft controversy.
(:1) Until the Ben:uda Civil Aviation Agreement, with the
United States, the firma policy of the British 3b-,rer.-ciont
was to protect i a roletive1j wok, carriers ncninst foreign
ca-ipetition. It clans a restrictive policy and recitlted in
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0
restrictive agreements with other countries of like
mind. British policy shifted at Bermuda and has :since
supported a degree of regulated international competition
about the samy as that su ported by The United 'States.
The relative power of the United Stateso and even of the
Dutch W Swedish airlines, is now so great, comnarod to
the.Rritish, that there are some misgivings as to whether
British aviation can survive under the governmental policy
now in force.
(e) Since the nationalized air carriers receive direct ad-
vnnces from the Treasury and return a.ll receipts to the
Treasux;, the size of the subsidy received cannot he
accurately computed, and the financial results of their
operations are obscured, British Overseas Airways Corpor-
ation, however, is, said to, be losing money at the rate of
some thirteen million oounds a year. British European
Airways Corporation is losing three or four million. To
date, the British Treasury has footed the bill for air
services which the Foreign Office, )iinistry of Civil ,
Aviation, Colonial Office and other agencies of the Govern-
ment have deemed to( be in the national into rest. It is now
likely that Parliament will, conclude that too great an ex-
pense is being'incur-ed for the dubious advantage of world-
wide air services. The recent curtailment of some of these
services may be followed by even sharper cuts in schedules.
As stated prpviousiy, subsidization of the aircraft manu-
facturing industry is car. _ed out mainly through the Govern-
menus being the sole customer (except for exoort orders).
The company directors are really managers of what might as
well,be Government-o:med plants. The airports are, with
very few exceptions, built, owned, operated and controlled
by the Linistry of Civil Aviation, the Navy and the RAF,
Therefore, there is no such thing as subsidization and aid
to private or municipal airfields. The Air Training Corps
of the RAF offers aviation educatidn and 'traj.ning to boys
of pre-draft age., i
(f) The policy of' the Government is to encouragd in every way
the development of transport aircraft. For example,
several million pounds hevy already been spent on the cont-
roversial Tudor transports. The Ministry of Supply is det-
ermined, however, regardless of past failures and the cost
involved, to continue to sponsor the develo'iment of success-
ful transport aircraft. The Government subsidizes the manu-
facture of all of the eight types ;:.nd sizes of transports
recommended by the Brabazon Committee. The Brabazon I.
which has yet to'f.ly, and the enormous hanger especially
constructed for it, will cost several mi'.lion pound.
(g) The stated policy of the Government is now firmly against
the purchase of foreign air transports, although the un-
availabili.ty of any adequate British types previously
caused the Government to permit the purchase of six Constell-
ations and six Stratocruisers, and large numbers of Douglas
C-4'77s are still in service.
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(h) With respect to the operation of foreign airlinos within
Great Britain, the British are fair and scrupulous in
according them the some treatment as their ovrn< :'mile
foreign operators frequently object to British rules
and regulations, they seldom complain of unfli.r disorini-
nation.
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At the close of World War II, the British did not favor
unrestricted expansion of international civil aviation.
The UK emerged from six years of war without single
large air transport type capable of competing With UP,
aircraft. (This' was partly due to a US- JK rrar??Mne r. ree-
nent that the British should continue to develop their
successful fij;hter aircraft while the US should produce
hear] bombers and transports.) The UY,; consequently,
promoted bilateral aGrcenents with -countries wflling; to
reduce competition through the introduction of limitations
on fli;;ht frequencies, rates and routes. In the UO". several
large and well-equipped airlines desired to institute trnn.s-
ocean, and even trans-world air routes at rates lorr enough
to ensure a large volume of traffic. The Netherlands,
France. Sweden, Canada and Australia also subscribed to
this view.
In February 1946,. the US and UK reconciled their differences
at the Bermuda Conference, where a formula urns devised
.which guaranteed to both parties fair and equal opportun-
ity in the development of international air services. and
formulated fair trade practices, including procedure for
the arbitration of disputes. Although British fundamental
air interests are still not identical with those of the US,
British policy in bilateral and multilateral civil air
agreements now agrees with that of the US. For the past
year or more, UK and US representatives have worked together
in international,nvihtion organizations without any impor-
tant or continuing disagreements. The British are staunch
advocates and supporters of all international organizations
having to do with civil aviation, and through the skilled
enterprise and knocrlodgc of their negotiators, play a '\
leading and influential role (second only to the'Unitod
States) in those organizations.
4. Civil air policy is to some extent influenced by mil5.tarj air
requirements, althou;,h the armed forces do not directly c::crcise
any control over civil aviation. In the event of an emergency
or war, however, the armed forces would immediately assume its
controls The !Zinistry of Civil Aviation is staffed largely
with active and former :.AF officers; the three corporations are
staffed almost dntirely with former service crews, p5.lotc, and
technicians. Cornunication services are partly o erated by the
Air L.inistry (military). Locations of and change: in airports
and navigational,sida? an well, as :Ioticos to Airmen
etc. are approved or -disapproved by the A?r Ministry. The
direction which research tni-cc --a largely, but not excl;.sively,
'influenced by military consic:orations.
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(a) Civil air transport is not regarded primarily as a re-
i:Soreenent of the nilitary air potential. It is
primarily regarded as a necessary activity which Britain
needs to ;:cop its prestige and influence throughout the
world. Military considerations, of course, form a part
of the foregoing.
(b) 17hile the British appreciate the importance of civil air
transport in creating a basis for the British air-
craft manufacturing industry, this is not considered
to be its primary significance.
(c) The commercial advantages of sn active air transport
establishment are only a contributing factor in deter-
mining British. civil air policy. As stated, the British
I look upon their civil,avirtion, not necessarily as assist-
ing any one element, such as the MW, Navy*, manufacturers,.
Board of Trade, or Foreign Office, but as one of many de--
vices on whic:: their ability to maintain a strong position
throughout the world depends. All of the reasons mentioned
under 4. existe and all of then add up to supporting the
rvrorld position of the British. Their civil aviation will
stand or fall with the strength of their general world
position. It till not be, like XLII, a business which helps
support the Netherlands, but will involve an expenditure
like that of maintaining the Arm;/ or the iiavy.
5. The British restrictive civil aviation policy has, during the
last three years, been changed and dominated by the more liberal
United States policy. Some concessions, however, have also been
made by the US to British policy. Thus, the two policies, once
poles apart, are now p racticall;; parallel. 'iThile the Untted
States, _'or domestic reasons, moved away from marked liberalise,
the British became less restrictive because their extreme re-
strietionism visa unacceptable to many other countries with
which they wished to do business.
6. It is not possible to answer this question satisfactorily, com-
pletely, or accurately. lben if detailed figures could be ob-
'tained,. they would probably be misleading.
7. Since the nationalization of British air transport, no private
ovmership'in this industry can exercise the influence of a vest-
ed interest on civil air policy. Furthernore, the I.:inistry
of Civil Aviation is certainly not donineted by the managers
it installs in the airlines. It is so sure of its ultimate
power that it can and does allow the airline corporations a
great deal of-managerial freedom. On the other hand, the ::inistry
of. Supply its, to some extent, dominated or intimidated by the
Society of Britis'. Aircraft Constructors, and particularly by
some of the leading figured nmong the aircraft manufacturers.
This is partly because these individuals constantly threaten to
make a scandal over the very large amounts of money which have
been spent for airplanes rhic'c hate never flown. Thus, in the
manufacturer, the Ministry of Suppl 11nc a bcrr by the tail The
forthcoming inquiry into the suitability of the Tudor aircraft
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may force a change of policy in the ministry of Supply,
and establish a new balance. of liovier between the airlines, the
manufacturers and the :.:inistry of Supply.
6. The Government subsidizes aeronautical engineering educa-
tion through many leading schools and emphasizes design
and production of aircraft and engines, including propul-
sion systems. The Government also directly sponsors the
College of Aeronautics at Cran?iold, Bucks. This is a
post-graduate college having at present 100 students pur-
suine; a two-year course. The Governing Body of the College
is appointed by the Minister of Education, and the College
is fine ced by a "grant in aid" fron this Department.. The
foes charged produce an income rhic:_ is a very small frac-
tion of the total cost of the College.' The following Uni-
vorsities also-provide aeronautical courses:
Imperial-Co.ie?e and Queen i:azj College
of the University of London
Cambridge University
Bristol University
Glasgow University
Southampton University College
In common with all universities in the United Kingdom, the
above institutions are financially supported by the Univer-
sity Grants Cocenittee; the money coming directly from the
Treasuiy. The Treasury itself, however, has no direct re-
sponsibility in this field. the following technical col-
leges have full-timo or' part-tins aeronautical courses
(principally the latter):
Ilortha-;pton Polytccuric, London
fl nchester College of Technolop -
Lcu,,;;aoroug'h College
:.:erchant Venturers College, Bristol
Kingston Technical College
hull Technical College
F'arnborouj;h I'oyal Aeronautical Establishment
Cheltcnhrn Technical College
Coves Technical College
Guildford Technical College
Portsmouth Technical College
Coventry Technical College
Gillingham Technical College
Derby Technical College
Southall Technical College
Bradford Technical College
Birmingham Central Technical College
l'iolverhampton Technical College
Glasgow Royal Technical College
Belfast College of Technology
These courses are of Higher National Certificate standard
or beyond: The Higher National Certificate approximates
university standards, but is narrower in scope. -The fees
charged in Technical Colleges arc more or less nominal,
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O
the remaining costs being met by the Local Education Au-
thority whic'i recovers en nvera:,;c of 55,10 of its expendi-
ture by means of a grant from the finistry of Education.
A very large proportion of students, both in universities
and in full-time courses at technical colleges, are aided
either by Local Education Authorities through their system
of Major Awards", or.by the utate under the state scholar-
ship scheme. Un`i ersities, of.course, also have their own
scholarships, but these are much fewer in number than the
Local Ed:acation Authorities or State Scholarships. Genera
ally speaking, it can be assumed that no i cividuals who
are deemed capable of taking such advanced courses will be
prevented from so doing by lack of means. The number of
students is not determined by the Government except in the
case of the College: of Aeronautics. This is really a post-
Graduate school. It will have a student body of two hundred
when it is organized and in full operation. The British
Government has found by experience that the educational in-
stitutiuns satisfactorily gouge their instruction to meet
the rog,.irements of the aviation industry. It is accofd-
inGly-unnecessary for the Government to interfere with the
organization of this work, or to specify the amount of in.-
struction to be Given in the various specialized, fields.
In addition to this scholastic instruction, certain aircraft
firms have apprentice systems and factory schools of 'their
arm in which olenentar' courses are given in aircraft do-
si n and )roduction.
9. The Government subsidizes r:lmost all aeronautical research
in Great Britain - either throu;-h its own establishments,
such as the National Gas Turbine Establishment, Aeronautical
Research Establishment, etc., or through contracts with the
various aircraft companies. Is certain phases of aeronauti-
cal research demand specialized and expensive equipment, this is
generally allocated by the Government to its own establish-
ments. Airframe development and general tests, on the other
hand, are carried out by the industry under Government con-
tract. The UK has, and continues to carry out, extensive
research in respect to Gas turbine and propellor turbine pro-
pulsion for use in commcrci^.l aircraft. There is also a
fairly extensive research progr:c; in the fields of nuclear
fission and eontrollca nisciles. "wale priority is given to
nuclear physics, the research on airframes probably had a
larger budget. The budgetary grants Tor research contained
in the Civil Estimates for 1947?=4945 are as follows;
1946-1947 1947-1068
s, 15,0S6o010 g. 9 0004000+
,
This figure does not 1.'hcLud: h'e?;;,~t".'e:. Lein carried out
by t;hb ._ristr/ of Sup].y for aircraft that Q-11 not be
delivered in 1947-?1949.
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0
I-inistr Of Supply
1946-1947 1047-1048
b 35,040,000 b 48,780,000
These figures include buildings, equipment, salaries, mate-
rial and other capital expenditures by the. Government, as
well as Governmental support of research by industry and
colleges.
b 290,000 b 370,000
Very little research is carried on by private enterprise,
except by Vickers, which is the largest concern in the UK.
10. The Government subsidizes the development of most, though
not all, new types of aircraft and equipment. The eight
types of aircraft rocommnnded by the Brabazon Committee,
for example, have been ordered by the Government and funds
have been advanced to the manufacturers concerned. The
method used by'the Government in developing new typos of
,aircraft is to produce the specifications and to collabornto
with the manufacturer during the stages of design and con-
struction, sucgesting and insisting on changes or modifica-
tions as they become necessary. A company, however, VA-Lich
is unable to Get advance orders and support from the Govern-
ment, is free to develop its own aircraft if it haste
necessary money and can got the materials. An example of a
privately-produced aircraft is the Cunliffe Owen "Concordia",
a ten-place, twin engine airplane. 17hile most of the cost
of development is in one way or another borne by the Govern-
ment, the manufacturers undertake on their own initiative a
certain amount of development and experimentation. The cost
of such activity is not necessarily a drain on a company's,
finances to the full extent of the costs involved, because
the greater part of the expenditures would otherwise be paid
to the Government in the form of taxes on profits. Under
the prevailing system the manufacturers are able to show a'
great deal of individuality in design,despite virtual
Government control. They have been hcmpered, on the other
hand, by the more or less rigid and sometimes ill-considered,
specifications and requirements laid down by the Government's
airlines and the 11inistry of Supply.'
1. The.follovring agencies of the Government are concerned with
civil aviation:
L:inistrj of Civil Aviation - formed in 1945 and raised to full
10
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 SECk-. i
Cabi;iet r :atua in P_pri.i 1946. Under the Civil Aviation Act,
1946, the Ministry became responsible not only for British
aviation Policy, but also for the operation of the three cor-
porations, the airports in the United Kingdom and communica-
tion systensd It will eventually be responsible ;for all
meteorological in orm?i~1 on;
Ministry of Sup? - took over the duties of the Ministry of
Aircraft Production in 1946 and became responsible for the pur-
chase of aircraft for the inistry of Civil Aviation and for
aeronautical research;
Air 1.inistry - controls the RAF and is responsible for all re-
searc zt on' military type aircraft;
Ilinis & of Education - has charge of the Government-sponsored
College of Aeronautics and supervises courses in technical
colleges; '
Board of Trade - in conjunction with the Ministry of Supply
handles imports of aviation equipment and trade patters per-
taining to aviation;
Air Transport Advisory Council - established under the Civil
Aviation Act of 1946, studies the problems of air transporta-
tion and mares recommendations to the Minister of Civil Aviation;,
Air Rej tration Board - formed in 1937, is an autonomous body
which recommends the issuance of certificates of airworthiness
for aircraft, and
Air Safety Board - appointed by the ;.anistor of Civil Aviation
-= 46 t3 o recommend safety regulations for commercial services
and to investigate and report on accidents involving aircraft
in the United Kingdom.
2. (a) and (b) are covered in 1. above..
(c) Civil aviation'is nov controlled by the I.tinistry of Civil
Aviation and to some extent, in the matter of aircraft pro-
curemont, by the Ministry of Supply. The Ministry of Civil
Aviation cane into being as the result of vigorous and con-
tInued criticism in,Parliament, particularly the House of
Lords, of the manner in which civil aviation. was handled
during the latter part of the ware Prior to the establish-
ment of the Ministry of Civil Aviation, civil aviation had
been handled as a section or department of the Air Min-
i.stry, although in 1943 Lord Boaverbrook, who held the.
Cabinet position of Lord of the Privy Seal, was charged
with formulating British civil aviation policy and rep-
resented the Government on this subject in the House of
Lords.
The proponents of a separate Iinistry of Civil Aviation
argued that by the very action of-creating a separate
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Ministry away from the numbing and unsympathetic in-
fluence of the Air i.tarshals, progress would somehow
follow. ?7hen established, the Ministry of Civil r:via-
tion found itself not only in control of civil aviation
policy, but also charged Aith,operating all scheduled
British air services. It was further obligated to take
over, maintain and operate all civil airports, and to
organize and maintain necessary communications and navi-
gational facilities. Procurement of personnel for all
of these functions likewise became the t:inistryos re-
sponsibility. Thus, the Ministry of Civil Aviation
assumed complete control and responsibility for all
aspects of civil aviation, except for (a) the finistry
of Supply's functions in procuring aircraft for the i'CA's
airlines, and (b) joint responsibility shared with the
Air Ministry for some of the -communications and traffic
control facilities.
During the war, BOAC was taken over by the Government and
operated by the Air Ministry, so that there was a long
period of virtual nationalization before the subsequent
bill nationalizing civil aviation came into effect. Under
the Coalition Government, a compromise plan was worked out
with the air transport industry which established partly
private and partly governmental ownership and control of
the airlines. When the Labor Government came into power,
this plan was modified to effect 100% Government ownership.
No change was made in the division of air transport opera-
tions among three corporations.
The present organization of British civil aviation re-
fleets the ideology of the Labor Government. Civil avia-
tion was not nationalized in the UK through any conviction
that it was peculiarly or inherently suitable for nation-
alization or government o.aeration. It was nationalized
for the same reason that coal mining, banks, etc., are
nationalized, because the Government believes that nation-
alization is a prerequisite to maximum efficiency in the
operation of important utilities serving the public
interest. The Government had been elected on this platform.
3. The opinion of even informed and normally unbiased people is
colored so greatly by politics that it is difficult to obtain
in the UK objective opinions on the efficiency of civil avia-
tion as presently organized. Certainly, British civil aviation
is in a very precarious state, but whether it would have'been
equally so without direct Government control, under private
enterprise, or under a single company rather than several, is
debatable. The operating losses of BOAC and BEAC are alarm-
ingly high. The principal causes of this are (a) the employ-
ment of'unsuitable aircraft, (b) overstaffing of the operating
companies, and (c) confusion created by frequent interference
on the part of the Ministry of Supply, the Ministry of Civil
Aviation and even of the Foreign Office in operational matters.
These agencies appear to expect the transport corporations to
make profits, or at least to keep their losses within reason-
able limits, while performing uneconomic services with uneco-
nomic equipment,
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(a) There are few private aviation interests in the UK, but
they criticize bitterly the :inistry of Supply, the Min-
istry of Civil Aviation, and the Government corporations
for rank inefficiency. While their criticism is largoly
justified, it undoubtedly reflects somewhat the natural
resentment of private industry against Government controls.
(b) The other forms of transportation pay little attention to
aviation. as they do not consider it seriously competitive.
Members of the shipping companies engaged in the South
American trade are on the Board of. Directors of BSA:., but
the forth Atlantic shippers remain aloof from aviation.
The railroads are nationalized and reflect Government views.
(c) Since civil aviation is a function of the Labor Government,
the Labor Party does not criticize the management of civil
aviation. ;:hen debates on the subject occur in the House
of Lords or the House cf Commons, the Conservative Party,
on the other hand, usually attacks the Government. The
attacks are directed-primarily against Socialist economic
theory and do not present any careful analysis of the Gov-
ernment's civil aviation administration.
(d) The armed forces, including the RAF, seem to give relative-
ly slight consideration to civil aviation.
(o) The General public in the UK is relatively disinterested
in civil aviation and appears to have formed no firm opin-
ions on the efficiency of Government control. The number
of people who use airlines in the UK is very shall, and it
probably never occurs to most Englishmen that they night
some day use this form of transport. The usually fair at-
tendance at air shows merely reflects the morbid appeal
of dangerous exhibitions of acrobatics and low level flying.
4. Normally, conflicts between 'iinistrieo are decided by the Cabinet.
In all matters of important international civil aviation policy,
the Forhign Office always has the last word, and the Ministry of
Civil Aviation accedes without argument if the Foreign Office
objects seriously to arrjthing being done in the foreign avia-
tion field. Friction sometimes develops between the Ministry
of Supply and the Ministry of Civil Aviation over aircraft spec-
ifications and procurement for the airline corporations operated
by 14CA. The outcome of these conflicts depends mainly on two
factors; (?a) the strength and personality of the Ministers and
other top officials of the two Ministries, and (b) the politi-
cal aspects of the controversies, which are decided at the level
of the Party Council. In a recent controversy, when the airline
corporations were opposing both the Ministry of Civil Aviation
and the Ministry of Supply, the Ministries won round one by ob-
taining a Cabinet decision against further purchases of American
aircraft, thus necessitating the use of obsolete British types;
round two, however, was won by BOAC in refusing (so far success-
fully) to fly the aircraft assigned to them by the Ministry of
Supply. This controversy has now been referred to a Special
Board of Inquiry. There is a moderate amount of duplication in
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0
the functions of the various agencies handling civil aviation.
Coordination between the Air Ministry and the Ministry of Civil
Aviation with respect to airports, communications and traffic
control is now adequate. On airporta whore both RAF and civil-
ian aircraft are permitted, confusion due to dual responsibili-
ties is usually avoided. As a rule, the RAF.operates such airy
fields with the exception of services to civil aircraft and
civilian passengers.
6. No plans for major reallocation of responsibilities in civil
aviation appear likely of adoption, There is, nevertheless,
constant agitation to remove aircraft procurement from the Min-
istry of Supply and put it in the hands of the corporations.
that is, the Ministry of Civil Aviation. There is also, from
time to time, agitation to abolish the Iinistry of Civil Avia-
tion and put it back as a bureau of the Air Ministry or make it
part of the Ministry of Transport. Since the Ministry of Civil
Aviation is still Lro;ring rapidly and has acquired considerable
prestige, it now seems unlikely that it will be reincorporated
in the Air Ministry. Within the framework of the Ministry of
Civil Aviation constant regroupin;.takes place in an effort to
streamline the functions of the various departments. Largo
numbers of eommitteoc are appointed in an effort to innrovo
intra-mi.nistorinl efficiency, but many of those merely draft
reports and recommendations which appear to be given little or
no consideration.
C. PRDCIDUm ; AND :'tLouLATIOIJS
1. (a) As provided in the Civil Aviation Act of 1946, the Govern-
ment assigns to the statutory carriers, through the minis-
try of Civil Aviation, the exclusive responsibility for
large areas of the world. The carriers, as a managerial
responsibility, are free to determine stops and routes
within the broad geographic framework assigned to them.
They are required in axe case to operate routes considered
by the Government to be in the national interest.
(b) Geography is the main consideration controlling the grant-
ing of a route to a particular carrier. Thus, IISAA, as its
nano implies, is operating routes to South and Central Amer-
ica and the West Indies; BOAC the North Atlantic routes and
the long routes to the Doninionsj and BLAC.the routes to
Europe, North Africa and within the UI:. MICA is extremely
anxious to avoid the position of having only ono string to
its bow: the Government has, therefore, retained the right
to grant to ow oi' the other companies routes to "out of area"
points if 'it believes that the designated carrier for that
area is not operating effectively. It could also bstablish
an additional company.
(c) When a carrier is assigned an area, it may operate the nun-
& ber of scheduled services it thinks economical with the air-
(d) craft and equipment at its disposal. If the Govorrm'ont wants
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more schedules to be operated for reasons of national interest,
it merely asks the carrier to add schedules. If the carrier
deems the routes unsafe, or the equipment unsafe for the
routes, the management has the right to suspend. operations
without prejudice. While the policy of the '.:inistrj of Civil
Aviation is to allow the corporations the maxiriun amount of
managerial freedom in conducting their business, the officers
of the corporations are in a sense servants of the I:.inistry
and are thus essentially subservient to the rrishes of the
Government_
hew routes are established on the initiative of both the
Government and the carriers. Generally speaking, the Ministry
of Civil Aviation encourages the carriers to expand to the
maximum practical extent in their respective areas.
Carriers are entitled to institute new routes only within
their respective areas.
(g) Competition is not permitted over identical routes. There
are a very few cases in which the nearby stops of BOAC on
routes to Africa or Australia compete to some extent with
the European routes of BEAC.
.'(h) The carriers do not have certificates: the question of re-
voking or revision of certificates is therefore not applicable.
2. Rates
(a) Rates are fixed in the first instance by the three corpora-
tions but are subject to the approval of the I.Ministry of
Civil Aviation. International rates are usually arrived at
through the International Air Transport Association machinery,
while internal rates are submitted to the t_CA by L'BAC.
(b) The Ministry of Civil Aviation has laid down the policy
that minimum rates arrived at through the I.A.T.A. machinery
should be based upon economic factors of the type detailed
in the rates section of the Bermuda Agreement between the
United Kingdom and the United States. On international ser-
vices actual rates charged are in most instances higher than
the I.A.T.A. minimum fares. These higher rates are based
partly upon cost considerations but also reflect a tendency to
charge what the traffic will bear. Internal rates are based
primarily upon economic considerations and are geared to costs
of surface transportation. On certain routes it may be sus-
pected that political considerations enter into the rate
structure.
New rates filed by the corporations are processed in the
Traffic and Tariffs Branch of the Directorate of Finance
and Accounts in the L3nistry of Civil Aviation. The filing
is accomplished by a letter from the. corporation to the
Directorate and, after analysis, is either approved or
disapproved by letter from the Ministry of Civil Aviation to
the Corporation.
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(d) The three British corporations do not compete directly over
the same routes. Differences of rates between the three
corporations, for comparable services, reflect differences
in I.A.T.A. rates established for various areas. Rates are
identical for different Classes of travellers or freight
except to the extent that I.A.T.A. regulations permit
special fares for children, etc.., and special discounts
for special classes of freight.
(a) Safety rules and regulations are issued by the IBnistry
of Civil Aviation. They are published in Notices to
Airmen,
(b) With the exception of air traffic control around major
airports, the rules are adequate and competently enforced,
if judged by any reasonable standards. In matters involv-
ing traffic control under instrument flight conditions, the
British have neither the system nor the enforcement to insure
safety fully up to the United States' standards. (The
opinion has been expressed that "they still Co 3cmerrhat on
the principle that there is a lot of air compared to airplanes
and that collisions are acts of God.")
(c) Safety regulations are undoubtedly enforced with impartiality.
There is no substantiated record of any safety regulation
being enforced to favor an individual carrier. It is generally
recognized that at the international meetings at which safety.
regulations are established under ICAO or otherwise, British
delegates are skillful, persistent and flexible in trying to
have the rules conform to British conditionse Once the rules
are set, however, they are enforced equitably.
4. Inspection
(a) The L.'inistry of Civil Aviation is charged with the investi-
gation of equipment, personnel and accidents. The Air Regis-
tration Board, composed of representatives of manufacturers,
insurance companies, and the public, as well as the ministry
of Civil Aviation, establishes the rules (except hero inter-
national standards apply) for ailrorthiness. The actual work
is done by a dopartuont in the i:inistry of. Civil Aviation.
There are sub-sections for the examination of ground and flight
personnel, for the annual and other inspection of aircraft
and for accident investigation. Accident investigations are
now held in public hearings unless the aircraft is carrying
secret equipment.
(b) These regulations are considered to'be adequate. They are
competently and efficiently enforced.
(c) Penalties apparently are not often necessary. Warnings are
given and frequent violators lose their licenses.
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5. Airports and Communications
(a) Regulations Governing the use of Civil Airports are covered
in Notices to Airmen. Some civil airports are open only to
charter flights; others are open for daylight operations;
others are restricted to scheduled airlines; a few are res-
tricto4 to exclude aircraft over a certain weight. Any
civil aircraft can use at any time those that are unrestricted,
and special permission can usually'be secured to use any
civil field.
(b) The Linistry of Civil Aviation is taking over the operation
of all civil airports. There are a fear which are still in
private hands. The P.AF operates and maintains its orm
fields as does the Fleet Air Ara.
(c) The flinistry of Civil Aviation, in collaboration with the
G Air Ministry and the General Post Office, operates ground-air
(d) communications, navigational facilities, and point-to-point
communications. The civil airports are being linked together
with the control center in London and with each other on
,telotype circuits.'
D. GEMRAL EVALUATION
1. There are sharp differences of opinion as to whether the
British Government's policy for aviation and its control of
civil air operations have achieved the best civil air es-
tablishment of which the straitened British eoonony is now
capable. The most controversial question is whether outright
government operation of the air transport industry can
possibly (a) satisfy the requirements of an aggressive British
world trade policy and (b) adequately sustain Thpire.prestige.
It is actually difficult to say whether British civil aviation
would be any stronger under entirely private or mixed private
and governmental control. Certainly British airlines would be
in a much stronger position now if they had been permitted to
purchase modern aircraft from the LB, but it is debatable
whether the advantaces of this course would have outriciChed
the consequent drain on the British dollar position and the
blow to British pride which the inereasod use of foreign air-
craft would have caused.
In any case,'largely because of the requirement that British
airlines shall use inferior British aircraft, the British civil
air establishment has lost ground heavily in comparison with its
stronger international competitors. Conceivably the use of
inefficient and unsuitable British aircraft during the present
period may later prove to have been warranted, provided this
action keeps the aircraft industry alive and the industry
rapidly perfects a satisfactory jet-propelled transport air-
craft. It appears, however, that the latter possibility is
too remote to justify the severs continuing difficulties which
British policy has imposed on its air transport carriers. As
a result of its deterioration, the British air transport es-
tablishment reveals itself to the world as inferior to those
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of other far smaller countries, such as the Netherlands
and Sweden, which operate better equipped and more econom-
ically operated lines than do the British.
2, British aviation suffers from the same problems which beset
the entire economy of the country. If the British economy
were sound, the industry would undoubtedly produce suitable
aircraft sooner or later, and the interim purchase of US
types would be no problem. In the specialized field of trans-
port design the British aircraft industry is still suffering
from a traditional weakness: the pre-war British aircraft
industry was never able to develop a successful large conventio-
nal transport. This may have been possibly due to the lack of
a broad domestic market for such equipment.
The output of labor in tho British aviation industry is far
lower per race hour than in the case in the US, No solution of
Britian's pree.ent civil air difriculties is to be expected
until the current shortage.of man power is overcome and the
produetiv't-y of available labor is increased.
Several factors tend to mitigate the weakness of British Civil
aviation. The excellence of British military aircraft has
deservedly gained wide recognition throughout the world. The
names iar.oaater, Meteor, Vampire, Spitfire, Hurricane, Tempest
and Mosquito are universally known. Outside of informed
circles, the world-as well as the British public, have accepted
it as a matter of course that builders of these military air-
craft can likewise produce a jet transport in short order, and
that the nation which manned the RAF will be able to master the
operation of tomorrow's aircraft, As a result, the British
have had some success in persuading other countries not to buy
American reciprocating engine civil aircraft with the argument
that British jet types, which would make all others obsolete,
were just around the corner.
An additional advantage to British civil aviation lies in the
network of colonial possessions throughout the world with which
-no bilateral agreements are necessary. This was of some import-
ance before the United States obtained a series of bilateral
agreements, and would again be important if the current multi-
lateral air transport negotiations fail and the United States
has difficulty in perpetuating its bilaterals on a favorable
basis. Another element of British strength is found in the
small group of skilled British negotiators who can effectively
pursue the precisely organized British objectives at bilateral
or international air conferences. They are trained to not
solely in the national interest rather than as exponents of
special interests or pressure groups.
Finally, BOAC has demonstrated in the only British operation
using modern American aircraft (the North Atlantic route),
that the British are able to orovide a service which appeals
to the travelling public, and which compares favorably with
other outstanding air services,
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 Purchaoos Aircraft
Super:iso;. Rc-20arGS
CIVIL' AIR POLICY'
UNITED KINGDOM
I4INIS'EBY OF CIVIL AVIATION
- -~ ~r k A,tian Polit
Appiovoa Ratoo
Tsaues Pilots( Licenses
y
Operates Hstionaliaed
Operates
MRITISH OVERSEAS AlWAYS
CORPORATION
(Nationali)
BRITISH EUROPEAN AIR1 AYS
(Aationaliaed)
IBRITISH SOUTH AMRICA14 AIM-myS
(Nationalized)
COUNCIL
Adviaaa A1CA on Air Transport
I?St~ttore
;U,?: REGIsTIUsTIO27 BOARD
Recommends Airworthiness
Cortifieates for Aircraft
AIR SAFETY BOARD
Reocmends Safety Rules
Investigates Accidents
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CIVIL AVIATION - FRAA'CE
NOTE: The following information was not available, during
the preparation or this study.
1. The most important development in French transportation since
the war is the establishment by the National Assembly in August 1947 of
`" a 'Supreme Transportation Advisory Board. The Board will advise the
Minister of Public "orka and Transport on all transportation matters
submitted to it, but may also formulate recommendations on its ovn
.initiative. The Advisory Board's' immediate mission is to present,
within one year, plans for the coordination of rail, highway, inland
waterway, air and ocean transportation. It will include in its plans
coordination of domestic transport with colonial and international
transportation. The Board will study all social, technical, financial
and economic matters relative to the organization and functioning of
the various modes of transportation; it will also study matters concern-
ing stock and equipment, technical and commercial development and the
social, economic and administrative problems arising therefrom.'
2. The Supreme Transportation advisory Board is established under
the Minister of Public corks and Transport and consists of 69 members,
including representatives from various government agencies,. members of
Farliament$ specialists from the large-transport organizations, employee
representatives from the operating companies and public organizations
such as tourist travel agonies. Seven permanent commissions are estab-
lished under the Board, charged with examining questions of transport
coordination. These are as follows:
Rail - highway
Rail - inland waterway
Rail - air
Rail - sea
Highway a air
Highway - Inland waterway
Sea air
s0
3. The Supreme Transportation Advisory Board is financed through
a special fund provided by the Minister of Public Forks and Transport.
The sum expended shall be reimbursed to the state by the various trans-
portation operators under conditions to be set forth by decree of the
fsinitater of Public "?orke and Transport and the 11inister of Finance.
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CIVIL AVIATION - FRANCE
A. CIVIL AIR POLICIES
1. The 'asic French policy.tor:ard civil aviation is reflected in
nationalization of the :rincipal French air carrier and the
major manufacturers of aeronautical equipment. French external
air -olicy ha:: been coriparubl.e to that of the OF in that
bilateral air agreements have been patterned on the principles
esta lished betreen the U` and the UK at 1ermuda in February
1946.? Civil aviation is regarded as an instrument of national
!?olicy. :since the ^iajor French airline is nationalized, as
well as the principal aeronautical equipment manufacturers,
the Government nay be said to ezercine complete control in the
shaping of aviation policies.
2. (a) :?cheduled air transport except for secondary lines is
performed by the gov rnment-o?ned corporation, Air France.
Development of this company's cx=rvice is promoted to the
extent required by Empire considerations, rational prestige,
and on self-sustaining; routes to the extent indicated by
tra?fic dem:.nds. In thin connection, it should be pointed
out,, however, that the "inister of Transport has on
occasion restrained expansionist tendencies on the mart
of Air France until convinced that the organization has
gained su.ficient rxperience to assume the increased
service in a safe and sutisfactory.ranner. The Government
promotes the development of Air France's services through
the ;ranting of subsidies when necesoary to meet deficits.
(b) Non=scheduled air transport services are not financially
supported in any way by ,he Government. These private
operators must secure permits rrom the ;secretary General
for Civil Aviation and are permitted to operate as long as
their services are not in conflict with the best interests
of Air France. In neat cases the permits are subject to
cancellation on short notice.
C
(c) Private flying is virtually non-existent. Private owner
type aircraft produced in limited quantity, are very expen-
sive and do not compare favorably with American typos.
The Aero Club de France, active before the war in promoting
Amateur flying, has had difficulty in reviving its activities,
This has been due largely to lack of dollars to purchase
light tmerican Aircraft such as the Piper Cub.
(d) Virtually the entire French aircraft industry has been
nationalized' since the ^ar (except for a few privately
owned concerns). The extent of government promotion of
aircraft manufacture depends on existing budgetary limita-
tions. Under the Communist Air :sinister, formerly in
control of the industry, the impression r:as created that
the industry was more an instrument of ;arty politics than
a producer of aircraft. Since the elimination of Communist
control of the Air Ltinistry early in 1.947, an attempt has
been made to stimulate production and remove the political
influences that have dogged the industry in the past. These
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 plans for increased production;, however, probably will be
seriously handicapped by the current campaign to reduce
expenditures throughout the government in the face of the
existing financial crisis.
(e) It is the policy of the French Government to promote
aeronautical research through government controlled and
financed institutions. The Service Technique de l'Aero-
nautique of the Air, Ministry and the recently created
Office National d'Etudos et de Rechcrches Aeronautiques
(which enjoy a certain restricted autonomy) are the
principal organizations engaged in aeronautical research.
The extent of their activities depends on Government
appropriations. i.'uch importance is attached to the
development of aircraft prototypes, propulsion units,
guided missiles and helicopters.
(f) The government promotes aeronautical education to the
extent possible under budgetary limitations. The Eeole
Polytechnique, the Ecole Nationale Superieure d'Acronaut,4c
que and the Ecole Cehtrale are state-supported and are
the principal institutions giving instruction in aeronauti-
cal engineering.
(g) The government undertakes the training of civilian pilots,
navigators and other technical personnel at flight and
ground schools, but only in sufficient numbers to satisfy
the needs of the chosen instrument (Air France). The
French Air Force hat a large training establishment which
provides a reservoir of personnel available for civilian
employment upon conclusion of the period of military con-
scription. The tovernment in the past has furthered
advanced training through the employment of American and
Canadian flight crews who have indoctrinated Frc:nch crews
in operating methods as well as-in the use and maintenance
of modern equipment. The government also recently authorized
the training of French personnel by US technicians in
airport management and traffic control techniques in order
to provide qualified operators to take over airports and
installations built by UZ military forces during the war
and acquired under a US-French :.ir Service agreement.
(h) The government, through its representatives abroad,
actively promotes the export of French aeronautical
eouiorent produced by its nationalized factories. In awns
cases it is believed that provisions for export salon of
aviation-equipment are included in trade treaties, The
recent rule of tour Languedoc French commercial transports
to the Polish Lot :.irline may be an example of this policy,
In addition, the Government maintains and finances the
Office Francais d'Exportation de L'ateriaux Acronautiques
(OFF.Ma). The import of aeronautical equipment is at a
standstill except for spares for equipment already purchas-
ed.. This is due to a lack of foreign exchange.
(i) Civil airport development is the joint responsibility of
the Direction des'Bases of the Secretariat General for
2
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Civil Aviation and the Bureau des Ponta et Chaussees of the
1tinistry of Public 7orks and Transport. The extent of
Airport development is limited to such provisions as are
made in the Government budget for this purposs,
(~) Navigation facilities are installed and operated by the
Direction de is Navigation Aerionno of the Secretariat
General for Civil Aviation, These activities depend on
budgetary considerations and the availability of foreign
exchange. (Most navigational aids and radio communication
equipment 'mast be purchased abroad).
3. (a) French air transportation was nationalized as of September
1944 by an ordinance rhich legalized the transfer of Air
France stock ownership to the.tate. Approximately 4% of
the stock is still hold by foreign interests and approxi-
mately 36% by French private interests; Thusn Air France
is in effect a government-controlled enterprise. Private-
ly owned air carriers arc permitted as long as their service
offers no competition to Air France; but no government
subsidy is available. Foreigners tray oval a minor interost
in such concerns. Although no notable additions have been
made to the list of the nationalized companies under the
'Socialist Governments there has been no indication of a
reversal in the nationalization policy,
(b) The government nationalized the greater part of the air-
craft manufacturing industry after the liberation of Paris
.in World War II. There remain but two outstanding excep-
tions: the previously owned Ilispano-Suiza ahd Broguet
Corporations.
(e) There is only one national carrier.
(d) Air transport agreements have been concluded with several
countries. These have followed the general pattern estab-
lished in the US-UK agreement at Bermuda which provides
a code of trade practices to allow a fair and equal
opportunity for both parties to develop their services, but
also provides certain conditions to safeguard their res-
spective interests. The French, hor:ever, are fearful of
competition from the Dutch and Swedes whom they regard as
"the world's principal transporters of other people's
traffic". 'In consequence, the French have not yet con-
cluded air transport arrangements with either country for
through services beyond Paris.
(e)
(?)
(g) Before the shortage of foreign exchange becams so acute,
Air France was permitted to order 25 DC-3-type aircraft,
15 DC-40s and 13 Constellations because no comparable
French types were available and it was desired that the
company not be placed at a competitive disadvantage.
(h) :'ee 3 (d). At a tripartite meeting of French, British and
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I Americans in London "eptember 1947, the French and US posi-
tions with respect to the multilateral air transport
conference now in progress at Geneva were apparently
reconciled. France is a member of the International Civil
Aviation Organization (ICAO) and Air France is a member
of the International Air Transport Association (IATA)e
primarily as a commercial, economic and political asset.
r. ' e it is intended that eventually the manufacturing
industry will supply all the needs of civil air transports,'
its present inability to do so is not impeding the domestic
or international operations of Air France which has gone into
the foreign market (principally US) to acquire the most
modern aircraft and facilities. Air France is, nevertheless,
.utilizing French aircraft production to the fulless extent
The armed forces do not influence civil aS.r policy, although
civil air transport is regarded as a reinforcement of the
military air potential. Civil air transport is considered'
possible. It has already taken delivery of ten twin=engine
Languedoc Transports and has placed an order for thirty more.
Though not dominated by the views of any foreign power in*
the matter of air transportation, France has nevertheless
shown considerable willingness to cooperate with the US.
As a member of ICAO, France is committed.to adhere to decisions
of that organization.
6.' Published fi vres 'concerning the combined French military and
civil aviation budget (fr. 447,871,47.5,000), while.indicating
that a large percentage of the total amount has been allocated
to civil aviation (cormercial air operations, maintainance of
airports and facilities, communications, civil aviation schools
and a small sum for the encouragement of private flying clubs),
represent the extent of legal authorization for contemplated
programs rather than the actual funds appropriated for expen-
diture, Funds for certain activities, furthermore, appear in
the report to be dispersed in such.a way that it makes diffi-
cult a realistic analysis. :In short, the budget probably
exceeds the maximum financial expenditures possible under the:
prevailing economic crisis.
7. ?rhile'thero is no vested interest capable of exerting influence on
the government's air policy, officials of. the government-owned
Air France naturally endeavor to prevail upon the Government to
accept their views. These views carry considerable weight.
8. fee 2 (f).and (g).
9. see 2 (e) and 6.
10. Most aircraft manufacturing is nationalized andsubject to
direct Government control and financing through the Budget.
Private companies such as Preguet are working on new develop-
ment, This company, for example, has long been interested in
helicopters and at the moment is receiving Government assis-
tance in the development of a large cargo prototype. '
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B. CIVIL AIR OIOA2.'IZATIONS
1. Nutional Assembly (Supreme Transport Council);
:iinistry of Public ":orks and Transports (lecretary General
for Civil Aviation);
Ministry of Foreign Affairs;
Ministry or National Education;
Office Francais d'Lxportation de i:Tateriaux Aeronautiques (OFL1dn);
Air liinistry,`
National scembly -- shapes aviation policy through
legislation, and implements that policy t',rough ap-
proprations,
Supreme Transport Council -- under legislative action
of the National Assembly, in August 1947 the Supreme
Transport Council was created with the requirement
that 7ithin the following 12 months it present a plan
for the rehabilitation of T'rance's transportation, with
a view to reorganizing and co-ordinating these services.
Ministry of Public .?orks and Transports -- is respon-
sible through the Secretary General for Civil aviation
for policy-making, the economic and safety control of
civil air transport, both scheduled and non-scheduled
private flying, and in cooperation with The Air Ministry,
is responsible for aircraft procurement for Air France,
The Ministry of Transport in also responsible for the
construction of airports and the installation and opera-
tion of connunication facilities.
The Ministry of Foreign Affairs -- deals With all civil
aviation questions involving relations with foreign
countries.
Z7:e Ministry of National '3ducatio -- controls the State
schools offering aeronautical training,
The Air 11inistrv -- is responsible for the aircraft manu-
facturing.industry and directs research activities and
aeronautical education. (Fee also 2 (e) and (f).
The OFEMA -- is responsible for promotion of export sales of
aeronautical equipment.
3. (a) The statute on civil aviation has not yet been passed by
the Assembly. ilence,some observers question whether or not
current government decisions will endure. These, however,
arc in the minority. Former private manufacturers are prone
to criticize the activities of nationalized factories and
the theory of nationalization itself.
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 (b) As all forms of public transportation are nationalized, there
is no competition between them.
(c) The principal political criticism comes from the Communist
Party, which is apt to criticize almost any policy in'the form-
ation of which they play no part. Some segments of the more
conservative public, which are opposed to nationalization,
have likewise criticized government policies with respect to
the aircraft manufacturing industry.
4. Them is little duplication between these agencies. The principal
overlapping of functions has occured on the question of transport
aircraft procurement, where both the Secretariat General for Civil
Aviation and the Air Ministry are concerned. lay conflicts we
resolved between the Ministries concerned, or failing that, the
question m ' be submitted to-the Council of Ministers for final
decision. -
5. Due to the present .delicate political situation in Fiance, it is
impossible to predict whethyr.a reorganization of Government egen-
cies concerned with civil aviation is to be'espected.
C. PHOCF~S AND RECUI.ATICKS
1. Air Routes
(a) The Secretariat General for Civil Aviation awards air routes.
(b) All major-air routes are awarded to Air France, Secondary air
routes are awarded to private operators on much the same basis
as the Civil Aeronautics Board determines route allocations in
the United States.
(c) Carriers are required to confonu to safety regulations which
in the main are patterned on ICAO. recommendation. With
respect to Air France, a certain quality of service is expected
and on its major routes the government's policy has been to
restrict volume of operations until it is satisfied that the
company's organization is equipped to render a satisfactory and
safe service, Private operators are not authorized for service
which would give any appreciable competition to Air France,
(d) Air France is required to operate, certain Empire and national
prestige routes which are uneconomic and which the management
of the company might well prefer to discontinue. This company
operates all of the scheduled international services and has
certain latitude in deciding the priorities to be assigrxed to
new routes. Last August, for example, Air Fiance inaugurated
an air service Paris-Frankfurt at the suggestion of American
services in Fdurope although this'service would not normally
be included in a list of high priority services. New services
may be inaugurated by Air trance only tdth the cpproval of the
Ministry of Transport. Since non-scheduled operators are
entirely private in character, the government has no compelling
interest in authorizing these services.
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 (e) See (d) above.
(f) All carriers may apply for any new route,. but the well-known
policy of the gpvernment deters private operators from apply
(h)
ing for routes which would clearly be allocated to Air France.
In general, competition is not permitted over identical routes,
although due to the current shortage of trained ground person-
nel and facilities temporary authorizations have been granted
to private operators to parallel Air France services, particu-
larly between continental France and North Africa.
Air France is the national instrument, hence the revocation of
this authorization would require a fundamental change in policy
and legislations The authorization for private carriers. is
normally of short duration--in many instances subject to revo-
cation on one months notice.
2. Rates
(a) Most services being international, rates are fixed by the gov-
ernment with due regard for minima established by the Interna-
tional Air Transport Association.
(b) Rates are based largely on economic and competitive considera-
tions.
3. Safety
(a) Safety rules and regulations are promulgated by a Secretariat
General for Civil Aviation. In the main, these are patterned
after ICAO recommendations, although specific regulations maa
be promulgated as required to cover exceptional situations.
(b) In general, regulations appear adequate. Some criticism has
been voiced on the question of enforcement. This has not been
due to any lack of good will on the part of the French, but
more to'a lack of trained personnel and the lack of experience
with regulations, based to a considerable extent on United
States experience acquired in recent years when the French,
due to the war, were virtually out of touch with modem air
transport safety problems.
Safety regulations are impartially enforced.
Inspection
(a) Standards for the inspection of equipment and personnel, for-
merly in accordance with Commission Internationale de Naviga-
tion Aerienne requirements. now conform to.tbose of ICAO in
all instances where the former have been replaced. Accident
investigations are conducted under the direction of the Secre-
tariat General and, although not so formal. as those conducted
by CAB in the United States, are approached with the sane
attitude of impartiality. The results, however, are not germs
erally published. On occasion it has been suspected that
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 efforts were made to quiet further discussion when it was indi-
cated that the pilot ties clearly at fault and it was feared
that too much public discussion might give rise to political
difficulties. Nevertheless, it should be emphasized that even
in these instances high officials have made no effort to place
the blame elsewhere.
(b) Since most of these regulations are modeled on ICAO recommenda-
tions, they are presumed to be adequate. They are enforced by
the Secretariat General with all the vigor which a reduced
budget and small organization permit.
Airrort and Cocatione
(a) Airport traffic control regulations are patterned on those
recommended by ICAO. Large airports such as Orly and La
Bourget are restricted in so far as possible to transport
aircraft.
(b) The Military service operates military airports and the Secre-
tariat General to civil Aviation operates all civilian air-
ports (except small private fields).
(c) ICAO procedures are followed for comwunicationa.
(d) The Secretariat General operates the communication systeh.
6. orts and Forms
Air France is required to submit all of the usual operating and
financial statistics such as required by CAB In the United States.
.Other reports required are principally those prescribed by ICAO..
French-civil aviation ceased to exist during the war and the gov-
ernment organization had to be almost entirely reconstituted after
the liberation of France. As yet, the formal statute on civil
aviation has not been passed. Therefore, technical requirements
have been limited largely to those prescribed by ICAO. All reports
on civil aviation are submitted to the Secretariat General where.
they an coordinated and utilized in the shaping of new policies,
the modification of. existing regulations, or additions thereto.
1. French civil aviation has made a vigorous attempt to reestablish
its pre-war international position,. In the early post-war stages
it was handicapped by the direction of a Communist Air Minister
whose staff in the main was selected more for party allegiance than
professional ability. Since its trensfer to the Ministry of Public
Works and Transport.. Government civil aviation has made considerable
progress toward achieving its immediate goal. To this end several
missions and various important individuals have visited the United
States and the United Kingdom, Active participation in ICAO is an
established French policy and sincere efforts are made to follow
the. recommendations of that organization.
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 C
The Secretariat General :'ss honestly administered but the handicaps
of an insufficient budge'.; and the lack of adequate trained person-
nel have made it difficu;.t for the Secretariat to discharge all of
its obligations in accordance with the high standards which the
United States La aecastciaed to expect. In view of the shortage of
equipment, funds and personnel, the government does a creditable
job although on occasion American carriers, accustomed to CAA stand-
ards, have criticized than results. Even the critics of the Secre-
tariat General have not, however, impeached the good intentions or
sincerity of effort of f.'u3t organization.
2. The greatest single fect)r impeding the development of French civil
aviation at this time is the shortage of dollars, a circumstance
over which the country has no control. Another important source of
weakness is a shortage of skilled personnel adequately trained in
current techniques. Th:'., latter is being overcome by sending groups
abroad for training, imp::oving the training techniques in France,
and studying new develojilents, regulations, procedures, etc.
The manufacturing industry has long been known to be week with
respect to the productina of aircraft engines. While France is
attempting td remedy th:,a deficiency, steps have been taken to pur-
chase American engines ,nrA arrangements have been made to manufac-
ture the British Rolls .6,3yce "Nene? jet engine under license.
General criticism of the industry has been on the basis 'of inade-
quacy of production and inadequate promotion of the development of
new types. Most of then: critics are inclined to take the position
that all these ills cou't,d be cured by denationalization and the
return'of factories to jrivate ownership.
Air France recommenced operations after the war, on Janiuary 1, 1946.
Until comparatively recent months that company?e aircraft mainte=
nan.ce left much to be desired, More recently, however, the intro-
duction of new personnel. into the organization and the tightening
up of maintenance procedures in consultation with American factory
representatives has brc!ught about a. substantial iurprovement to the
point where it is 'believed to be entirely compatible with the
requirements of safe airline operation. Financially, the-co pacy
has made remarkable protxass considering the recent increases in
wages paid plus the fact that the company is required to operate
many route miles of uneconomic services to the colonies and depend-
encies.
Factors favorable to Frcnch commercial aviation'areI a long tradi-
tion as a pioneer in the field .ond as a leading air power prior to
World War II; considerable pre-war experience in long range inter-
national aviation; an aircraft industry,wbich in th` past.has demon-
strated its competency under conditions providing competitive incen-
tive; a heavy investment in colonial and dependent areas, making the
maintenance of rapid communications both politically and economic-
ally desirable; and lastly, France's geographical position. kIithin
three hours flight of Paris are twenty-three European cities. having
a population exceeding 500,000. A large traffic potential is thus
apparent.
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V 0
CIVIL AIR POLICY
FRANCE
SUPRE4.1E TRAISFORTATION
ADVISORY BOARD
repares Plans and Al,&Ises
the Minister of Public
Varks and Transports
MINISTIi'.?OF PUBLIC WORKS AND
TRANSPORT
Constructs Airfields: -
Installs Aviation'Ca munication
Facilities and Navigational Aids.
Procures Aircraft for AIR FRANCE;
SECRETARIAT OENF,RAL FOR CIVIL.
AVIATION
Operates Civil Air Fields
Avards Air Routes
Issues and Enforces Safety
Investigates Aeoidr '1a
Controls Air ^.:Sfio at civil Air-
_
fields
Isats^s Licenses to Pilots and C? -
tificatea 'o? Riftrthiness for tjQ.
Operates Aviataun Cahsunications?
and Navigational Aids
Controls-tine Nationalized
Aircraft Manufacturing
Industry.
Directs Aviation Research
and Education.
OTHER FORMS OF
'T'RArMPORTATION
Goverment- Owned All-
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1. The basic policy of the Netherlands is to foster civil aviation as a
national industry important to the overall economy of the country.
This is in keeping with the economic tradition of the Netherlands as
a leader in world transportation. Being a country of small area, the
Netherlands considers civil aviation as an important contributor to
national prestige and the Government has shown willingness to under-
write any deficits which arise in operational costs and is prepared to
relegate to a secondary position the question of profits. In the present
European currency crisis, civil aviation acquires a greater importance
through its production of foreign exchange. A basic policy for some
time to come will be the limitation of commercial air operations to a
single "chosen instrument" (Kai-Royal Dutch Airlines). In the field of
international civil air policy the Dutch strongly support the most
liberal international policy. Civil aviation is not used as an instru-
ment of national policy to obtain other political objectives. The
Government has the controlling steel, interest in KI2.. and is in a posi-
tion to determine long range policy; however, in practice, the present
Managing Director of the XW actually has a dominant voice in the de-
termination of Netherlands civil air policy. In all other ways the
company is operated as a private enterprise.
2. (a) The Government promotes scheduled air transport for purposes of
national policy through the provision of capital investment funds
which amount to more than 95% of the corporation's outstanding
stock. (Pending legislation for a reorganization of the company
allows for the Government's holding 515 of capital stock.) Be-
cause KW, is a source of foreign exchange, it i2 accorded a privi-
leged position by the Government in questions of allocation of
materials and foreign exchange.
(b) _All of important non-rchedcled air transport is conducted by KW.
The Government has licensed one other carrier for non-scheduled
.operations, but this activity is presently limited to local air
taxi service in one-engined aircraft.
(c) Due to the limitations of local aircraft manufacture and currency
for the purchaso of foreign aircraft, the Goverment cannot give
as much assistance as it could like to individ.::ls interested in
private flying. It does promote the manufacture of gliders for
private. flying.
(d) The Government gives limited support to aircraft manufacture through
subsidies and the allocation of raw materials and foreign exchange
in an attempt to recreate a manufacturing industry; all attempts
are limited because the greatest need -- transport aircraft -- are
not likely to be produced locally for many years, consequently
American aircraft will be relied upon to fulfill KU!, needs.
(e) The Government promoter research through subsidies and loans to
Government-supported research laboratories with a view to bene-
fiting the manufacturing inc istry.
(f) The Government includes acrona-itical engineering caarses in its
curriculum at the :tote University of Delft to develop engineers;
apprcaim:ately 100 student:: are pursuing these _tudies.
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(g) The Government provides for the training, of'transport pilots
through an Government-opcr::ted school pith an enrollrnter the
air trap-port field. The majority opiniori approves the present policy
because of its success in the past and the economic and operationtl.diffi-
culties to be encountered in establi-hing new air carriers.
2.; The strength of the Netherlands' civil aviation lies in the?transporta-
tion and air-mindedne's of the country, its excellent leadership and good
operating record, its strong government backing, its liberal, progressive
policies, and its posses:-ion of a good international airport (Schiphol)
occupying a central locr.tion in Western Europe. The ::?eakness of the'
Netherland:, civil aviation program is due to lack of foreign exchange,
aircraft manufacturing facilities and building materials; conditions for
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C.1 0
CIVIL AIit'I,.OLICX
. NETHERLANDS
MIRISTRY OF TRAP7SFORT AND POUTER
I_
TUREE DEPARTh UI!S HAI.DLINf
o'rwz FORi?:S of TRniSIP
RIJKtUGATVAARTDIEI+ST
(N "fh' ~3t,APDJ.S AFROI AL'fICAi. SERVICE,'
Director General
r
ROYAL DU C i AlIRL?tcES
{Goverxtont-Cmtrolled)
Tr" CHNICAI? DIVISION
Airfield Construction
i Licenses -
]:imorthiness O2X icates
MAIL & POLICY DIVISION
Political. Matters
Ecoramlo - Jhdioial
Ittaas
Intorna+lonal Conferences
Radio dsYgti` ".~
Traffic Control
Al '111ISTRATIVE DNISION
Records - Personnel
AoooUntiM
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 SECRET
SECRET
 SECRET -
A. CIVIL AIR PCiLICIhS
1. music policy of the as rc;;ards civil aviation is to create a
lar,;e anc oificicnt air trans )ort s, ste..:, v.ihic!a .All not only au-
able rn)ic: co..,aanication m.ton;; :idol,; seoaruLec sections of the
Joviet ?.nion one titrt satellite countries, but ai 11 also act as a
reser:'u or; unization r ntc? to uu~mont Joviet .aili Lar, air
Soviet basic air iolicy, 1urtnenaore, sacrifices tae oevelop:aont
of vo rlc-v,iLe air transport operations to t .w i:n:aodi ate military
and civil :.Pecs -:.i chin the J:;J3. ueter.,iinaLion of iolicy and
con-Acte control of all civil aviation are vested in the ;;overr4ont.
vovornment control is eii'ectec turou it turec i:w oendont or;
zatione, Baca controllin; so,.,.e as,ect of ooviet nun-military avia-
tiott. i::eso or-,anizaLicns arc)
Joravlcniyo :razncuuskovo Vuscus.),-.ovo : loca (;i ivr'--:.lain Ac:aini-
stration of tao Civil ..ir rieet) uncor Lac :inistcr of
Ar.aed :'orces
Cjntrai oovict Council of the flsoaviakhiu (..ociet,i for the
:'ro.uotiozi of Aviaticn anc ,C:aisLr,f)
Administration of the :lev Sev:aor-)ut (::pin ;Cninistration
of the .:ortnera .,ea 3oatu)
to use of Joviet civil !tvi?.'tion as an iastrur.e::t of national
')Jlic is evicetlt in .:.any ways. inc tjnical oxu..71o is irovidod by
the post::rir civil air a..rae;aonts t'utwuen the Jsi,.i and the aoviet
satellite countries. (A ciscutsion of thasu a?re3.nents is con-
tained in the reply to question ;..3.(h) of this report.)
2. Tie ouviet government controls all aspects of civil aviation.
(a) The ;overm:tent plans ano controls tae ccvelo?:wont zinc expansion
of scneeulec air transport. the tourtn Five-Year Plan calls
for 115.000 kiloc.etcrs (105,900 statute idles) of air routes
by 1950 (an increase of aporoxirtately 25; over 1940). the ;cost
i..port.uit lines are to be oquip )ed for year-round and night
flin;,. Sixtdon airiores -till b.t reconstructed for use cy
heavy hin-speee planes. Ttenty air stations are to be built
or rebuilt. the .",..ief'of the Jivil Air r'leet nas announced that
an atto:not will be .;Lac., to increase oa:sen;cranc iroiJnt '
traffic v.-i_hin the next tv.o or three years to oi_;ht to ten Limas
the ?)rev:ar fi;urc. it is estimated that in 1S'40 civil aviation
mac a turnover oorfor.:raaoe of 34.000,000 ton-kiloutotors
(21, 1W.000 ton .Alas), carried 49,000 .aetric tons of froi;;ht
82K and 309,000 ;)asson.;aro. his would inc.icate an
annual .;oai for Ate ne!ir future of aorc than 300,000,000 ton-
kilo.:.dters (13c,oo0,000 ton .ail?ts). n:,urly 500,000 tons of
frci,ut am bar;,;'age, and anroxisatcly 3,000,000 oassen1ers.
SECRET
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 SECRET
0
(b) Control of non-scheduled air trans,ort is maintuined by trio
;overn:aont ttirou,;h all throe civil aviation or?anizutions.
Tim s:aall aircraft units of Lao various ninistrios, v:uich
perform non-scucCuled orerati-ons, are detailed to those var-
ious ministries from the JCVF and the Osoaviakni:n and aro
considered to bu actually a part of their parent ori;anizutions.
Tao majority of the air ooorations undertaken by the _,ortriern
Sea Route are probably non-scheduled in character.
?(c) Private flying, as it is known in the United States, is non-
existent in the J;3a. There is hotovor, a system oC flying
clubs controlled by the Jsoaviakhiia, which night be compared
with the ;ivilian ?ilot 'iraininc Pro;,ra:n of the United otates.
(c) All aircraft manufacturing in the Soviet Union is controlled
by the ::inistr, of Aviation Industry. A certain a:aount of
supervisory control of tiro aircraft industry is also maintain
cd by the ...inistr,; of Ar:aod i'orces, State Planning Conuaission,
and Acade::4? of Jciencos, and the ...ain Administration of the
Civil jr riFleet. the dcuree and score of the control exert-:d
uy these ageuci:a, iioiacver, is unknown. Inc industry, which
hau expanded to the aaximuia possible dur;roe during C;orld ;,ar 11,
has gone tiirougn a period of readjustuant. this mignt be con-
sidarec as govornmont reatr'tint on aircraft manui'acturing. The
incustr; has erobabl,- reduced its Production quantitatively and
is now operatin3 at neacoti:ne levels. Tao cesi;n and procuc-
tion of large and medium size air transports is progressing.
(o) An extonsivo research pro;,rarn is quite evidently in progress.
Large numbers of ;;errnan scientisLs and technicians, together
with +;ersrur rescarcri facilities, nave been integrated in this
?ro;ra:a. T:e pro,;ra:n is dir-cted by the leading :soviet scient-
ists. Shore is evidence of emphasis on jet and rocket oro-
pulsion. (Eight cifferont oostz.ar types of jet aircraft have
been identified.) Principal control of all basic scientific
research in the Soviet Union resLe with the 1caderr./ of Sciences.
This organization is responsible for formulating the Five-Y;ar
plan asit affects scientific resoarch. (In addition, the
:'min administration of the Civil Air fleet is s:)ccifically
char--ed with the devnlop.acnt of all non-nilitary aircraft, and
has its own aeronautical research instituto.) Tae Acace:ay of
~cicnoos is also rasoonoible for determining tad relative
priority of all scientific development. A curisideruble amount
of this rescare i actually is carried out by Lilo research in-
stitutas of the .:inistry of Aircraft industry.' Aeronautical
r.iseare:r is also carried out by institutes subordinate to the
:_inistry of Armed rbrces.
Aeronautical enginccrin? ed,icatio:i is procably controlled by
the ::inistry of ..izher .,ducation.
The training of pilots and technicians for the GVF is under-
taken in schools of the Civil Air Fleet. The following list
snows the location of Civil Air Floct Schools in 1944. It is
not knovin t et:ier all those schools are now in operation; there
has presuuably been a reduction In the training program with a
consequent cleriination of' some of t.iose centres.
SECRET-
 Location of Civil Air
Al:aa '. L:.a
S ~C;1
habarovsk
llz izak
Frunze
Gorki
lssyk-::ul
Syr-liarinskaya
SECRET.
:'uoirno
C SC OVt
..:endow-. 'us ?ino
:ovosibirsk
Pe nza
Sterlita..tak
Sverdlovsk
ras .kent
Trainin., of forci?ners is liStited to tuose of 77rovon rolitical
reliability" fro.;, tae ,oviet satellite countries..
(h) Control of all ox?ort and i.,:pori, trace is exercised by the
Soviet ?overnsent turou,;n the ;inistry of eoreii;n Traco, iriricn
ordinates this activity with tine ;tuts Planning Cotntzission and
tae .inistr3 of Ioroi;;n Affairs. L.aports arc of two typess
(1) standard electronic equi?rraont for use in aerial navigation
is required in quantity and obtainod under trade' treaties; and
(2) auiencec :aodols of aircraft and po;:er units are required in
li:aiL.d quantity for exouriatontal 7ur-)osess they are obtained
uncor inoivioual contracts. (:Sri'tisa jet -rupelled aircraft
and 7o::ar. units have been ?rurchasod and 96 manufacturers nave
been a ,roached thouch r:itaout success.) ;xport of aeronautical
equi naent is v;r,r li:aited. Transport aircraft and warp carts
ha .'o been authorized for ex)ort only to trio dopeucent satellite
cou:_trioc and only in ::e,:;li,;iblo qunntiLies.
The ,;ovorr.::ient controls and ro_,oL es the doveloo:aent of all
airports and air navi.;utio::nl facilities. An a::tbitious iro; rata
of.air:)ort construetio., includ.iac tao installation of navi;a-
tional aids, is contained in the current Soviet ive-Year Plan.
(see sub-para.,rn?xr (a).) '.lost of the airports of the Soviet
Union are controller: by t:te .nilit:tr? forces; however, there
arc airfields of a purely non-:ailitary nature vrhica are con-
trolled by the Civil Air 4'leet, Osoaviakhi.a, and the iortaern
Sea :acute. Air navi-ation facilities are boliev>-r;r:Firoly C^r;1 r1
il9.rc3 L:?*: c, '?;-r; ov4rc.ii i:t'spsiuu t.-as to demonstrate
ijonie.
)]'r^2?z Ctrl I'Coj?a :'lore :JOizod iron '01; Jutah and
13,:1Cir.nsu .,,,r cortre.ct 1,ich neutral S..".teerland, t11,:
1u1I7 :1:ac !;C-.i's r:ns. DC-3"s were kept ".breast of the
1::Jcat C I,t ii i)cug l_:.s ft otory changes throughout the
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(h) For Lufthansa and the International Air Transport Associae
tion and Lufthansa?s operations of foreign airlines, see
A. 3 (a). Germany regulated Ito air traffic and commercial
relations with other countries throve separate treaties.
These so-palled Aix Traffic Conventions wore all prectie
cally identical, end generally followed the C.I.N.A. Con.
vention. Although Germany, like the United States, was
never a party to that convention, these separate treaties
were often described as preliminary, end.were provided
with cancellation clauses. ,
Such separate treaties were concluded by Germany with
Staitzerland(September 11+, 1920), Denmark (April 25, 1922),
The Netherlands (July 2''4, 1922) Norwzor (January 23, 1925)0
Austria (u y.19, 1935), Sweden May 29, 1925), arenas t
22, 1920), Belgizn (bMay 29, 192 1]),, Czechoslovakia (January
22, 19" I (Map' 20, 1927), Great-Britain (June 29,
1927). S o epa1,a (December 9,.1927), Poland (August 23, 19 ),
United States (May 31?, 1932) Hungary (January 13, 19331
Yugoslavia (September 3n 193 ), Greece (AOvember 9, 193 $.
Portugal (Afarch 11, 1937). and the Union of South Africa
(March 17, 1937)9 1
Of the various international conventicas plated by Germany,
the Warsaw Convention of October 12, 1929 is the most im-
portant. On January 12, 1937, the Second Convention of
May 29, 1935 (me Bose Convention) regarding the Unifica-
tion of Rules Relating to the Precautionary Attachment of
Aircraft cams into force,-together with the Act regarding
the Inadmissibility of the Precautionary Attachment of
Aircraft. The other Rome Convention, relating to Damages
Germany.
it, The administration of both,civil and military aviation by, one
ministry indicates how completely they were allied in the German
point of view. Germen civil aviation,, strictly speaking, was
not influenced by military aviation; it was merely another aspect.
The lufthensa was a secondary Air Transport Service for.the
Luftwaffe; the air sport movement was .pre-military training for
the Luftwaffe; ib the absence of personal flying or coaLoetitive
air transport, the aircraft industry had no recourse but to the
Luftwaffe.
What will be said in this paragraph about civil aviation as a re-
inforcement of the military potential is not confined to Germany
alome. The British Cadmon report of 1939 states that nthe.prob.-
lem of the air is one - two sides of a single coin : and the
military aspect of aviation cannot fundamontally be separated
from the civil aspect". The civil aviation of any-country is an
auxiliary of the military in that; (1)'it maintains a system of
high speed communication for government and industry, An both
peace and war; (2) it justifies the existence of a system of
lighted and radio equipped civil'airryaye; and (3) it creates an
organization of highly trained personnel.
caused by Aircraft to Third Parties on the Sufa: e, was not
ratified by Germts?yy. The International Sanitary Convention
for Aerial, Navigation signed April 12, 1933 was in force in
-31@
? UNCLaSSIfiED ?
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who can be drawn upon for military use, The relationship be-
tween the peace time maintenance of the aircraft industry and
civil aviation is, of course, a fundamental one. It is not.in'
eluded herd because German civil aviation'after. 1933-was not an
important customer of the aircraft industry, although perhaps its
best advertisement,
Since the volume of transport operation deterfuinsa the extent of
the contribution civil aviation can make in any of those respects,
it is doubtful if German civil aviation was regarded by the Nazis
themselves primarily as a successful civilian counterpart ?of the
Luf tvafFe.
Part of the answer is, probably, that Germany valued its civil
aviation as an immediate political activity of great potential,
commercial value. German students of air transport repeated the
classic statement of the 1930 League of Nations:rspart that state
participation in Etrcpean civil aviation is an act of politics,
rather than of ec n a ice. Indeed, Walter Fahl says that .&U trans-
portation is an act of politics, but that air tranaporto more than
any other form, is an act of high politics; The phraao,'high pol-
itico, had connotations for the Nazi mind that require definition.
It is, in essence, the politics that Clausewitz meant when he said
war is the continuation of politics by other moans. The Nami con- -
tribution was to stress,the converses "peace is the continuation
of war by. other means".
German aviation certainly was not economic in what the Fazis
called the "narrow" meaning of returning dividends on capital in-.
vested. There is no doubt, however, that the ultimate aims of
Gorman expansion in South America, for example, were broadly eeon-
omic,.with the purposes of attaining markets and rav'materiale.
This trade campaign was also a political enterprise. For W.Burdcn
days, in his "Struffle for Airttays in Latin America", "under the
Nazi regime, foreign trade became so regimented as to constitute
for all practical purposes a part of. government activity. The full
force of the German government was consequently thrown behind the
propaganda efforts designed to help the trade program and increase
the prestige of the P.eich". .
5. German+a. civil aviation was under the nominal, supervision of the
Council of Ambassadors from 1919 to 1926. Froa,the Paris conven-
tion of that date until Germar.:.ent of that Province. The subsidy will probably be discon-
tinued after this fiscal year,' . ..
a
The Canadian lost Office Department, cdntrary~ to American prac-
tice, has succeeded to a lar-e extent in freein itself from
bein', used as a vehicle for subsidy naynent. Last year the Post
Office entered into contracts with the carriers by which it
agreed to pay one and one-half mills per pound mile, on a de-
creasin;; yearly scale, for the transportation of mAl.
RESTRIC`S
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Although this rate is some four or five times higher than that
paid in the United Mates for similar services, it is never-
theless not regarded as a subsidy because postal revenues ex-
ceed the payments. However, the Post Office has been forced,
in a number of instances, to revert to the old system of pay-
ments per mile for a guaranteed minimum. One or two of the
routes of Maritime Central Airways, and at least one route
operated by Canadian Pacific, are paid for at the rate of 50?
per mile flown with a guaranteed minimum. The two large Cana-
dian air carriers are in a very favorable position, however,
in that they each have parent companies who absorb their losses.
In the case of Trans Canada Air Lines the operating losses are
made
good by the Canadian Government, while Canadian Pacific
Railways, by means of unsecured loans to Canadian Pacific Air
Lines, absorbs any loss its subsidiary may have.
The only-subsidization of aircraft manufacturers which occurs
in Canada is discussed under paragraph 2 (d).
The extent to which the Canadian Government subsidizes airport
construction is discussed in paragraph 2 (i).
Such subsidization of education and training as is done in Can-
ada was discussed under paragraph 2 (c) and (g).
(f) The development of transport aircraft in Canada must be divided
into two categories, namely, large transports and small, or
"bush" transports. Canadian Government policy, and the reasons
therefor, is outlined in paragraph 2 (d).
(g) Until mid-1946 all large transports used in Canada were imoorted
directly from the United States. This statement should be quali-
fied with the observation that all DC-31s currently in operation
in Canada were war surplus C-47 aircraft which were converted
in Canadian plants, and mostly by Canadair of Montreal.
:aedixim sized and small transport types, which are used largely
,in bush flying, are generally of Canadian manufacture, although
some.American types are being used. Of the Canadian product,
most are Norseman, although recently both De i;avilland and
Fairchild have produced their own small transports, namely, the
Seaver (which is just now coming into production and is a 4-5
place aircraft), and the 'r'usk,-, which is a some:-.hat larger and
morq versatile ^achine, although considered to be under-powered.
There are some converted .vro-'.nsons and a fern Do !;avilland
Dragon Hapides in service. The Canadian Government has no par-
ticular policy with regard to the use of foreign aircraft ex-
cept that since the war ended its general policy has been to
prohibit the importation of second hand aircraft in excess of
6,000'lbs. The current shortage of dollars, of course, acts as
a deterrent but the tariff, generally speaking, does not.
(h) Although Canada has bilateral air transport agreements with the
United States,, the United Kingdom, Australia, New Zealand, Ire-
land, :dewfoundland,,Portugal and Sweden, only American, British
and Australian air transport companies presently operate into
the, Dominion. The air carriers operating services into Canada
-7-
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 are as follows: Northeast Airlines, Colonial Airlines, Amer-
ican Airlines, Northwest Airlines, '.estern Airlines, United
Airlines, Pan American Airways, British Overseas Airways and
Australian National Airways, which is soon to become British
Commonwealth Pacific Airlines.
All Canadian air transport agreements are bilateral in nature
and cover four-Freedoms operations only. Canadian Government
officials have indicated privately that, pending the outcome
of the Geneva Conference on a multilateral air transport agree-
ment, Canada will conclude a limited number of Fifth Freedom
arrangements, but only where this is to her advantage. Canada
is not interested in exchanging Fifth Freedom rights on a multi-
lateral basis.
Canada is the headquarters of the International Civil Aviation
Organisation and the International Air Transport Association,
both of which have their :-lain offices in Montreal. The Domin-
ion Government has ratified the Chicago Air 6;avirati.on Conven-
tion. It is also a member of the loosely dra,;r- :irpire Air
Conference ::which, in general, exchanzos views on 3mpire civil
air problems but is without power of action.
Canadian civil air policy is influenced,.to some extent, by military
air requirements. Not only is civil air transportation of vital im-
portance to any Canadian wartime economy, but the civil -establish-
ment is capable of providing a considerable number of trained person-
nel to meet wartime demands. That Trans-Canada Air Lines and the
Royal Canadian Air Force should both order the same general type of
four engine transport is an indication of the integration of civil
and military air policy. The fact, also, that the ground establish-
ments and facilities of Trans-Canada Air Lines are in many instances
former, or still existing, R.C.A.F. stations is yet another indica-
tion of this fact. Naturally, the aircraft maintenance establish-
ments of the civil air carriers are available to the R.C.A.F. in
time of national emergency.
The military establishment does not, in a precise definition of the
term, control civil aviation. The Canadian Government does not oper-
ate in that fashion, but all matters of national policy are deter-
mined by the Cabinet in the light of the over-all existing facilities
and requirements of the nation.
It might be said that Canada has always attempted to ;work out her
own civil air policies, but nevertheless these have been influenced
considerably by the diverse developments }which have taken Place in
the United States and In the United Kingdom: in many respects, the
example and success of the former has had a trreater' influence on
Canadian developments than that of the latter. This is no more
than natural in viers of the proximity of Canada and the United States
and the fact that so many of her present air transport operators re-
ceived much of their early,training in the United States. The re-
lationships which exist between United States and Canadian operators
have always been close and cordial. Again, this is no more than
natural in view of the many trans-border routes which have been in
operation for the past ten years or more. British carriers, of
course, have not had the same advantage as their American colleagues.
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 The British have never understood the Canadian.civil aviation prob-
lem, whereas the Americans have had similar experiences and problems
and therefore can meet Canadian requirements.
In addition, there has been very close and effective liaison between
the various Government departments handling aviation problems in the
United States and in Canada. As a matter of fact, the Canadian Air
Transport Board, which was created in 191;4, was patterned very
closely after our Civil Aeronautics Board. The Civil Aviation Branch
of the Department of Transport is a small counterpart of our Civil
Aeronautics Administration. Despite these similarities, and despite
the close relationships which exist in almost all fields, Canada has
evolved her own methods of meeting her civil aviation problems. Ac-
tually, Canada cannot at present support more than one transconti-
nental operator and, in view of factors already cited, it is not
surprising that this happens to be a Government owned chosen instru-
ment. Similar instruments already exist in Canada's rail and ocean
transport, so that air transportation conforms to a general pattern.
Government ownership of transport facilities existed in Canada long
before it was seriously contemplated in the Mother country. `f:hile
it does represent a degree of socialization it. is only moderately
so, and was the most expeditious method of accomplishing a desired
result. To state it briefly, Canada's civil air policies have, in
recent years,, followed a "middle of the road" course between the
complete free enterprise which exists in the United States and the
state socialism which presently exists in the United Kingdom. In
most civil aviation conferences which have taken place since 1914
Canada has striven to reconcile the conflicting views which have
generally existed between the United States and the United riingdo:n.
6. The Canadian National income for 19h6 was approximately 9.5 billion
dollars. The national budget for the fiscal year ending 31.:tarch 1948,
is approximately $42,110,000,000. The total appropriation for nation-
al defense in Canada for the current year is about '1240,000,000,
with the Air Force being allotted about $60,000,000 of that sum. The
total appropriation for civil aviation development for the current
fiscal year is ~16,280,500.
During 1946, scheduled air transport operators in Canada spent
$21,171,229. This was F?774,159 more than their income. The entire
loss was attributed to Trans-Canada Air Lines and was absorbed by
the Canadian Government. Mail revenue for scheduled airline oper-
ators was ;;5,262,101, although this is not regarded as a subsidy
but rather in the nature of payment for services rendered. .
0
Statistical information on non-scheduled carriers is only frag-
mentary. However, according to the published. statistics, non-
scheduled operators had expenditures totalling $1,305,35h, which
was ;;5,115 more than their receipts. Reported mail payments to non-
scheduled carriers amounted to only 4,',5,759?
The Canadian Government nays a nominal subsidy to the Royal Cana-
dian Flying Clubs association, which amounted to only $5,000 this
year. Details as to expenditures of the Flying Club are not avail-
able.
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 0
So far as is known, there are no Government expenditures for air-
craft manufacturing other than orders placed with Canadair and
Avro. The DC-13-1's, 2L of which are being purchased by the
R.C.A.F., are contracted for at the fixed price of :54.0,003 each.
T.C.A,'s order of twenty DC-Lr.-2's are contracted for at ;1660,000
each. There is no information that the Canadian Government has
made any advances to Avro in connection with its order for turbo-
jet fighter aircraft for the R.C.A.F., although it probably has
done so. Neither i's there any information as to the expenditures
of the several aircraft companies themselves, since they have
never published any statements.
The Civil Aviation Branch of the Canadian Government makes a grant
of ?25,300 to the National Research Council for civil aviation re-
search. The only other grant, aside from that given the Flying
Clubs and Air Cadet League, is a small sum to the University of
Manitoba for an unspecified purpose, oh ich may be, however, to fos-
ter aeronautical engineering education.
The Canadian Government makes a grant of *25,000 to the Air Cadet
League of Canada. Actual annual expenditures of the League are not
known. As pointed out in paragraph 2 (c) and (g) the League under-
took a program of flight training for a selected group of not more
than 100 cadets during the last year. This program is to be ex-
panded as time goes on.
The budget estimates for the current fiscal year covering the con-
struction, maintenance and operation of Department of Transport air-
ports total 0,733,876, or approximately half of the entire appro-
priation for civil aviation purposes. There is no information as
to how much may have been spent by municipalities or private enter-
prises, such as Canadian Pacific Air Lines, in the construction and
-maintenance of airports other than those owned by the Department of
Transport.
The Civil aviation appropriation for air navigation facilities, that
is, the Meteorological and Radio Divisions of the Department of
Transport, amounted to C1,227,910 and '3,1L1,626 respectively. There
is no information as to private expenditures, if any, for air navi-
gation facilities.
7. Since Trans-Canada Air Lines is Government owned and controlled, al-
though operated as a private company, it exerts considerable influ-
ence on Canadian civil air policy. The Minister in charge of Civil
Aviation regards Trans-Canada Air Lines as "his baby." He leans
heavily for advice on the President of Trans-Canada Air Lines in all
matters of domestic and foreign civil air policy. For example, the
Air Line can and does make its desires known to the Air Transport
-Board, the Department of Transport, the Post Office and external Af-
fairs and very often gets its way in such.cases, but only insofar
as such desires do not conflict with overall Government policy or
contravene the air regulations. An instance of such pressure came
to light last year when American Airlines had a charter to transport
the pea crop from Toronto. T.C.A., if it had had the spare aircraft,
could have prevented American from being given a charter permit by
the Air Transport Board, in order to carry the crop itself. There
are other examples ;:here the wishes of the Canadian carrier have
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been taken into consideration ;There Canadian originated traffic was
involved.
In the broad sense of the term, there is no aeronautical education
in Canada. There are, of course, a number of exceptions. Some of
the universities give aviation courses, but so far as is known none
of them grant degrees in this field. Reference has already been
made to the activities of the Royal Canadian Flying Clubs Associa-
tion and the Air Cadet League of Canada. The annual grant of
t5,000 to the Association, which now has very close to fifty member
clubs, can hardly be called a subsidy. The enrollment in the As-
sociation is made up entirely of private citizens, most of whom en-
gage in flying activities for purposes of sport. ,
The Air Cadet League has a semi-official status in that it is spon-
sored by the Royal Canadian Air Force and most instruction is pro-
vided by R.C.A.F. officers. The peacetime membership of the League
is confined to 15,000 Individuals, all of whom are young boys of
.high school age. Their league activities are extra-curricular and
do not form a part of the high school course. The annual grant of
1,25,000 a year may be considered a subsidy, as well as the fact
that instruction is provided free of charge by R.C.A.F, officers.
The League is a movement very similar to the Boy Scouts, complete
with uniforms and summer camps. The greatest stress so far has been
in ground school activity and nre-flight training. The League has
just embarked on a program of flight braining which it hopes to ex-
pand in the future. As already indicated, and except for odd
courses, there is little or no aeronautical engineering education
in Canadian colleges and universities.
9. The Canadian Covern*nent and private industry both operate aeronauti-
cal research and development facilities. In the former case, the
National Research Council of Canada is the aria of the Canadian Gov-
ernment engaged in this type of activity. According to the.29th
annual report for the fiscal year 1945-46, the National Research
Council expended 5,1,582,111.58 in research activities, of which apt
proximately $1,200,000 was supplied to the Council by Parliamentaiy
appropriation.' However, of the total expenditure the amount at-
tributable to the Aeronautical Research Committee was only "38,250.23.
During the past year the Council engaged in wind tunnel tests, ex-
perimented in aero dynamics, balancing of aircraft control, did a
'large amount of work on the aero-dynamic design of a tail-less
glider, and conducted a variety of tests for the R.C.A.F., and other
Government departments and industry on such things as rain, snow
and wind gauges, tests on axial flow compressor blade sections and
tests on new aircraft of Canadian design. Tests were also made on
aircraft and allied instruments, for wing flutter and for electro-
thermo de-ici,ng'of aircraft, wings and propellers. The Council also
did some experimental and testing work on radio aids to air naviga-
tion, but there is no indication as to the cost of this activity.
In the private industry field both Canadair and Avro manufacturing
plants have aeronautical research facilities of their'own. The lat-
ter is said to have imported quite a few experts in the field of
aeronautical engineering from the United Kingdom, vhile Canadair
has been drawing on the Annierican market for experts in this category.
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However.' there is no indict! tign as to how many are employedq
the extent of the research, the facilities avail ble or the
cost of the activities. ?.pro, as noted, is .orking on a
turbo-jet fighter and a turbo-jet transport, but no detailed
information is yet available.
The tendency is to reduce governmental expenditures
for all types of activity from their wartime n=.ak, This
applies also of funds available to the Research Council?
There is no ..ray of knowing whether th" i manufacturers are
increasing or decreasing their expenditures for research
and daveiopment, ::vro is probably receiving financials
as well as technical assistance, from the Hawker .;iddeley
group of aircraft manufacturers in inland, with whom it
is affiliated, If this supposition is correct, then
Avro is at least semi=independent of Canadian Government
orders and the research and d--velopment connected til3fe:;ith,
In any event, aeronautical research and development activities
in Canada are ona small scale ':rhen compared with the
United States,
10, The use of Government o:?med plants by both Avro and
Canadair may be termed a subsidy, As in-l'.cated earlier
in this reports the development of the new turbo jet
aircraft by,Avro is dependent largely on orders placed
by the Canadian Government, al thou--gh the company may be
doing 'york also for its affili::ted companies in the United
Kingdom, So far as is known, Canadair has no n w types
of aircraft under dwelopr ent, but the PC-41-1 rind 2 was
developed and financed by the Canadian Government, Since
Canadian Govanement orders are important to both companies,
it seems safe to assume that the i'-ominion Government carries
some weight with the respective managements,
In the small and medi= 'aircraft field it is believed
that the manufacturers are independent and do not rec>.ive
any subsidy or financing from the Governments Such research
and development as they do engage in appears-to be on their
ovm initiative and is done to meet eristin.a conditions and,
demands.
1, The Cabinet (including the Privy Council)
The ienartment of ixt'ernai Affairs
The Department of Transport
The :sir Transport hoard
The T;apartment of National Defense for Air
The Air Cadet League
The National aescarch Council
:toyal Canadian "'lying Clubs Association
Soaring Association of Canada
The =Ir Industries and Transport Association
2. (a) The Cabinet (including; the Privy Council) determines
all national policy with regard to Canadian. civil
aviation, Inasmuch as the Cabinet represents the
Government in power its decisions may be regardecl
as final even though it may be obliged to go
before Parliament for authority to implement
the decision,
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The 1'?epart?cent of :xternal Affairs, as may be
supposed, handles all matters of a foreign
relations nature as they effrct civil aviation,
and hence corresponds to our Department of 3tate6
The Civil Aviation :ivision of the 1.enartmont
of 1'r?.-,nsnort co-responds to our Civil Aeronautics
administration, As.such, its activities embrace
the entire physical side of aviation, For
example, it o;rns and operates -cost of the airports,
it controls the, federal airways and the facilities
attached thereto, it resisters and licenses air--
craft and grants licenses to airmen, etc, '
Air Transport Board is patterned after our Civil
Aeronautics Board. Thus, it functions are
economic and judicial, It operates under the
terns of the ;aeronautics Act of 1927, and came
into being in 19U4 whenthe."let was amended, it
grants licenses to carriers to par?orm all scheduled
ahd non-scheduled flying in Canada provided these
services are, in its judgment, in the rublic
convenience and necessity, Carriers file operating
statistics, tariffs and schedules .;ith the Air
Transport Board.
Department of National Defense for Air, of course,
means the itoyal Canadian Air Force, whose functions
are believed to be self-explanatory.
Air Cadet Lea:;ue, as stated aboveb is a semi-
civilian and junior arm of the Its
primary function was to train young man as a
junior. volunteer reserve which -could act as an
aircraw feeder? Its paacetime function is to make
available a basic training in aviation that erill
better fit :.a:aadian youths for careers either in
the 33rvice, in civil aviation, or in other walks
of life.
The National tesearch Council and its functions
have been described in para;ra:t A,9,
lto~al Canadian `'1!.~np~Glubs r'ssociatioxi has already
been mentioned in para,'rarh P,,2. Its activities
are centered in the field of private flying, :":here
it conducts fairly extensive private instr,mction?
Soari . Association of Canada is a new and very
small organization which, to some extent, is
associated with the Air Cadet Lea;ue, and therefore
with the R.C.A.F. Its purpose is to acnuaint and
instruct the youth of Canada in the operation of
motor less aircraft.
Air Industries and Transport Association is an
Industry group composed of both naiufacturers and
operators, Its main purpose is the solution of
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common industry problems and to act as an industry
liaison i:ith the various branches of the Canadian
QoverrLnant.
4
(b) Obviously, all the Luoartmcnts and a?antics of the
Federal Government came into being by reason of
acts of Parlianant, and some of than many years ago.
The newest ;;ov:rnmr,ntal ag.ncy is the Air Transport
Board which was brought into being when the karonautics
Act was anended in 19h4. The National lasearch
Council was also created by an act of Parliament
and was established just after :iorld I
air Cade L,a'ue was farmed in 1941. It was
authorized in Novimbor 191iO rsi -ie-.:ns of an Ordor
in Council, and was ;-ranted a ':onirion charter on
April 9, 1941.
o? al Canadian Flying Clubs :association was
established about twenty years a;;o and operates
under a Dominion charter,
:,oaring Association of Canada did not come into
existence until the spring o -1944-, It also
operates under a Dominion charter.
Air Industries and Transport Association was
formed in 1934. t is a priva~~ association,
unincorporated, and therefore does not op=rate
under a Dominion or Provincial charter.
(c) The establishment of civil air agencies in
Canada has followed a fairly lo,ical pattern,
with one important exception. The .'inistsr
in Charge of Civil Aviation, is IIr. C.D. Howe
to was formerly Minister of !'ransrort, but for
the last three or four years has been Minister
of 3econstruction and Supply. Since :?:r. Howe
is a very strong figure in the Canadian Government,
he was powerful enough to take the civil aviation
establish-ent of 'the ',en1rL^:nt of ' raasnort, as
yell as the Air transport 1.card, .,dth him :;lien he
want to the I:epartmont of :'reconstruction and Supply.
That has created an anomolous situation and the
iaputy :5.inist4r of 7r nsport reports. to the Minister
of Transport on all matters except aviation, on
which he reports Lo the :.sinister of ;?aconstraction
and Supply who, for such purposes is referred to
as the :'inister in Charge of Civil Aviation. The
Air Transport Hoard, which is semi independent,
reports directly to Lr. 'lowe.
;.tr. Howe has always had a great p::rsonal interest
in civil aviation, and over since he first became
a member of :.tr. King's Government. Ile has been
largely instrumental in the creation of Trans-.
Canada Air Lines and also in the development of
all national and international civil aviation
policies during the past ten years, As a matter
of fact,, Mr. Hove is civil aviation in Canada, and
ho has powers which are much broader than anything
held by any civil aviation official of our
Government.
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Originally, what is now the Civil Aviation
f: i.vision of the i;epartment of Transport was a _
Branch of the._-~partnent of National ;?efense,
Ho?:ever, in 1936, :,hen civil aviation was
com,,encing to be well established, parti.cul-rly
in the Canadian Northrcest, and when serious
consideration was being given to creating a
transcontinental air route,, it was found. tht the
civilian problons confronting tin Civil itrench
were beconinpg so i:reat as to Justify a switch
from the military to a strictly civilian
depart^ent o.1 the Gov' rnnento It .,.,as then that
the :'enart^.ent of Transport was created with
civil aviation as one of its functions and no
change, except as noted above, has taken place.
since that time.
C
So far as is known, there has n wer been any serious
public criticism of the aviation set-up of the Canadian
Government except that which, is directed against 1',r,
Horsey his policies, and the power which he exercises
over civil aviation in Canada. Public'opinion in
Canada is not well informed on civil aviation matters,
'. fro 1loi:e's political opponents, namely, the Progressive
Conservative Party and the CoC.F, Party, are not only
uninformed, have no civil aviation program of their own,,
or are split within their owq groups as to what policies
should be followed. The Progressive Conservatives, are
the largest minority party and' while they are opposed
in general to Government ownership and to the type of
broad powers which Mr. Howe wields, they lack direction
and cohesion, with the result that their opposition
is completely ineffectual, The C,C.F. Party, which
is ctaite small, has a program which calls for the
complete nationalization of all air transportation
in CCanada, The. Liberal Government has stolen at
least sons of the C.C.F. thunder by the creation of a
Govarnnont owned chosen instrument.
(a) The large aviation interests. appear, on the
surface at least., to be satisfied with the
present Government policies and the way in
-which the Jovernent agencies function, The
snaller aviation enterprises are so widely
scattered and so menerally lacking in funds
that most of them are not even nenbers of the Air.
'T'ransport Association,' which does engage, once in a
while, in a mild sort of lobbying to promote
aviation.
(b) Competitive forms of transportation iii. Canada.
mean primarily the railroads, and both of these
own airline subsidiaries. There has been a.
conflict of interest between the Government owned
chosen instrument and Canadian Pacific Ur Lines,
This arose in 191414 when the Government declared
its policy that T.C.A. would en?a;e in. all mainline
and international operations. Canadian Pacific
Air Lines, through its managements declared publicly
that it had every intention of 'articipating in
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international operations, and that it would fi;;ht
the Government on this issue? The ,9ov,~rnment
thereupon passed a l,,; re;uiring that the
railroads divest thgmselv.3s of airline o::nership
within a specified priod. after the termination
of the war, while this had no effect on T,C,A,,
except as a paper transaction, it was vital to
Canadian Pacific, particularly since the Government
announced that 'it intended to break up that carrier
into several small operating companies, It is
reasonably certain that the =overnnent was not
anxious to carry out this polio*, but it did use
it as a club to beat Canadian Pacific into sub-
miscion to the Govern amt's pre :ram, which was
finally accomplished in the: sprint; of 19x7, _-'t
that time a conpl?tely now mama ement, acceptable
to the L:anadian Government, took over the operations
of Canadian Pacific nir Lines, Since then., on
the surface at loast,'rel:ttions have been cordial,
although there is some reason to believe that C,P.A.
has not yet coripletely given up hope o' securing
international and mainline routes,
(c) The attitude of the political parties has already
been discussed earlier in this paragraph.
(d) There has never been any public expression on the
part of the armed forces that the. other agencies
of the Government are not fulfilling a useful
function efficiently, and in the public interest,
Since, by its very composition, the Canadian
Joverrr ent is a :cell knit unit and one D-.-apart-
ment does not take action to which another
interested agency is opposed, it is safe to assume
that the armed forces are in agreement with the
Government?s general program and- conduct since
they have a voice in its determination.
(e) The Canadian public is woefully uninformed on
civil aviation matters and policy. It is but
seldom that there 'is even any -editorial comment
on this subject. The most air minded nn;soaper
in Canada,, the 'ontreal Janette is pkrha_ps the
dnly vocal instrument in the country which
constantly ;;oes on record as being opposed to
the Qovernment?s -:hole civil aviation policy.
There are no indications that the Gazette9s
one man crusade is bearing any frii t,
4. There is little overlapping or duplication in the
.Canadian Government, largely because it is a small
and relatively closely integrated organization.
Occasionally, there is some overlapping, for example,
between the Privy Council and the ::epart.ment of ') ternal
Affairs. This is due primarily to the fact that Lr,
Hose is vary close to the Privy Council, whereas he is
rather remote from the Department of xternal Affairs.
Usually those two agencies keep each other well informed
and up to dater with ':xternal Affairs adapting itself
on civil aviation matters: to :'r, Ho:^rets decisions. If
there is any conflict, and this applies also to all other
agencies handling civil aviation, it is resolved at the
Cabinet level.
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5, So far as is 'norm there is no consideration bein;;
t'iven at pre Sent to abolishing, reor Snizing, or
combining existing ag-:ncias or creating n3w Ones.
C. :OC;, UR 3 Z) i 7;U:.'TIO S.
1, Air 3outes.
(a) The sir Transport Hoard, after hearings awnsds
air routes to designated carriers in accordance
with the terms of the ` .aronautics Act, as amended.
Decis-ens of the board must be approved by the
rinister in charge of Civil .aviation.
(b) In general, public convenience and necessity, and
fitness, willingness and ability are the viding
principles which determine the granting of a route
to a particular carrier. In the case of all
mainline and internati'?cal routes these are awarded,
in almost a routine and roforma manner, to the
Government?s chosen instrument, Trans-=Canada Air
Lines, and public convenience and necessity are
presumed to exist. Other Canadian scheduled and
non-scheduled operators must show public convenience
and necessity, accept that the Board has porter to
waive this shoing in the case of certain non
scheduled m .ra+,ors, provided they satisfy the
'oard that the proposed com-,rcial air s=.rvice
vrould be in the public intorest. Foreign air
carriers nay operate into Canada provided a
? bilateral a;;ree?rent e:d sts between Canada and the
carriers' respective country setting forth a
s?3cified route, and provided also that the
carrier has been designated by its ,;overnment
to operate the route and that it has applied,
through diplomatic channels, to the Air Transport
Board for a license. In such cases, the existence
of a bilateral agreement presupposes public
convenience and necessity and the carrier is
required merely to show that it is owned and
controlled by nationals of the designating country
and that it is fit, willing and able to perform
the service.
(c) The carrier must abide by the terms of its license.
In general, these specify routes to be operated,
the type of service to be performed and the duration
of the license. The license must conform to the
provisions of the Aeronr:utics Act and to such rules,
regulations, ?tco issued there under. It must
obtain an operating certificate from the Uepartnent
of Transport .;ithout which it cannot corn-ence the
service, It must file schedules with the :ioard,
as well as any subsequent amendments thereto, and
also its tariffs and charges, The Board has the
right to raj act these if they are considered to be
unjust or.unreas enable or if they are unduly
discriminatory, pr:fer:ntial or prejudicial. In
general, licenses are not transferable and amendments
may be made only by way of written 3ndorserlents,
duly signed and scaled by the Board, All licenses
are required to provide security, by insurance,
bonds or otheruiso to the satisfaction of the Board,
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respecting liability to passengers and risks of _
public liability and prop:rty'damage,
(d) :accent ,with resnect to main line and international
routes, carriers''arc flee to apply for any
scheduled route or to operate non-scheduled services
from any particular base,
(e) 14ev, routes are established, when they are of a
main line or international nature, by consulatation
and agreement between Transa.anada Air Lines and
the Canadian Government, Other routes,, and non-
schedulad operations, are generally left to the
initiative of the carrier,
New routes are not proposed by the 3ovarnment,
except in case of main line and international
services, Since these are reserved to Trans-
Canada Lines, no other carriers may aplly,
Competition is not permitted over identical or
similar routes, nor are non-scheduled operators
permitted to operate to'two or more points on a
scheduled route,
The Aeronautics Act provides that, -,here in the
opinion of the Isoard a carrier has violated any
of'the conditions attached to its license the
Board may cancel or suspend the license. Any
air carrier w=hose license has been cancelled or
suspended may appeal to the ...inister, The Board
also has powers to suspend, cancel or amend any
license or any part thereof where in the opinion
of, the Board, public convenience and nacessi.ty
so ra^ui.res,
2, Rates,
(a) Under the tern -r
ff s of the :'aonautics Act, and
subject to the approval of the Governor in
Council, the "oard may make regulations
respecting traffic, tolls and tariffs, and
'rovidi.ng for the disallowance or suspension
of arlr .tariff by the ':oard, the substitution by
the licensee o a tariff satisfactory to the Board
or the prescription by the Board of other tolls
in lieu of the tolls so disallowed," In other
words, the Hoard has very broad po.nrnrs with
regard to the determination of tolls and tariffs,
although their original cre:jtion is left'to the
carriers,
(b) Neither the Aeronautics Act nor the Board's
regulations respecting comanrcial air services
are specific as to the bases on which tolls and
charges shall be deterimined. The regulations
say: "The Board nay determine and prescribe what
are just and reasonable, individual or joint
tolls, or may prescribe what is the maximum or
minimum, or maximum and minimum toll to be charged,
and -what individual or joint classification,
rule, regulation, terris and conditions of carriage,
or practice shall pr:wail in respect of the services
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 performed-or to be performed by air carriers,"
In view of these broad powers it'may be pre-
sumed that economic, competitive, political
and social considerations all enter into the
determination of rates and charges, and as they
are reviewed or finally established by the Board,
(c) ;bile in the first instance rates may be
determined by the carrier, they must be filed
'pith the Board and, so long as they are deemed
by the Board to be just and reasonable and not
discriminatory and, so long as they conform
to the Board's regulations, they will be
approved by the Board in the light of the
economic and other factors involved. In other
words, the Board, while it has. broad powers,
does not fix the rate in most instances,
(d) Under the Board's regulations respecting com-
mercial air services, discrimin.,itory rates of any
kind are prohibited,
Sa?etY,
(a) The. Department of Transport, in accordance with
the Aeronautics Act, issues Air Regulations which
govern and control aircraft operations, including
safety requirements, These regulations are
enforced by means of field inspectors and the Royal
Canadian Mounted Police, who are familiar with the
regulations,
(b) The Air Regulations, which follow very closely
similar regulations of our. Civil Aeronautics
Administration, are believed to be adequate in
the light of present standards and practices,
While they are competently enforced this can be
cone only by means of spot checking in view of
the large size of, the country, the small and
scattered population, and the limited number of
enforcement officers,
(c) Safety regulations are enforced imno n4-0 It
4. Inspection,
(a) No aircraft may be flown in Canada unless it has
been registered a ith the Cepartront of Transport.
It cannot be registered until it is certified as
airworthy by the Minister in charge of Civil
Aviation, The Department of Transport inspects
and licenses all equipment, examines and licenses
all operating personnel and investigates all
accidents in accordance with the Air iegulations,
As noted above, these re,lalations conform to, or
are identical with those issued by the U. S. Civil
Aeronautics Administration,
(b) The regulations are believed to be adequate in
the light of present experience and established
practice, and they are fairly and adequately
enforced by the Department of Transport.
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 (c) Licenses may be revoked or suspended and,
in the case of flagrant or repeated
violations the individual may be arrested
and prosecuted. Specifically, the Aeronautics
Act states: "Any person guilty of violating
such regulations shall be liable, on summary
convictions to a fine not exceeding ,4,1,000 or
to imprisonment for a term not exceeding six
months or to both fine and imprisonmant.". In
such cases, cancellation or suspesnion of the
license would be automatico
5, AiTpcrts and Comr;mnications.
(a) Regulations governing the use of airports are
issued by the Department of Transport in .
accordance with the terms of the Aeronautics
Act as supplemented by the Air leguLitions of
1938, amended. The regulations, in general,
follow those in force in the United States.
(b) The Dominion Government, through the Department
of Transport, operates all main line airports.
There is one known exception., viz., the city of
Edmonton operatesits own airport which it has
taken over from the Department of Transport.
Some airports, particularly along the Northwest
Staging Route, are under the control of the Royal-
Canadian Air Force, although they are used for
some civil air purposes, principally by Canadian
Pacific Air Lines. Smaller airports are sometimes
operated by the municipalities, or by the carriers
themselves. -
(c), Canadian procedures with regard to communications
follow established international practice and
conform to those in effect in the United States.
(d) The communication system is operated by the
Radio Division of the Department of Transport.
6. Reports and Forms.
(a) The Air Transport Board requires air carriers to
& file with the board returns with respect to their
(b) capital, traffic, equipment, working expenditures
and any other matters with relation to the oparav
tions of commercial air services. All scheduled
air carriers submit such detailed reports monthly
aild annually. These reports are studied and evaluated
and are published monthly by the Dominion Bureau of
Statistics. Nonscheduled operators, because of
the special conditions which surround this type of
operation, report to the Board on a. less frequent
basis. Their reports are consolidated and
published by the Dominion Bureau of Statistics in
a monthly sum total. None of these reports are
published in detail, nor is the material which
any of the carriers file with the Air Transport
Board open for public inspection. It is not
believed that these reports play too great a part
in administering civil air policy.
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They have been established so recently that
they can have had no great effect in the granting
of direct financial aid, but this is due largely
to the fact that most scheduled operators do not
wish to be dependent on. the whim of Parliament
for a yearly vote of a direct subsidy. Neither
do the reports so far play any great part in
assuring adequacy of service,
(c) Both the Air Cadet League and the Royal Canadian
Flying Clubs Association hold annual meetings
at v+h ich their annual reports are made public,
The Government usually sends observers to these
meetings and., where it is possible to do sow
lends encouragement to the improvement of
education and standards, .
(d) The National Research Council publishes,an annual
report but since this is a Government agency it
is a case of Government reporting or, one of its
own activities*
(f) and (g), (h), (i), (j), The Department of Tramp ort
is responsible for all matters under these headings,
As already noted, its regul:~t:ions.are closely
patterned on those in force in the United States,
D. GBN.IRAL 3VALU;'.TICN;
1, Generally speaking, the Government?s civil air
organizations, policies and rules of procedures are
considered to be sound, honestly administered and fairly
well adapted to the capacities, aims and requirements
.of the country's commerce, security and industry, There
is some difference of opinion as to whether Government
rules of procedure are progressive enough and, in view
of the favored special position of Trans--Canada Air
Lines, they may not always be regarded as strictly
equitable, As indicated earlier., the Canadians follow
a middle of the road policy with regard to civil aviation,
That is to say they have both Government ownership and
private enterprise, The middle course never satisfies
the extreme right or the extreme left, and so there are
some who criticize the Government for having gone to far,
and others for not having gone far enough, There can
be no question, however, but that the. average Canadian,
so far as he is aware or interested, is satisfied that
present policies and organization meet the Dominion?s
requirements,
Most Government bureaus in Canada are understaffed.
Certainly the Department of Transport and Air Transport
Board could use more field personnel. Budgetary
restrictions., however, do not permit this, In addition,
most of the scheduled operators vould like to, see
,Government assistance in the form of mail pay, but the
Post Office Department objects to being used as a
subsiclortance, the airlines
determine standards of operation and implement these
determinations.
The Government, largely due to the civil mvar, is unable
to appropriate funds for the development and expansion
of the scheduled carriers, and hence has not been able
to develop a broad program of promotion, development
and expansion of scheduled air transport. Scheduled
air transport in China is limited to trio carriers, the
China National Aviation Corporation and the Central
Air Transport Corporation. The China National Aviation
Corporation is 80;s government-owned with a 20% partici-
pation by the United States carrier, Pan American Air-
nrays. The Central Air Transport Corporation is under-
stood to be wholly owned by the Chinese Government.
Recently the ::tinistry of Communications has actively
sup)orted the civil airlines in their requests to
other government agencies for sufficient foreign
exchange to procure essential maintenance equipment
and for increased allocations of gasoline. While the
Ministry has been able to influence other government
agencies to allocate to the civil airlines urgently
required foreign exchange and gasoline, oil, etc., to
maintain minimum operations, the needs of civil avia-
tion can generally be said to be subordinate to govern-
ment requirements for the prosecution of the civil war.
(b) The Government dove not promote, nor in any manner
support the development of non-scheduled air transport
services. On the contrary, it would appear that the
Chinese Government will not permit operations of this
types reserving all carriage for the trio scheduled
operators. An exception to this is the China National
Relief and Rdhabilitation Air Transport Company, largely
financed by UNRRA-C'cat,A, vihich is permitted to carry
revenue passengers and cargo on its return trips from
inland points following inland movement of relief
cargoes.
'chile there is no Tarr in China which prohibits private
flyi.ng, the :Xinistry of Communications has not thus
far approved any applications for permission to fly
private aircraft. The newly formed Civil Aeronautics
Administration has not yet drafted regulations to
control private flying or established a functioning
division -:Inch could examine and license private
pilots am' planes and regulate private flying. The
Chinese Air Force has in the past vigorously op,)osed
private flyin-. Col. Tai, Administrator of the Civil
Aeronautics Administration, is now engaged in draft-
inG a regulation which will permit and control private
flying. He plans to establish flying clubs under the
direct supervision and control of the Civil Aeronautics
Administration. While a Chinese citizen, under Col. Tai's
_~ltAFIDEUTI '
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proposal, c6uld arm a private personal plane, he mould
have to malce it available to a Civil Aeronautics
Administration club for' the use of all of its ne:cbers.
Col. Tai has indicated dissatisfaction ::nth this
ap>roach to the establishment of private fly.In`- T:ithin
China, but has stated that due to the civil war and
the attonc:" ._, unsatisfactory economic conditions, he
would have to settle for "what in could get", indica-
tin;; that under his proposals, private flyi.nr would at
least cot a limited start in China.
(d) There are believed to be.tuo small aircraft plants in
China, in T hich the Chinese Government is manufacturing
its a,-.n training .lancs for military _>urposos. These
planes are constructed under the supervision of the
Bureau of ;ircraft Industries of the Chinese Air Force.
The first plant, at Kunrsinc;, has thus far produced one
prototype hT-6under a license acquired from Boeing
Aircraft. In another plant, located in Formosa, China
expects to produce a-3oeing trainer plane by late
November. The aircraft produced at these plants Trill
be used for military purposes.
(g) The training of pilots and other technicians is largely
conducted by the Chinese Air Forces assisted by the
United States Army Advisory Group. Practically all of
the Captains flying planes on the civil airlines are
foreifners (A.meric ns or Canadians). Native Chinese
fly as co-pilots. The Chinese technicians of Chinese
National Aviation Corporation and Central Air Trans-
port Corporation, the major Chinese civil carriers, are
supervised by Americans. The Government does not
directly supervise the training of pilots or other
tecluiicians for civil pursuits, nor does it directly
sponsor civil aviation training programs. l:o grants
are believed to be made to foreigners.
(h) China does not export. aeronautical equipment, and
imports practically all of its civil airline equipment
from the United States. Duo to the extensive require-
ments of the military, it is only T.'ith considerable
difficulty that the civil airlines are able to obtain
sufficient foreign exchange from government sources
to import essential maintenance requirements.
(i) China has not developed a long-range plan for con-
struction of essential airports. Practically all of
the desirable airports in China are controlled by the
Chinese Air Force. The Civil Aeronautics Administra-
tion, horevcr, ;.ith limited funds, has been able to
construct a stop-gap international airport at Shanghai..
Recently- there has been some evidence' that the Chinese
Air Force Till relax its control of c..rtai.n airports
and that the Goverrunont may make available to the
Chinese Civil Aeronautics Administration sufficient
funds to reconstruct these airports and render them
suitable for civil operations.
CON r1DENTIAL
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 The air navigation facilities of the country arc inade-
quate to moot its present needs. ChLtse iational
Aviation Corporation, Central Air Transport Corporation,
C:.ank :sir Transport, and the Chinese Air Force all have
their mm navigation -facilities and while the Civil
Aeronautics Acmi.nistration has t?ttempted to coordinate
the activities of the agencies o crat nr these facili-
ties an,, establish a nct:orl, under its control, clue to
lack of funds and insufficient co::ipetent personnel it
has been unsuccessful.
3. (a) The t:o domestic scheduled air carriers Tire largely
armed by tin (Iovernment. The Central Air Transport
Corporation is urrierstood to be 100 ' C?overn.~ent .):,fined,
and the Chinese national Aviation Cor:cmation is 30'
Government Mmed. The United :;tacos carrier, Pan
American A'dmmys, arms 20:: of the stock of the Chinos,:
flational Aviation Corporation. It is thus apparent
that govern nit annership is favored, while foreign
rticipation is permitted. The non-scheduiled relief
carrier, C', 1,_-. Air Transport Corporation has bee
financed trio-thirds by U TL^ .-Ci R and one-third by
;rivate capital.
It is a matter of record that the Great China Aviation
Corporation, r.hich Purchased equi;r ;ent rdth r:'rLich to
start scheduled operations in Chem, and. received a
license tin . anistry of Ca.viunications on October
1, 191j5, to omr;.te scheduled services, was not per-
mitted to initiate operations. The permit r:hi.ch it had
obtained from the ; lnistry of Co: r :unications was sif se-
quontly declared null and void by the Executive Yuan
without explanation. it r:ould thus appear ;:hat China
viii], not pomit, at least for tine present, substantial
private ornership of scheduled civil air carriers.
(b) The Government, through the Bureau of ,Urcraft Industry
of the Chinese Air forces, arms the two small aircraft
man.ifacturinr plants which are known to exist. Duo to
lack of natural resources and skilled pcrsonnel -
supervisory, administrative and technical - China u ill
probably find it difficult to attract private capital
and "knor-how" to manufacture aircraft hem.
(c) The competition botpen the two national carriers is as
severe as could be expected bet::ten private air lines.
Facilities, equi.ment nd stations are duplicated.
tlrrourhout the country.
The Government endeavors to protect the national airlines.
against competition fro::, foreign carriers (see 3. (h)').
The only imam direct subsidy extended toathe national
airlines has boon granted to the Central Transport
Corporation in the operations of its route from L-ncho:r
to Tilu:a. The Go ernnont was forced to subsidize this
h-
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operation for political as ~.?cll as econo::ic masons
because contact by air rrith this northern area must
be rutai.nc:, in the absence of an alternative mode
of transportation. As all Gasoline used on this
route north of. Lanchrovr must be florin in, the route
could not be o- rated without the subsidy.
IIo subsidy is ;errn:rn to be m tended to aircraft manu-
facturers.
Tins far, C: 50,000,000,000 has been appropriated by
the Civil Aeronautics Administration for its use. the
major portion of which was cxpendo:, in the inalrove:annt
of one international airport at Sh