WEEKLY INTELLIGENCE SUMMARY NO. 38

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A005000010038-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 5
• Document Creation Date: December 27, 2016
• Document Release Date: April 24, 2013
• Sequence Number: 38
• Publication Date: November 16, 1948
• Content Type: REPORT

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OFFICE OF REPORTS ANA ESTItdATES
TRANSPORTATIOli GROUP
Czechoslovak civil air operations to the Near East may soon be
cra:tailed or even blocked entirely., Lebanon and Egypt are threatening
to cancel landing rights now enjoyed by the Czoohoslovak national air-
line (CSA), unless Czechoslovakia suspends its flights to Israel<
Iraq has alrendy terminated such rights For CSA, and Greece may even-
tually prohibit all CSA flights through Athens?to the Near East,
(Item No, 1, C)
A four-year plan ?or the development of Italian civil nviation,
-with direct financial assistence from ECA, is being aonaidored by the
Italiatt Government, The program includes projects for improving
Italian airport facilities, establishing schools for training air crews,
and rehabilitating the Italian aviation industry; it would seek ECA
assistance totaling 160 billion lfr? ($280 million), (Item No. 2, C)
-- - The conclusion of a liberal civil air agreement between Argentina
~.""-hand the Netherlands does not indicate a retreat by Argentina from its
restrictive aviation policy, Argentina has consistently attempted to
limit the aommercinl rights of foreign airlines in its-territory and
will continue this policy except in specific instances where it is to
her advantage to disregard it, (Item No, 3, C)
Despite recent discussions, the Chinese cancellation of the Sino-
Soviet air agreement will stand unless now negotiations produce a
solution by September 1949, (Item No. 4, C)
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Despite the submiesioa of s formal note of protest by ~e
Austrian Governmont to Soviet authorities; and an implied threat to
plebe the matter before the Allied Council unless the Soviet claim ie
greatly reduced, the Austrian rolling stools issue remains unsolved.
(Item No. b, H)
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?~ SEAT `''
1. Czechoslovak civil air operations to the Near East may soon bo
curtailed or even blocked entirely. Probably as e'result of Czecho-
slovakia~s active-participation iri the air supply of Israeli fighting
forces, Iraq has oanaelled tkie'temporary landing rights granted the
Czechoslovak national airline at Baghdad. Lebanon has informed the
Czechoslovak Government that the agreement permitting CSA~a flights to
Beirut Grill be denounced unless Czechoslovak aircraft discontinue their
prosant flights to Israel. Egypt is also considering cancellation of
the provisional authorization permitting CSA~s flights to Cairo if CSA
continuos to serve Israel. Should CSA lose its landing rights at Beirut
and Cairo, its operations to the Noar East would be restricted to the
services From Athena to Istanbul and IIaifa. Even these schedules will
have to be cancelled if Greece carries out its expressed intention
(See TG Weakly Summary X38) to restrict progressively and eventually
rD O~all CSA flights through Athens to points in the Near East.
2. Afear plan for the develo went of Italian civil aviation,
with irec inancis~ aasi~ s~anoo From A, as on prepare y
Italian Ministry o? Defense-Aeronautics and is being considered by the
Italian Government. The program, covering the period 1948-1952, en-
aompasses four principal projects: (a) aonatruction of a now inter-
national airport near Roae; (b) reconstruction of #re Italian airport
network; (o) establishment of schools for training Italian air crones
end (d) rehabilitation of the Italian aviation industry to include
facilities for production of large long-range aircraft. Tne proposed
program would seek ECA assistance totaling approximately 160 billion
lire ($280 million). The existence of modern air facilities in Italy
would not only encourage the development o? Italian civil aviation,
thereby contributing trnrard Italian economic recovery, but would bo of
strategic value to the US and Western Povrera.
ECA might not accept the Italian program in its entirety. Tho
argument would bo raised that Italy~s aircraft industry cannot produce .
long-range four-engine transports in competition with US and other
foreign producers unless subsidized heavily. Furthermore, EGA may take
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the position that some of the projects envisaged, such ea the inter.
national airport, could be financed more appropriately through the
'International Civil Aviation Organization, of which Italy is an native
3. The conclusion of a liberal civil air 'a reomont between Argentina
and the Netherlands does not in icate a retreat y Argentias from its
. restrictive aviation policy. Argentina has cousistontly attempted to
limit the commercial rigk~ts of Foreign airlines in its territory and
Trill continuo this polioy except in spebific instances whore it ie to
her advantage to disregard it.
Tho agreement with the Dutoh, whiah eras signed in Buenos Aires on
29 October, contains none of the restrictions.proposed by the_Argentines
during intermittent aegotiationa over the past two years. (Sines the
Netherlands was unwilling to accapt restrictions, such as an arbitrary
division of traffic, the Dutch airline, SiLS, was forced to terminate in
}dontevideo the South Atlantic route which it inaugurated late in 1946,)
RIM is now granted direct and unrestricted acoesa to firenos'Airea and
will bo authorized to eatend its services to Santiago, Chile, after an
Argentine carrier has inaugurated service to Amsterdam.
Argentina hoe concluded aia non-restrictive agreements with ~ropean
oountrias during 1948. These apparent ooncesefo~ to amore .liberal
civil aviation policy, however, do not aotually indicate adoption of such
a policy by Argentina, but represent a compromise exacted by the hliropeaa
countries as 'the oriee of ouerating rights for Argentine airline services
4. Chinese delegate Liu, Foreign Affairs Commissioner for Sinkiang
Province, has stated on his return to Tihwa that no understanding was
reached at Alma Ata between Soviet and Chinese representatives regarding
the Sino-Soviet air agreement which covers the "joint" air operations in
Sinkiang. Liu asserts that he lacked authority to discuss terms with
the Soviet delegates and that the USSR desires to continue the conversa-
tions ih Moaao~. He emphasizes that the Chinese cancellation of the
Sine-Soviet air agreement will-stand unless now negotiations produce s ~ i
solution by September 1949. An evaluation of Liu~s version, which is t
open to doubt, appears somewhat academic, booause the political prospects ~
of the Nationalist Government suggest that the USSR will probably be able
to continue air gaeratione_~n'Sinlciang, regardless of the status of the
air agreement. ~ STAT,
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SURFACE TRANSPORTATION'
5. The Austrian Gooernment has submitted a formal note of retest
to Soviet authorities in regard the ovie requisition of Austrian
rolling stock'(See TG V1`eekly No. 36). Tho note carries an implied
threat to place the matter before the Allisd Council unless the USSR
greatly reduces its claims, (Austria requests a reduction of about
5,000 care in the Soviet d~nand for 540 locomotives end 5,575 rail- '.
Tray oars.) Deapito the Austrian note, the USSR has directed that,
psLding reooneidoration, the deliveries proceed as requested. ti9hilo
there are no indications that ~e bSSR will relinquish any of its
claim, it may have deliberately inflated the original figures. In this
case, it will eventually announoo its reductions with a show of
generosity. Oa the other hand, instead of offering a reduction, the
USSR may offer to sell the rolling stools back to Austria for hard cur-
rency. At the bast, however, the Austrian economy will be soverly
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