The Civil Aeronautics Board yesterday invited U.S. airlines to apply within 10 days for the exclusive right to begin regularly scheduled airline service between the United States and China for the first time since 1949.
While the CAB noted that no final agreement with the Chinese has been reached, the potential accord it outlined yesterday indicates that the new pact is likely to be totally inconsistent with the much-heralded U.S. international aviation policy which stresses competition among airlines in services and fares with the minimum possible government interference.
That the agreement with the Chinese will fail to conform to U.S. policy is not totally unexpected, one aviation expert observed yesterday, since the Chinese have a planned economy, a predilection for control and an airline reasonably inexperienced in international travel.
The CAB said a "tentative understanding" has been reached on certain aspects of a potential future agreement: The initial route, to be operated by one U.S. airline and the Chinese-owned airline, will go from the U.S. cities of New York/San Francisco/Honolulu with an intermediate stop in Japan to the Chinese cities of Beijing/Shanghai.
First-class and economy fares will have to be approved by both goverments. Discount and promotional fares can be reduced by up to 30 percent without government approval but must be subject to various restrictions.
The agreement would limit the number of flights the two airlines could offer for the first three years of the agreement. At least two roundtrips a week during the first year will be permitted, the CAB said.
If the United States and China failed to reach agreement on a second route, then each country could designate an additional carrier to serve over the primary route about two years after the initiation of the first service.
U.S. and Chinese negotiators have been meeting on and off since April -- and are meeting again this week in Beijing -- in an attempt to hammer out a new bilateral agreement governing air services between the two countries that was suspended in 1949. At that time, Northwest Airlines and Pan Amercian World Airways had been serving China. Trans World Airlines, which held similar operating authority, wasn't using it.
In recent years, nearly a dozen airlines have told the CAB that they would like to serve China. But as it was outline yesterday, the agreement being considered -- if it requires an intermediate stop in Japan either as a legal or a practical requirement -- could restrict the new China services to U.S. airlines that currently have rights to fly to Japan. Such a limitation would sharply limit the field. TWA, for instance, has no such authority.
The board also said it hoped to reach a decision on the selection of an airline as soon as possible after an agreement is reached and currently plans to do so through "expedited non-oral hearing procedures." Because an international route is involved, the president's approval also is required.