Airlines with designs on some of Braniff International's South American routes have begun marshaling their arguments, with the hope that the Civil Aeronautics Board might disapprove Braniff's proposal to let Pan American World Airways operate the routes for four years.
Both Air Florida and Eastern Airlines separately have told the CAB, which must approve the Braniff-Pan Am deal, that they were both ready, willing and able to begin service on some of Braniff's routes should Braniff stop serving them. "Is the government in the business of forking over the routes or seeing that service is maintained?" Air Florida President Eli Timoner asked in an interview.
The board has asked for initial public comments on the Braniff-Pan Am plan and any other pleadings by next Friday.
Meanwhile, the heads of Braniff and Pan Am made the rounds in Washington during the last two days, seeking support for their plan from key members of Congress, and the State and Transportation departments. They reportedly found some receptive audiences. Airline officials are not allowed to have any communications with members of the CAB on pending matters.
Under the proposal--being billed as a "joint operating agreement"--Pan Am would take over Braniff's extensive route network between six U.S. cities and Argentina, Bolivia, Brazil, Chile, Colombia, Equador, Panama and Peru, as well as their routes within South America. Braniff intends to keep its service to Venezuela. Pan Am currently flies to Argentina, Brazil, Chile, Panama, Uruguay and Venezuela, competing with Braniff on several routes.
Under the plan, Pan Am would pay cash-needy Braniff at least $30 million. "The check is in the mail" for the first $7 million, Braniff Chairman Howard D. Putnam said when the two airlines announced their proposal. At least while it seeks to regain its strength, Braniff also gets rid of once-lucrative routes that are now money-losers, partly because of the obsolete aircraft it is using, and a total of 2,300 employes.
Pan Am, which agreed to take on 800 of them--ground employes--as well as their South American facilities, is committed to give up the routes at the end of four years if Braniff wants them back and is in a position to take them back. For Pan Am, the agreement would provide additional revenues for little additional cost because it has underutilized aircraft and employes who have agreed to put in more hours for the same pay.
The staff of the CAB and others have raised some questions about whether the agency is legally able to approve the unusual route-leasing agreement and whether there are any anticompetitive implications in the arrangement. Both Braniff's Putnam and Pan Am Chairman C. Edward Acker contended in interviews that competition wouldn't be affected because the CAB could designate other carriers to serve the routes on which current dual-U.S. carrier service would be eliminated by the agreement. Grants of such route authority might have to be limited to four years, but a Pan Am official said that most grants of foreign-route authority are temporary now.
"Certain carriers are denied the opportunity to go in and pick the bones of a Braniff in case they do face a demise or in case they do have to pull out of these markets, but nobody is disadvantaged on any other basis," Acker said. "The people who are more advantaged are Braniff as a corporation and Braniff's employes. . . . These people are going to have a better shot at getting through this difficult time because of the cash infusion. So it protects jobs here."
Asked whether Braniff would be in a position to take the routes back in four years, Putnam replied, "No guarantee--but I can tell you, if we don't do it this way, we won't be around here in four years."