Airline Executives and Federal Regulation: Case Studies in American Enterprise from the Airmail Era to the Dawn of the Jet Age

By Whitelegg, Drew | The Journal of Transport History, September 2001 | Go to article overview

Airline Executives and Federal Regulation: Case Studies in American Enterprise from the Airmail Era to the Dawn of the Jet Age


Whitelegg, Drew, The Journal of Transport History


W. David Lewis (ed.), Airline Executives and Federal Regulation: case studies in American enterprise from the airmail era to the dawn of the jet age, Ohio State University Press, Columbus OH (2000), 379 pp., $60.00.

This book argues that the airline industry's development was determined by the individual characters of airline executives and their relationship with federal authorities, most obviously the Civil Aeronautics Board. Politics was pivotal, even for executives who ostensibly cared little for it. `Entrepreneurs may distrust government,' suggests Lewis, `but they will court its intervention if it suits their purposes to do so' (p. 38). This still bears relevance today, and the work is a timely contribution to a deregulation debate which is still going on in the airline (and other) transport industries.

There is a cross-section of essays on individual executives, ranging from those who worked happily with the CAB to those who were more hostile. They involve a mix of scale, from major airlines to regional operations and nonscheduled carriers. The list of contributors is impressive and includes William Leary, Roger Bilstein, George Hopkins and Lewis himself, all of whom are familiar to aviation historians. Additionally, each chapter closes with a useful bibliographical essay.

As Lewis argues, the CAB was one of the most powerful regulatory agencies in American history and its presence frames each of the chapters. William Trimble's discussion of George Hann examines the immediate pre-CAB period, focusing on the 1930 `spoils conference' at which Postmaster General Walter Folger Brown attempted to strengthen the position of established carriers, and thereby the industry itself. The 'conference' became a subsequent target of Franklin D. Roosevelt's Democratic administration in a series of moves that broke the relation between airlines and the US Post Office and led to the creation of the CAB in 1938. Hann, a major player in the formation of Transcontinental and Western Air (later TWA), harboured a sense of injustice against the early New Deal until the 1960s.

Roger Bilstein's analysis of C. R. Smith and American Airlines stresses the carrier's technologically pioneering role and especially in its introduction of the pathbreaking Douglas DC-3. This aircraft reduced airline reliance on mail subsidies and enabled companies to survive purely through flying passengers. Before the creation of the CAB, this made established airlines vulnerable to new start-up carriers and thus the institution of the federally led structure, which the CAB represented, essentially protected carriers like American Airlines. American courted Washington assiduously, establishing a permanent office there in 1942. Its relations with government were not always harmonious, however, particularly during the (abortive) merger talks with Eastern Airlines in the 1960s and the hearings on the southern transcontinental air route. There is also an interesting discussion of American's first, unsuccessful, foray into the overseas market.

Perhaps the closest association between airlines and federal bodies is provided by the example of Donald Nyrop and Northwest Airlines. Donna Corbett discusses Nyrop's move to the carrier after being CAB chairman, but claims he could `never truly leave Washington behind' (p. 125). While at the CAB Nyrop shared President Truman's safety concerns, an attitude he took with him to Northwest and which became one of that carrier's hallmarks. Part of this concern was directed at what Nyrop thought were the inefficiencies arising from federal subsidies. He thought that airlines should be self-sufficient, though some of his attempts to reduce costs at Northwest led him into conflict with labour unions. …

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