Foreign Relations of the United States, 1952–1954, Africa and South Asia, Volume XI, Part 2

611.9194/12–3054

Memorandum of Conversation, by David H. Ernst of the Aviation Policy Staff¹

confidential

[Washington,] December 31, 1954.

Subject:

• United States–India Air Transport Problem

Participants:

• Messrs. Denny, Adams and Ryan—Members of Civil Aeronautics Board
• Messrs. Peck, Watson, Sawyer, Davis, Park, Wanner and Mrs. Hillyer—Civil Aeronautics Board Staff Miss Colclaser, Messrs. Barringer, Bolster, White and
• Ernst—Department of State
• Mr. Tom Taylor—Trans-World Airlines
• Mr. Russell Adams—Pan American World Airways
• Mr. Stewart Tipton—Air Transport Association

The above named Department of State and CAB officials met to consider the subject problem in the light of New Delhi’s telegram 898, December 30 containing the reaction and counterproposals of India to the most recent United States proposals for resolving United States–India difficulties within the framework of the 1946 Indo-United States Air Transport Agreement.

Mr. Peck recited the substance of telegram 898, pointing out the substantial differences between the United States and India positions. Mr. Denny asked if the Department of State recommended acceptance of the Indian position. Mr. Bolster responded in the negative stating that the Department considered the compromise of principle involved to be too great. Mr. Bolster suggested that the new information received from New Delhi should be discussed with the carriers. He added that as a tentative personal proposal he would suggest that (1) the present bilateral terminate, (2) the GOI be requested to issue permits of indefinite duration to PAA and TWA providing for two flights a week each, (3) PanAm would serve one point in India and TWA would limit its flights beyond Bombay to Ceylon to one a week. (4) There would be no other restrictions. (5) Failing agreement of the GOI to issue such permits, United States carriers would cease commercial operations to India.

Mr. Peck opined that such a suggestion would probably not work out and Mr. Bolster indicated he did not guarantee its success.

CAB Member Joseph Adams spoke at length to the point that the United States carriers should cut back immediately. He then precipitated a discussion on the question of whether the Indo-United States Air Agreement was a bilateral agreement in fact.

CAB Member Ryan asked if the State Department objected to overflight. Mr. Bolster replied that the Department would prefer traffic stops but not at an excessive cost.

Note: At this point Messrs. Tipton, R. B. Adams and Taylor joined the meeting.

After Mr. Peck had again summarized the substance of telegram 898, Mr. Tipton stated that acceptance of the Indian position would mean support of predetermination based upon the unilateral decision of the country flown into. CAB Member Adams again precipitated discussion of his point that the agreement was not a true bilateral because India did not have a service to the United States.

Mr. Taylor said he saw nothing new in this information with the exception of the condition that PAA reduce its traffic stops.

Mr. Russell Adams stated that this (Indian condition) constituted “tough medicine” and that he would have to ask Mr. Trippe’s views before giving PanAm’s position on the matter. He stated as his own view that the United States should tie in the present $70 million aid to India program with this air transport problem.

CAB Member Adams asked on the assumption that the bilateral goes out of effect on January 15, if the carriers prefer to overfly or should further efforts be made to secure some agreement?

CAB Member Ryan stated that United States is faced with an ultimatum and that if it accepted the Indian conditions it would be junking the Bermuda policy. Mr. Denny gave it his view that the alternative may be termination and an effort to get permits for the carriers to continue operations. Mr. Tipton said that as there was such a substantial policy problem involved that as the interests of other United States carriers would have to be taken into consideration, he could not give his view until discussions with other carriers had been held. However, he thought that there were three alternatives; (1) not to accept the GOI position and to restate the United States position; (2) to accept the GOI position; and (3) to work out some type of a modus vivendi.

Mr. Bolster made the following proposal which he said was his personal suggestion:

1. Restate our position to the GOI.

2. If that is unacceptable, ask GOI to issue permits to TWA and PAA for two flights a week each. Pan American to serve but one point in India and that be chosen by PanAm and TWA to operate but one Bombay flight onward to Ceylon. There would be no other restriction. The existing bilateral would terminate.

3. If this is not acceptable to the GOI, the United States carriers would overfly India with technical stops.

Mr. Bolster indicated that there was no assurance of a good chance of acceptance of this proposal. Mr. Barringer indicated his agreement with Mr. Bolster’s suggestion noting, however, that this was not official and that the problem had to be considered on the highest levels in the Department of State.

Mr. Taylor pointed out that this would be the first situation wherein two United States carriers would be involved in operations to a country with which there was no bilateral. He stressed that under the circumstances there should be no individual bargaining by either carrier with the foreign government and that both carriers must be guided by instructions from the United States Government.

Mr. Russell Adams agreed that there should be no individual bargaining in India.

CAB Member Adams said that the United States carriers should have voluntarily cut back their services two years ago because capacity being offered was unjustified. In response, Mr. Russell Adams stated that he thought that under the Bermuda principles four flights per week per carrier could be supported and, furthermore, that he could prove it. In answer to an inquiry, Mr. Taylor said that TWA was not willing that the government should go any further in making concessions to India. He said that his comments during the meeting were restricted to apply to efforts made to preserve the bilateral and did not necessarily apply in other circumstances. He indicated that TWA’s minimum service to Ceylon should be two flights weekly, otherwise TWA would be forced to terminate operations to Colombo.

(In view of the necessity for the ATA and PAA representatives to refer the question to their principals, it was decided to withhold a further communication to New Delhi pending a resumption of this meeting on January 3 at 11:00 at which time full carrier views would be forthcoming.)

1. This memorandum was drafted on Feb. 4, 1955.