William O. Douglas

“ The Board has decided that it is appropriate at this time to institute a comprehensive review of the U.S. flag carrier route pattern between the United States and South America. The most recent extensive study of that route structure was undertaken in 1946, some 15 years ago. Since then considerable developments, hereinafter referred to, have taken place which affect these services and require the review here contemplated.
Three U.S. carriers are presently certificated to provide the major services to points in South America. Pan American World Airways, Inc. ”

“ Since the original establishment of the basic South America route structure, there have been basic changes in technology and patterns of service. Thus, in 1944, the range of aircraft was relatively limited and operational requirements, as well as economic considerations, required multiple stops on the long-haul service. Today, available aircraft can, and do, serve the most distant points on a nonstop basis. Of the relative attractiveness of nonstop to multi-stop service in comparable equipment there can be no question ”

“ Nor does it, as already noted, have jurisdiction over every antitrust violation by air carriers. But where the problem lies within the purview of the Board, as do questions of division of territories, the allocation of routes, and the affiliation of common carriers with air carriers, Congress must have intended to give it authority that was ample to deal with the evil at hand.
We need not now determine the ultimate scope of the Board's power to order divestiture under § 411. It seems clear that such power exists [17] at least with respect to the particular problems involved in this case. ”

“ This suit, which the Civil Aeronautics Board requested the Attorney General to institute, charged two major restraints of trade. First, it is charged that Pan American and Grace, each of whom owns 50% of the stock of Panagra, formed the latter under an agreement that Panagra would have the exclusive right to traffic along the west coast of South America free from Pan American competition and that Pan American was to be free from competition of Panagra in other areas in South America and between the Canal Zone and the United States. ”

“ The encouragement and development of an air-transportation system properly adapted to the present and future needs of the foreign and domestic commerce of the United States, of the Postal Service, and of the national defense;
' (b) The regulation of air transportation in such manner as to recognize and preserve the inherent advantages of, assure the highest degree of safety in, and foster sound economic conditions in, such transportation, and to improve the relations between, and coordinate transportation by, air carriers ”

“ It is suggested that the power of the Board to issue a 'cease and desist' order is not broad enough to include the power to compel divestiture and that in any event its power to do so under § 411 runs solely to air carriers, not to common carriers or other stockholders. We do not read the Act so restrictively. The Board has no power to award damages or to bring criminal prosecutions. ”

“ Moreover, on the civil side violations of antitrust laws other than those enumerated in the Act might be imagined. We, therefore, refuse to hold that there are no antitrust violations left to the Department of Justice to enforce. ”

“ The committee was of the opinion that it would be better to put in a general provision condemning unfair competition than to attempt to define the numerous unfair practices, such as local price cutting, interlocking directorates, and holding companies intended to restrain substantial competition.' S.Rep.No. ”

“ Similarly, changes have taken place in the competitive picture. Prior to the decision in the Latin America Case, supra, Pan American and Panagra operated in competition with three foreign air carriers. Today, 19 South American foreign air carriers are authorized to serve the United States-South America market. There has also been an increase in service within South America by local carriers. ”

“ Provided, That the Authority may by order relieve air carriers who are not directly engaged in the operation of aircraft in air transportation from the provisions of this Act to the extent and for such periods as may be in the public interest.' Whether there might be 'a reasonable basis in law' (National Labor Relations Board v. Hearst Publications, Inc., 322 U.S. 111, 131, 64 S.Ct. 851, 860, 88 L.Ed. 1170) for a Board conclusion that Grace is an 'air carrier' by reason of its negative control over Panagra is a matter on which we intimate no view. ”

“ Likewise, the power to order divestiture need not be explicitly included in the powers of an administrative agency to be part of its arsenal of authority, as we held only the other day in Gilbertville Trucking Co. ”

“ Pan American filed a notice of appeal in the Supreme Court on May 11, 1961.↑ The Attorney General had sought divestiture by both Grace and Pan American.↑ Pending certificate applications involving service between the United States and South America will be considered for consolidation upon appropriate request submitted within 20 days of the date of service of this order. Applications not moved for consolidation will be subject to dismissal for lack of prosecution. ”