Published in October 2015 issue

By David H. Stringer

At the end of World War II, thousands of American GIs flocked home to start postwar lives of peace and prosperity. Many of these veterans were pilots, courtesy of the governmentsponsored training programs that had minted enough aviators to meet the needs of the wartime military. A lot of these fliers now wanted to use their piloting skills to earn a living back home as civilians.

The scheduled, or ‘certificated’, airlines of the United States absorbed large numbers of these fly boys into their ranks as aircraft were returned from the military to commercial service, as larger postwar four-engine aircraft were being delivered, and as the new government-sanctioned feeder carriers were being established.

The certificated airlines were under the strict guidance of the CAB, the government agency created in 1938 to regulate US commercial air traffic. No certificated carrier could inaugurate service over a new route, terminate service at an unproductive station, or charge a lower fare than other airlines without the CAB’s permission. The Board’s control of the routes flown and rates charged was ironclad, but the benefits to the certificated carriers were bountiful. First of all, the Board controlled competition so there wouldn’t be a glut of available seats on one route and paucity on another. Also, certificated carriers had the blessing of the government to carry air mail, a steady source of income often accompanied by a subsidy for serving smaller cities that could not generate traffic sufficient to pay for the service provided.

But what about the pilots who could not be absorbed into the ranks of the nation’s certificated airlines?

In the US, the entrepreneurial spirit is always alive. If there is a loophole in the law, someone will find it, and, if there is a way of doing business that skirts regulations, it will be taken advantage of.

The CAB bestowed each of the regulated air carriers with a Certificate of Public Convenience and Necessity, a prized credential that ensured the company’s place in America’s airline network. The certificates were awarded only to companies that proved themselves ‘fit, willing and able’ to be part of America’s scheduled airline network.

But when the Board laid down the rules for issuing these certificates, it wisely realized there was also a need for additional air carriers, ones with limited operations that would have more flexibility to fill in the blanks left by the certificated airlines. The Board’s vision was one of fixed base operators (FBO’s) and small companies with one or two light aircraft that could offer charter or occasional services in markets not reached by the certificated carriers.

The CAB would grant exemptions to companies the role of which was to offer these irregular, infrequent services.

A loophole was born.

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To quote the Board’s own report: “New conditions created by World War II included postwar availability of surplus aircraft at distress prices or very low rentals, a large body of air-minded, trained personnel and a rising demand for air transportation services with which the certificated airlines were not yet able to keep pace.” The circumstances were ripe for the entrepreneurs.

To continue the Board’s assessment: “Numerous new operators of large equipment sprang into being and registered under the old regulation exempting carriers engaging only in irregular, infrequent service from the certification process, which the Act (Civil Aeronautics Act of 1938) had established to safeguard the sound development of the basic air transport system.”

Dozens of opportunists jumped through the loophole. The only requirement was that the service offered between airports be infrequent and irregular—in other words, non-scheduled.

For their outfits, these entrepreneurs chose names that they hoped would have public appeal: North American Skylines, Viking Air Transport, California Eastern Airways, and Caribbean Air Transport, to name just a few. Some monikers were not well thought out. After a few months of operation, the men behind Fireball Air Express wisely realized that the less-inflammatory Standard Air Lines would be a better name for their company.

War-surplus C-47s (DC-3s) were plentiful and even C-54s (DC-4s) were available in the marketplace of used military aircraft. The servicemen-turned-businessmen began to pool resources with their buddies and started buying some of these bargain-priced machines. Many of the pilot-entrepreneurs felt that they could make a go of it flying cargo, while others outfitted their second-hand fleets with standard passenger seats. A few used the bucket seats or bench-along-the-sidewall type seating that their former military aircraft came equipped with and offered basic transportation to those willing to pay.

The non-scheduled airline phenomenon attracted lots of attention among those in the field of commercial aviation, and the Civil Aeronautics Board found that it had an unanticipated problem on its hands. It hadn’t meant to create an opening for unregulated airlines, but here were former servicemen filling a need that the overburdened scheduled airlines could not meet. Customers were patronizing the non-skeds. Soon the scheduled carriers demanded that something be done to keep these interlopers off their turf.

The CAB had been created to bring order out of chaos. Now chaos was operating alongside order.

The CAB’s first attempt to put some structure in the situation was to recognize the existence of this new breed of air carrier and separate them from the smaller outfits that were operating under the intent of the 1938 rule. In 1946, all companies employing large transport aircraft in irregular service were informed they would be subjected to a safety inspection in order to obtain a letter of registration identifying them as an approved large irregular carrier. The letter of registration was not the Certificate of Public Convenience and Necessity issued to the scheduled airlines, but a document verifying that the company was registered with the CAB and in compliance with safety regulations. The Civil Aeronautics Administration (CAA), forerunner to the FAA, initiated the carrier examinations but did not have enough inspectors to accomplish the job quickly. Meanwhile, the non-skeds that were already operating in August 1946 were allowed to continue operating until the CAA could get around to inspecting them.

The non-skeds’ operations were primarily meant to be charter flights. Aircraft were often ‘chartered’ by a travel agency, owned by or associated with the carriers themselves, to offer flights between designated points. The ‘agency’ would advertise flights to distant destinations in local newspapers for prices that undercut those of the scheduled airlines. These ostensibly charter flights looked more like scheduled services.

The CAB also allowed a highly restricted, limited number of seats to be offered via regular sale to the public. The Board’s hope was that the problem of the non-skeds would resolve itself as they found their niche, which, hopefully, would not infringe upon the business of the certificated carriers. But the operators of the irregular airlines knew where the traffic was and they placed their aircraft into operation between New York and the West Coast via Chicago and other major cities; between New York and Miami; and from the mainland US across the Atlantic to San Juan, Puerto Rico, and eventually across the Pacific to Honolulu, Hawaii.

The general impression was that, for much of their custom, the large irregular carriers were like airborne jitneys or tramp steamers, flying around the country and picking up passengers and freight wherever they could find the business. This was certainly true of their transport of seasonal workers to and from Alaska each year in support of the fishing and canning industries.

Because they operated around the clock, generating revenue wherever and whenever they could, and because some of the financially strapped operators often arranged their arrival and departure from airports for the middle of the night, when no one would be around to collect landing fees, the unflattering sobriquet ‘fly-by-nights’ was applied to the whole class. It implied that these were companies that might be here today but gone tomorrow.

Many of them did operate like that. But others were professional, well-run organizations trying to do a good job of taking up the slack where the scheduled airlines left off. They operated with self-imposed strict rules for their employees and crews and followed good business principles, becoming well-respected enterprises admired by their customers and the public in general.

Among these, were Orvis M. Nelson’s Transocean Air Lines, which would receive worldwide acclaim for its services, and Dr. Ralph Cox’s United States Overseas Airlines (USOA). It must have been embarrassing for these companies to be lumped into the same category as outfits that, in their quest for a buck, paid little attention to maintenance, crew competency, crew rest, and aircraft loading procedures.

From the CAB’s perspective, it was becoming increasingly difficult to see the value of the large irregular carriers, aside from the excess lift they added to the service already offered by the scheduled airlines. The certificated airlines themselves were making it quite clear that they would be happy to see the nonscheduled carriers disappear altogether.

Appearing before an audience of air transport industry officials in late 1946, CAB chairman James M. Landis spoke about two new classifications of air carriers then emerging: the feeder lines, which would be evaluated, certificated, promoted and subsidized by the government, and the large irregular carriers, which were unregulated but seemed to be filling a need.

Landis said it would cost the American taxpayers about $2 million annually to support feeder service throughout the country. He felt the cost was worth it, but he warned that the irregulars “could not expect to have all the privileges of scheduled airlines without also shouldering their responsibilities.” It was an affirmation that, in the eyes of the CAB and the rest of the industry, the non-skeds were second class and not as good as the scheduled airlines.

The irregular carriers, though, were onto something. Despite an unenviable safety record and complaints about shoddy service, unfulfilled contracts and delayed or canceled flights, the non-skeds were proving their worth by carrying many people who did not match the demographic of the typical airline passenger of the day.

They were opening up the air travel market to a completely new group of consumers attracted by low fares.

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In the mid-1940s, the scheduled airlines of the US offered one class of service aboard their 21-passenger DC-3s and 40- to 48-passenger DC-4s. In most cases, complimentary meals were served and everyone enjoyed the same degree of attention, with no cabin divider. Since the expense of air travel made flying appear to be a wealthy person’s form of transportation, it went without saying that the level of service provided by the regulated carriers was First Class.

The non-skeds attracted customers by offering transportation at significantly lower fares. Their aircraft were outfitted with austere interiors and with few amenities, so the irregulars borrowed a term from the railroads, which offered a less expensive alternative to first class sleeping car accommodations in chair cars, or ‘coaches’. Also evoking the image of bus or ‘motor coach’ travel, usually the least expensive form of commercial passenger transport in any market, some of the non-scheduled carriers began referring to their low-priced service as ‘air coach’ operations. The term implied a more frugal way to fly—and the coach concept caught on.

Restricted as to the number of flights they could operate between any pair of cities in one month, many of the non-certificated carriers banded together under the umbrella of a single ‘agency’. These agencies were given names such as Safeway Skycoach, Super Skycoach and Air America’s Airlines (not to be confused with the later Air America of CIA fame).

If each of four different companies could operate only eight flights a month between two points, say Chicago and Los Angeles, then the four companies together could operate 32 flights. If only one flight operated per day with the same departure time each day, it would certainly resemble a regular scheduled service. Clueless passengers would just assume they were flying Super Skycoach when their aircraft and crews were actually being provided by Currey Air Transport or, perhaps, by Great Lakes Airlines.

The Cloud Coach Airlines Agency printed the word ‘agency’ in very small letters so that the customers would think that they were actually flying on a carrier calling itself Cloud Coach Airlines. The air coach concept was catching on as an affordable alternative for a large sector of the population.

At first, the CAB and the certificated airlines seemed to be perplexed and mildly annoyed by this new concept. The Board even stated that the non-skeds were better suited to develop this type of service than the scheduled airlines were.

But the growing popularity of the air coach phenomenon was not lost on some of those in the regulated part of the industry. With the CAB’s approval, on November 1, 1948, Capital Airlines became the first certificated carrier to operate an air coach flight within the continental US when it inaugurated Nighthawk Service between New York and Chicago via Pittsburgh. These no-frills flights operated in the middle of the night, with no meal service and only one stewardess. The aircraft were standard DC-4s from Capital’s fleet, and were returned to regular service during the day. The one-way Nighthawk fare between New York and Chicago, advertised as ‘practically rail coach fare’, was $29.60.

The Nighthawk was an instant success and Capital Airlines was perceived as an innovative carrier that gave the public what it wanted. Slowly, often grudgingly, other scheduled airlines began to embrace the coach class concept—until, over the years, the phenomenon grew to become the commonplace standard of airline travel that we know today. Coach Class is an innovation created by the underdogs of the airline industry: the large irregular carriers of the United States.

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Among the dozens of non-skeds were several that decided to forego the problems associated with passenger transport and stick to flying freight. The transportation of cargo by air was rapidly becoming a very lucrative field.

The Santa Fe Railway saw the potential of augmenting its rail freight service with air operations and purchased several C-47s and C-54s for an airline division, Santa Fe Skyway.

The CAB now had to deal with the question of airlines being operated by corporations from other sectors of the transport industry. The Board eventually ruled against railroads, steamship companies, and bus lines that were trying to launch ‘airline divisions’ and the Santa Fe had to abandon its airborne dreams, as did several other land and sea-based common carriers.

But the postwar non-skeds that went into business to carry goods strictly by air were proving that such service was in demand. And they were using the perfect aircraft for the job. When the government began releasing Curtiss C-46s from military service after the war, the non-skeds snapped them up.

When it was in production, the C-46, military nickname ‘Commando’, had been the largest twin-engine transport in existence and, during World War II, it had proved to be a freight-hauling workhorse. As the C-47 was designated DC-3 in commercial passenger use, the C-46 could be converted to its passenger counterpart, the CW-20. However, the C-46/CW-20’s postwar appeal as a passenger transport for the certificated airlines was negated by the abundance of more suitable C-47s and C-54s (DC-4s) in the marketplace and by new postwar designs coming off the production lines.

However, the non-certificated carriers embraced the Commando both as a cargo and as a passenger transport because the aircraft were readily available, relatively inexpensive to acquire, and unwanted by the scheduled airlines. When the US Air Force decided to lease some of the hundreds of C-46s that it had in storage for $300 per month per plane, the majority of them went to non-skeds.

Seeing the benefits that the non-scheduled airlines were providing by quickly moving large volumes of freight by air, the CAB became keenly interested in the possibility of a regulated air freight service. Several of the all-cargo large irregular carriers applied for certificates to provide scheduled air freight service. The Board decided to take a chance, and issued temporary certificates to cargo carriers Slick Airways, US Air Lines, and Flying Tiger Line.

These three were accepted into the CAB’s rarified world of certificated carriers in 1949, while their passenger-carrying counterparts among the non-skeds were still on the outside, looking in.