The Ambassador in Cuba (Norweb) to the Secretary of State

No. 2327

Sir: I have the honor to forward herewith copy of a memorandum prepared by Commercial Attaché Howard, in which is outlined the present policy and attitude of the Cuban Government authorities concerned [Page 750] with civil aviation matters. The development of this policy has almost in its entirety taken place over the past year and a half and is motivated primarily by a desire to secure to Cuban companies reciprocal privileges from the countries of which foreign airlines operating into Cuba are nationals.

The data in the enclosed memorandum should be very useful to the Department in the event of bilateral aviation discussions with Cuba. Moreover, I believe that this resume will be of great value to American companies who are considering operations to Cuba, but owing to its nature should be made available with discretion.

Respectfully yours,

R. Henry Norweb

Memorandum by the Commercial Attaché in Cuba (Howard)

Having no Cuban airlines in a position to handle but a small part of the international air traffic between Cuba and abroad, the Cuban Government is in a rather awkward position as regards civil aviation, and the gradual evolving of a policy has been a struggle between the desire to have excellent connections by air with foreign countries and at the same time preserve a trading position for Cuban operators.

Up until late 1945 Cuba was prepared to grant licenses to practically any company desiring to come in from any country, either as a scheduled or a chartered service, under fairly simple procedures and without demanding reciprocal treatment for its national companies. However, gaining impetus largely from pressure brought upon it by Pan American in connection with its desire to operate Habana–Mexico through its subsidiary Compañia Cubana de Aviación, as well as by Cubana and Expreso for accelerated CAB action on their applications to operate scheduled passenger and mail services between Habana and Miami, the Ministry of Communications, through the National Transportation Commission, began adopting a series of regulations aiming to establish for Cuban companies the right to demand reciprocal treatment, and to protect these companies in so far as possible on the routes which they were already operating or might later establish.

The first ruling was in respect to granting to foreign airlines permits for scheduled services, all of which from the end of April 1946 carried the proviso that applications by Cuban companies must be honored in reciprocity.

The second of the Government’s pronouncements was that no permits would be given for charter operations except for a limited number of flights over a restricted period of time. This was modified, [Page 751] in fact, by their action in granting, in cases of emergency, two fairly long-term permits, the first of which was to aid the moving of the heavy tourist traffic between Habana and Miami during the winter of 1945–1946, and the second the licensing of 421 flights to a United States charter operator to assist in moving the Cuban avocado crop in the summer of 1946.

The third was a regulation originating with the Minister of Communications that no further licenses to carry passengers, mail or freight between Habana and Miami would be granted to any foreign company, in the belief that existing services were entirely adequate to handle the ordinary traffic.

The fourth and latest evidence of the Government’s rapidly developing nationalistic attitude came in October 1946 when instructions were given the Transportation Commission by the Minister of Communications that certain regulations with some real teeth be issued. These were to provide that no foreign operators could be given permits to operate as scheduled services into Cuba, unless they were duly certificated by their own national authorities to operate the route; that experimental flights should be limited to four per company; that the Commission has the right to fix specific conditions regarding capacity, frequencies, etc.; that the Commission shall determine whether or not the flights applied for are of public utility and convenience for Cuba, taking interests of Cuban air transportation companies into consideration, and that foreign companies already operating into Cuba under Cuban authorization must present documentary route authorizations from their own governments within 180 days of the promulgation of the regulations or have their permits suspended. These instructions were given in the form of a letter to the President of the National Transportation Commission, and a copy thereof, which was given confidentially by the Minister to the Commercial Attaché, is attached.72

Regulations were likewise drawn up, but not as yet issued, by the Transportation Commission making procedure more complicated for individual charter cargo flights to obtain Cuban Government permits.

Unfortunately for the accomplishment of the intention of these existing and proposed rulings, Cuba has no company at present fully in a position to take advantage of the reciprocity demands; the only company identifiable as a truly Cuban company, namely Aerovías Q. is operating on a shoestring and, although it is under Government protection to an extent where it may be regarded as a subsidized line, is not expected to succeed; Expreso Aéreo, which was nearly identifiable [Page 752] as a Cuban company, seems on the verge of bankruptcy; and Compañía Cubana, the majority of whose stock is owned outright by Pan American Airways, lacks equipment with which to undertake even its Mexican run, which has already been authorized by the Cuban government. Furthermore, in so far as demands for reciprocity are concerned, the Transportation Commission now regards both Cubana and Expreso as United States controlled entities.

This situation has led to some corner-cutting. For example, in order to act on the Miami–Habana application of National (which was recently CAB certificated for operations between Tampa and Habana and also between Miami and Habana), the Transportation Commission squared its action with its Miami–Habana ruling by giving the Cuban companies an opportunity to object to the granting of the license, and the American company an opportunity to rebut, with the final result that the operation was licensed.

In the case of Chicago and Southern this same practice was resorted to, even though no operation from Miami was contemplated, on the basis that the Cuban companies should have an opportunity to present their objections to the licensing of any new operation coming into Cuba which they felt would detract from the availability of passenger traffic from Miami. The attorneys for Chicago and Southern secured statements from Pan American, Compañía Cubana, and Expreso to the effect that they had no objection to this service, and presented these statements with their applications. However, last moment pressure now being brought by President Grau may make the issuance of this permit a matter involving reciprocal treatment to Aerovias Q.

This protective attitude of the Transportation Commission shows an intensive tightening up in its licensing program, for only three months ago Trans-Caribbean Air Cargo Lines and Air Cargo Transport Corporation were licensed to conduct scheduled operations between New York and Habana, despite the fact that they had not been certificated by CAB and were charter operators from the United States whose services paralleled the CAB certificated route of National Airlines.

If further illustration is needed, reference is made to the provisions of paragraph VII of the Minister of Communications’ letter of instruction, dated October 9, to the Transportation Commission (see copy attached73) which will, if enforced, oblige these two lines to produce CAB certificates for their operations or have their Cuban licenses revoked.

A considerable amount of pressure for the adoption of even stricter reciprocal regulations is being brought to bear on the Government, [Page 753] both by the Cuban operating companies and by persons in the Civil Aviation Committee, which acts as advisor to the National Transportation Commission. Formerly the Transportation Commission did not refer matters concerning issuance of licenses to the Civil Aviation Committee, which is not only composed in part of persons at present in the employ of various airlines, but is under the direction of Captain Torres Menier, long-time employee of Expreso (in whose interests he is said to be working) and who is allegedly extremely politically minded.

In particular this is being brought strongly by Aerovias Q through President Grau, under whose protection it is operating, and Torres Menier has likewise expressed himself as strongly in its favor. Their ideas go to the extent of establishing a definite percentage of passengers which can be carried by Cuban airlines and by foreign airlines between Cuba and the country involved. Today it does not seem to present an immediate threat for the reason that Cuba has not at present the airlines to render an important contribution to such services, but should a regulation of this kind be promulgated it would enable Aerovias Q, Expreso, as well as newer companies which have been formed and licensed for operation by the Cuban Government but which have as yet no equipment, to raise funds for a “sure thing” operation, which they cannot now raise on the basis of free competition with United States and other airlines.

. . . . . . . . . . . . . .

Briefly to summarize the present position, the Cuban Government, which formally adopted a laissez faire attitude regarding civil aviation, has begun to show during the past eighteen months a rapidly intensifying nationalistic attitude towards its future. This has been evidenced by an increasingly protective set of regulations in the interest of the development of Cuban civil aviation. They are badly handicapped in these efforts owing to the lack of a well developed Cuban industry, but it is believed that the favorable conditions which the Government is endeavoring to create through its regulatory devices will give to Cuban services an opportunity to expand.

Meanwhile although certain instances, such as the President’s insistence noted in the case of Aerovias Q, may arise, it is believed that the direction of matters concerning civil aviation is in the hands of fair minded and competent people who desire to see Cuba well served by competent airlines and who will not take undue advantage of the regulatory provisions.

George C. Howard
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