173. Memorandum From the Director of the Executive Secretariat (Howe) to Albert P. Toner, Assistant to the Staff Secretary at the White House1

SUBJECT

  • Additional Information You Requested concerning Staff Summary Supplement item # 2 of August 28, 1956, “Government-Industry Meeting on Air Transport”
1.
Official US international air transport policy is based on the “Bermuda Concept”, so named after the Agreement signed in 1946 by the UK and the US. This concept represents something of a compromise between the traditional US policy of advocating free and unfettered use and development of air routes overseas, and the more restrictive or protective policy followed by many European countries. Under the “Bermuda Concept” the US agreed to consult with the UK if it were felt by one of the signatories that its aviation interests were being injured by the activities of the others. It has set the pattern for subsequent air agreements the US has signed with a number of other countries.
2.
Misunderstandings and differences of opinion over the application of this policy have not infrequently developed between the US air industry and the US Government. In brief, the US industry, which has enjoyed relatively free competition abroad, advocates a restrictive policy in respect to domestic air traffic, and it has had considerable success in influencing Congressional opinion in favor of such a restrictive policy. Foreign airlines which are expanding rapidly are now ready and able in many cases to increase their service in the United States. Foreign governments whose airlines wish to have a greater share of the US market are increasingly insistent that the US adopt a more liberal policy domestically, and there have been numerous indications that they will condition the grantings of privileges to US overseas airlines on the granting of reciprocal privileges to their airlines in the US. Acute problems have therefore been caused by the dualistic attitude of the US industry. It is the Department’s view that unless the US industry recognizes the intimate relationship between their opportunities for expanding their overseas air service and their willingness to allow foreign airlines to have additional routes in the US, US aviation interests as well as US foreign policy objectives may suffer. The primary object of the [Page 470]proposed meeting, then, is to reach some agreement on a consistent application of US international air transport policy.
Fisher Howe2
  1. Source: Department of State, Central Files, 911.72/9–156. Official Use Only. Drafted by Alan G. James, Reports and Operations Staff, Executive Secretariat, on August 31.
  2. Printed from a copy which bears this typed signature.