U.S. POLICY WITH RESPECT TO THE DEVELOPMENT OF CARGO AIR
LIFT
The enclosed draft statement of policy on the subject, prepared by the
NSC Planning Board with the
participation of representatives of the Departments of Justice and
Commerce and the Federal Aviation Agency, is transmitted herewith for
consideration by the National Security Council at its meeting on
Thursday, January 7, 1960.
It is recommended that, if the Council adopts the enclosed statement of
policy, it be submitted to the President with the recommendation that he
approve it; direct its implementation by all appropriate Executive
departments and agencies of the U.S. Government; and designate
coordinating agencies as follows: the Department of Defense for
Paragraph 16, the Office of Civil and Defense Mobilization for Paragraph
17, and the Federal Aviation Agency for Paragraph 18.
cc: The Secretary of the Treasury
The Attorney General
The Secretary of Commerce
The Director, Bureau of the Budget
The Administrator, Federal Aviation Agency
The Chairman, Joint Chiefs of Staff
The Director of Central Intelligence
DRAFT STATEMENT
of
U.S. POLICY WITH RESPECT TO THE
DEVELOPMENT OF CARGO AIR LIFT
GENERAL CONSIDERATIONS
1. It is in the [national security]2 interest of the United States to
have available an efficient and effective civil air cargo fleet,
which, in time of peace, as well as in a national emergency, could
be used to meet a portion of military air cargo requirements. Such a
fleet could also serve as an instrument of [other]3 national policies. The
United States does not now have such a fleet.
Conditions Which Have Limited the Development of a
Modern Civil Air Cargo Fleet
2. In the commercial field, long preoccupation with the more
profitable passenger business and with constant passenger aircraft
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modernization has resulted in a lack of emphasis on the development
of the cargo business and of uncompromised all-cargo aircraft. As a
result, commercial cargo planes are merely improvised modifications
of passenger configured aircraft. Adaptation of the present
essentially passenger configured aircraft to cargo use results in
high operating costs, high handling charges, and inflexibility as to
operating bases and facilities.
3. In the last several years the Department of Defense has had a
higher priority requirement for the development
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of convertible
(troop-cargo) aircraft than for the development of all-cargo
aircraft.
4. The characteristics of uncompromised cargo aircraft are unique and
differ importantly from the characteristics of presently available
passenger aircraft. This difference is not unlike the difference
between busses and trucks, or the difference between Pullman cars
and freight cars. What is needed to further the sound growth of air
cargo are types of aircraft which would (a) have an intercontinental
capability, (b) be capable of operating from relatively small
unsophisticated airports, (c) employ a minimum of high cost and high
maintenance components, and (d) be capable of being routinely
operated at a direct operating cost of 3.5 to 4 cents per ton-mile.
This last-named capability would make possible air cargo service to
the user at about 10 cents per ton-mile, or something less than
one-half the present average rates. At present this is considered to
be a very economical air cargo charge. A cargo aircraft currently
being produced in Canada represents a major step toward achievement
of these characteristics, and U.S. aircraft now under development
show even greater promise.
5. Aircraft with the characteristics enumerated above could serve
civil and many military uses. With the exception of certain outsized
and sensitive cargo, the characteristics of most routine military
cargo (dimensions, weight and density) are compatible with those of
commercial cargo.
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6. The U.S. Government maintains a substantial military cargo airlift
capability and has not fully utilized in peacetime available civil
cargo airlift. The stated basis for this practice has been that the
U.S. commercial cargo airlift capability has not been adequate to
meet civil requirements and those military requirements which could
be moved by civil aircraft during periods of national emergency.
However, in recent years, the Department of Defense has increased
its use of the civil air cargo fleet by placing contracts with the
civil air carriers (11% of the total MATS air cargo traffic in FY 1959), thereby making a contribution to the
continued growth of the air cargo industry.
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Conditions Which Would Stimulate the Development of
a Modern Civil Air Cargo Fleet
7. The conditions may now exist whereby, with minimum measures of
government encouragement, the development of an uncompromised civil
air cargo fleet would be given the initial incentive it needs.
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8. Some U.S. air cargo operators are buying a Canadian-manufactured
all-cargo aircraft of advanced turbo-prop design. Direct operating
costs of this aircraft will be approximately 3.5 cents per ton-mile,
and user costs, approximately 10 cents per ten-mile. Such costs will
be competitive with those of other modes of transportation for many
types of cargo and are significantly lower than those for any cargo
aircraft currently in production in the United States. The
efficiency of this aircraft reflects an important technical advance
and the related Canadian government program guaranteeing purchase
loans up to 80 percent of the investment (available to U.S.
purchasers), constitutes an important financial initiative. The
potential air cargo market will be greatly stimulated by the
introduction of this aircraft.
9. Many of the commercial advantages to be derived from operation of
a modern civil air cargo fleet could be achieved by the procurement
and use of this Canadian-manufactured aircraft by U.S. civil
airlines. Such procurement and use would accord with the principle
of sharing the resources of the United States and Canada on a
continental rather than a national basis. On the other hand,
stimulation of the cargo aircraft manufacturing industry in the
United States would encourage (a) development of more efficient
cargo aircraft; and (b) retention of U.S. leadership in civil
aircraft production to the extent that is considered desirable.
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10. a. The progressive transfer of
non-hard-core traffic to civil carriers is now underway and will be
continued as civil aircraft of modern types (e.g., the DC–7F and the
L–1049H) become available. Limiting MATS peacetime operation to that required by the
war-time “hard-core”4 mission would permit the transfer of
additional cargo business to civil carriers and could assist in the
development of an uncompromised air cargo fleet. As civil air
carriers equip themselves with uncompromised cargo aircraft, this
orientation of MATS to the
“hard-core” function can be further effected, and increased use can
be made of the services of such civil carriers.
b. The foregoing would present no risk to the
national security, if coupled with guarantees that the civil air
cargo potential, as achieved,
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would be immediately and wholly responsive to
national defense needs. A stimulus to the purchase of uncompromised
cargo aircraft would be given if such transfer of business were
limited to those carriers which demonstrate a willingness and
ability to so modernize their cargo
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fleet. The progressive
transfer of MATS business,
appropriate reductions in average rates, [and the enactment of
legislation offering U.S. guarantee loans for the purchase of new
all-cargo aircraft]5 in addition to a continued rapid growth of
commercial demands for air cargo service, should stimulate
development of a modern air cargo fleet.
11. It is the general policy of the Federal Government that it will
not carry on any commercial activities to provide a service for its
own use if such services can be procured from private enterprise
through ordinary business channels.6 Exceptions to this policy are permitted
for various compelling reasons including national security and
“relatively large and disproportionately higher costs.” In this
connection it should be noted that Congress included in the FY 1960 Appropriation Act a provision
that $85 million of the funds appropriated for MATS would be available only for the
procurement of commercial air transportation service (passenger
and/or cargo). In denying funds in FY 1960 for procurement of ten jet-powered cargo
aircraft for use by MATS, Congress
also stated in an official report that “adequate transport capacity
for this portion of the MATS
mission exists in private commercial aircraft during the present
cold war situation, and in the civil reserve air fleet in the event
of mobilization”.
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12. The Government requires the immediate availability of the civil
air cargo fleet to assist in meeting military and mobilization
requirements in time of war, national emergency, or whenever a
military situation requires. There is a strong difference of view
within the Executive Branch as to whether the U.S. Government does
now have immediate availability of the civil air cargo fleet to meet
these requirements and as to whether present arrangements under
which the Civil Reserve Air Fleet is on call by the Government are
adequate.
13. The expansion of a civil air cargo fleet would have the bonus
effect of contributing to the fuller utilization of existing U.S.
aircraft production capacity to the extent that U.S. (rather than
foreign) manufactured aircraft are purchased.
14. The operation, under the U.S. flag, of an uncompromised efficient
air cargo fleet would enhance the prestige of the United States,
particularly in those overseas areas served by that fleet, and would
promote our objective of maintaining U.S. leadership in
international civil aviation. Uncompromised cargo aircraft developed
for U.S. use
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would also be useable by indigenous carriers in at least some of
the underdeveloped countries. Such aircraft would thus contribute to
the implementation of
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the policy that, as a means of promoting the
Free World aviation position in the underdeveloped areas and of
neutralizing further Sino-Soviet aviation encroachments in such
areas, the United States should encourage the development in the
United States and other Free World nations of competitive types of
aircraft and aviation equipment suitable for use in underdeveloped
areas.7
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OBJECTIVE
15. A civil air cargo capacity which, together with the military air
cargo fleet, is adequate (in quantity and quality), and immediately
available, to meet military and mobilization requirements in time of
war, national emergency, or whenever a military situation
requires.
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POLICY GUIDANCE
16. a. In the implementation of existing
policy which requires that the government divest itself of those
activities competitive with private industry, divert progressively
and in an orderly manner increasing quantities of non-hard-core
Federal cargo airlift traffic from the military cargo fleet to
certificated U.S. air carriers8 [as civil aircraft, of modern types (e.g., the
DC–7F and the L–1049H), become available and can provide civil air
cargo capability at reasonable cost9].10 In negotiating contracts for the carriage of
MATS non-hard-core cargo by
civil air carriers, give preference [to the extent feasible]11 [wherever possible]12 to those certificated U.S.
carriers which demonstrate a willingness and ability to acquire
uncompromised cargo aircraft.
b. As civil air carriers equip themselves with
uncompromised cargo aircraft, increase the use of such carriers for
non-hard-core traffic.
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c. Adjust the operations and capability of
MATS toward meeting only its
wartime “hard-core” mission in accordance with a and b above. However, at all
times:
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(1) Maintain MATS in a posture
adequate to satisfy those wartime military requirements which must
be met by military aircraft and those other wartime military
requirements which are beyond the capability of civil air carriers;
[productively utilize during peacetime the capability so
maintained].13
(2) Assure that the civil aircraft handling the cargo transferred to
the civil air cargo fleet pursuant to a and
b above will be immediately available to
meet military and mobilization requirements when necessary.
17. Review the present arrangements under which the Civil Reserve Air
Fleet is on call by the Government to assure that the civil cargo
air fleet is immediately available to meet military and mobilization
requirements.
18. If legislation is proposed which would, through purchase loan
guarantees, encourage and facilitate the acquisition by U.S.
certificated air carriers of uncompromised cargo aircraft produced
by U.S. manufacturers, it should contain provisions to ensure the
immediate availability of these cargo aircraft to meet military and
mobilization requirements.
