325. Memorandum From the Executive Secretary of the Department of State (Eliot) to the President’s Assistant for National Security Affairs (Kissinger)1

SUBJECT

  • Civil Aviation Consultations with the United Kingdom

I refer to my memorandum of April 222 informing you of civil aviation consultations scheduled with the United Kingdom and enclosing a paper describing the issues. The consultations, which were held in Washington from May 18–22, clarified the potential problem of over-capacity in the US–UK scheduled passenger market and its effect on BOAC’s efforts to recapture a larger share of the traffic. The British delegation served notice that in the future the UK might have to take unilateral steps because of its concern that capacity increases by US carriers would preempt opportunities for BOAC and result in uneconomic operations for all the carriers. We contested both the necessity of and justification for such unilateral action in the light of expectations that our carriers, as they have done in the past, would for normal commercial reasons adjust capacity to market conditions. However, the conver[Page 980]sion to 7473 equipment makes short-term capacity adjustments more difficult, and we are cautioning the US carriers to exercise some restraint in order to forestall unilateral action by the UK and thus preserve the liberal environment we have enjoyed under the US–UK Air Services Agreement of 1946.4 The principles of that Agreement have been the cornerstone of all our subsequent air transport agreements with other countries.

Theodore L. Eliot, Jr.5
Executive Secretary
  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 726, Country Files—Europe, United Kingdom, Vol. II. Limited Official Use.
  2. A copy of the memorandum is ibid.
  3. Reference to the Boeing 747 series aircraft, whose seating capacity could reach approximately 500 persons per aircraft, depending on the configuration used in the aircraft. These planes were scheduled to go into service with major carriers in 1970.
  4. For text of the agreement, signed in Bermuda February 11, 1946, and entered into force that day, see 60 Stat. 1499.
  5. Deputy Executive Secretary Robert T. Curran signed for Eliot above Eliot’s typed signature.