Civil Aeronautics Board

The Civil Aeronautics Board (CAB) was an agency of the federal government of the United States, formed in 1938 and abolished in 1985, that regulated aviation services (including scheduled passenger airline service ) and conducted air accident investigations. The agency was headquartered in Washington, D.C.

Functions
The primary role of the CAB was to regulate scheduled commercial airline operations in the United States. The CAB strictly controlled all U.S. certificated airlines ("scheduled carriers") -- deciding which routes would be serviced by which airlines, and setting minimum limits on passenger fares (comparable to the Interstate Commerce Commission) -- effectively managing competition between airlines, and ensuring certain levels of service to communities throughout the United States.

While CAB regulation suppressed free competition, it provided security for the existing airlines, avoided gluts and shortages of passengers on certain routes, and (partly by allowing airlines to carry air mail) secured airline service for communities that would have otherwise been served less, or not have been served at all (due to low passenger traffic or other reasons).

To achieve its goals, the CAB was empowered to provide and administer subsidies to airlines. Further, the CAB regulated airline industry mergers and intercompany contracting -- but shielded the airlines from antitrust regulation. Additionally, within the airline industry, the CAB was assigned to prevent deceptive trade practices and unfair competition methods (similar to the role of the Federal Trade Commission).

History


The Civil Aeronautics Authority Act of 1938 superseded the Watres Act, which had regulated commercial aviation since the mid-1920s, and created a new agency, the Civil Aeronautics Authority. The agency was renamed in 1940, due to a merger with the Air Safety Board. It became an independent agency under Reorganization Plans Nos. III and IV of 1940, effective on June 30, 1940. The Air Safety Board had formed in 1938.



Other predecessor agencies included the Aeronautics Branch (1926–1934), the Bureau of Air Commerce (1934–1938), and the Bureau of Air Mail, Interstate Commerce Commission (1934–38).

The first air accident investigation led by the CAB was the 1940 Lovettsville air disaster.

Some duties were transferred to the Federal Aviation Agency in 1958.

The National Transportation Safety Board (NTSB) was established in 1967, taking over air accident investigation duties.

Under the chairmanship of John Robson, the Civil Aeronautics Board "in April 1976 did the unthinkable, becoming the first regulatory body to support deregulation," which President Gerald Ford first spurred in February 1975 with a proposal to abolish the CAB altogether. In the late 1970s, during the administration of President Jimmy Carter, and under the guidance of his economic advisor Alfred E. Kahn (who had specialized in regulatory economics, having written one of the standard texts and previously been chairman of the New York Public Service Commission, the body regulating utilities in New York State, and was appointed CAB Chairman), the CAB continued to be the focus of the early deregulation movement, and its dissolution was one of the most conspicuous pioneering events of the movement. The Airline Deregulation Act of 1978 specified that the CAB would eventually be disestablished &mdash; the first federal regulatory regime, since the 1930s, to be totally dismantled &mdash; and this happened on January 1, 1985. The remaining tasks were transferred to the Secretary of Transportation except for a few going to the U.S. Postal Service.

Airlines not regulated by the CAB
The CAB regulated almost all air transportation in the US, but there were some exceptions.

Air taxis
The CAB chose not to regulate airlines flying "small aircraft". This was formalized in Part 298 of the Board's economic regulations, which in 1952 gave a blanket authorization for any airline operating an aircraft with a maximum gross takeoff weight of 12,500 lbs or less. Such airlines were originally known as "air taxis", later as commuter airlines or Part 298 carriers. Confusingly, "air taxi" was also the term by which the CAB referred to Aspen Airways and Wright Air Lines (after they became certificated carriers) within the CAB's taxonomy of certificated scheduled airlines (see "Airline categories" below). However, in 1972 the CAB expanded this category to include aircraft of 30 passengers or fewer, with a payload of less than 7,500 lbs. Such carriers did have to obtain Federal Aviation Administration operational/safety certification but were otherwise able to fly wherever they pleased.

The CAB would, on occasion, also exempt air-taxi or commuter operators to operate aircraft larger than the limits. For instance, in 1971, it exempted Executive Airlines and Air New England (at that time a commuter carrier) to fly propeller aircraft up to 44 seats to expand service in New England.

On five occasions, the CAB certificated former air taxi/commuter airlines to fly larger aircraft. These airlines were then regulated by the CAB like any other CAB carrier:


 * Aspen Airways in 1967
 * TAG Airlines in 1969
 * Wright Air Lines in 1972
 * Air New England in 1974
 * Air Midwest in 1976

Intrastate airlines
An airline that restricted flying to within one state and took other steps to minimize participation in interstate commerce could avoid CAB regulation and fly as an intrastate airline. In the case of air taxis, the CAB chose not to regulate. In the case of intrastate airlines, it was legally unable to. Restriction of flying to a single state was not sufficient to avoid CAB regulation; the additional measures to avoid interstate commerce were critical. Furthermore, flying within a single state was generally interpreted strictly. An aircraft flying outside the boundaries of that one state could trigger CAB authority, including, in the case of Hawaii, flying overwater between the islands, which was upheld in court as being intrinsically interstate commerce because the Federal government had domain over the seas.

Note that the Federal government, while not providing economic regulation over intrastate carriers, did regulate them from an operational/safety standpoint. For those purposes intrastate airlines were regulated by the Federal Aviation Administration just like any other carrier.

Airline categories
The CAB divided the airlines it regulated into categories according to the roles they were meant to play. The following draws from the CAB's FY 1977 Report to Congress dated May 1978, and so reflects the state of CAB airline certification just prior to deregulation.

Supplemental air carrier
The first split was between scheduled and non-scheduled (charter carriers). The CAB referred to non-scheduled carriers, in 1978, as supplemental air carriers. Prior to 1955, the CAB called them irregular air carriers. Scheduled carriers were also free to offer charters. Throughout the history of the CAB, the supplementals constantly attempted to become scheduled carriers and the CAB constantly rejected them. There were also tight restrictions on supplementals, designed to protect the scheduled carriers.

International air carrier
Scheduled carriers were split between domestic and international. Two carriers were exclusively international: Air Micronesia (a subsidiary of Continental Airlines) and cargo carrier Seaboard. One carrier was almost exclusively international: Pan Am and, until deregulation, was not permitted to sell tickets for transport within the continental US. While it could fly aircraft from, say, New York to Los Angeles, it could not sell tickets between New York and Los Angeles despite having significant international operations in both cities. All other international carriers were also domestic carriers. There was a split within international between passenger airlines (which were always free to carry cargo and sometimes flew pure cargo aircraft) and cargo airlines.

Trunk carrier
Domestic had many subcategories. The original CAB scheduled carriers were known as trunkline carriers, trunklines, trunk airlines or simply just trunks, with most (but not all) such carriers having certificates dating back to 1938, the date of the Civil Aeronautics Authority Act that created the CAB. These were carriers such as United Air Lines, American, TWA, etc, all with origins going back to the 1920s and 1930s. For a summary, see the table below.

Local service carrier
After World War II, the CAB certificated a second set of scheduled carriers, the local service carriers. In theory, local service airlines served smaller routes than the trunklines, though most trunklines tended to have some legacy points on their networks that were quite small. Over time, the CAB allowed local service carriers to compete on some routes with trunklines and some local service carriers became sizeable airlines. However, as shown in the table below, in 1978, just prior to deregulation, the largest local service carrier Allegheny (soon to rename itself USAir) was still smaller in revenue terms than the smallest trunk, National, and basic operating statistics show the local service carriers as flying distinctly less capacity, smaller aircraft and shorter routes than the trunks.

Local service carriers were also the biggest recipients of CAB subsidies, as shown below. In 1978, the CAB paid a total of $66.3 million in subsidies to airlines (over $275 million in 2024 dollars) of which $58.5 million was paid to local service carriers, equivalent to over 40% of local service carrier operating profits that year.

Other domestic certificate categories
Other CAB domestic categories included intra-Alaskan, Hawaiian, helicopter, regional, air taxi, and cargo. Historically there was a territorial category, superseded by Hawaiian and Intra-Alaskan after Hawaii and Alaska became states. Some carriers had more than one domestic status. For instance, Alaska Airlines was listed as both an Alaska carrier and a trunk, however, for the purposes of 1978 CAB statistics it was counted as an Alaska carrier.

1978 CAB scheduled carriers
The wide variety of carriers in the table below hints at problems with just one facet of CAB regulation. Tiny Alaskan back-country carriers like Munz Northern and Kodiak-Western were subject to the same kind of proceedings as huge airlines like United and American. 1975 certification proceedings for Munz Northern were memorialized in 32 pages of CAB reports, encompassing the deliberations of the (usually five but in this case four) member CAB board itself, plus the earlier deliberations of an administrative law judge in front of whom six people appeared, representing Munz and two other interested parties. At the time, Munz had six aircraft, each carrying 10 people or fewer. Further, Munz then had the same reporting requirement as carriers like United, all the usual reams of data that had to be sent to the CAB, for a carrier a tiny fraction of the size.

Offices


The agency had its headquarters in the Universal Building in Dupont Circle, Washington, D.C. The agency had moved there by May 1959. Previously it had been headquartered in the Commerce Building (a.k.a. the Herbert C. Hoover Building), and its offices were in several buildings. After moving into the Universal Building, CAB leased space there. By 1968 the agency had acquired an additional approximately 2000 sqft of space in the same building, resulting in additional rent expenses.