United States Supreme Court Cases & Opinions

U.S. Supreme Court

Western Air Lines v. CAB, 347 U.S. 67 (1954)

Western Air Lines v. Civil Aeronautics Board

Argued December 9-10, 1953

Decided February 1, 1954*

347 U.S. 67

Syllabus

Section 406(b) of the Civil Aeronautics Act, as amended, requires the Civil Aeronautics Board, in fixing mail-pay subsidy for air carriers, to

"take into consideration . . . the need of each such air carrier for compensation . . . sufficient . . . together with all other revenue of the air carrier, to enable such air carrier . . . to maintain and continue the development"

of a national air transportation system.

Held: in fixing mail-pay subsidy for the air carrier in this case, the Board was required to take into consideration the carrier's profits derived from (1) the operation of restaurants and other concessions at airports, (2) the sale of tangible assets to another air carrier, and (3) the sale of a route to another air carrier. Pp. 347 U. S. 68-73.

(a) The "need" of the carrier which the Board is required to consider in fixing a subsidy rate is "the need" of the carrier as a whole. P. 347 U. S. 71.

(b) The "all other revenue" which the Board is required to consider includes nonflight income from incidental carrier activities, not transportation revenue alone. P. 347 U. S. 71.

(c) The profit derived by a carrier from the sale of a route to another carrier is also "other revenue" within the meaning of § 406(b). Pp. 347 U. S. 71-72.

(d) The standard prescribed by Congress to guide the Board in fixing mail-pay subsidy is "the need" of the carrier, and the Board was not justified, on the record in this case, in disregarding profits derived from the sale of a route to another carrier in order "to safeguard the incentive for voluntary route transfers." Pp. 347 U. S. 72-73.

92 U.S.App.D.C. 248, 207 F.2d 200, affirmed.

Page 347 U. S. 68

The Civil Aeronautics Board issued an order fixing mail-pay subsidy for an air carrier. 14 C.A.B. 201. Both the Postmaster General and the carrier sought review of the Board's order in the Court of Appeals, which sustained the order in part and reversed it is part. 92 U.S.App.D.C. 248, 207 F.2d 200. This Court granted certiorari. 346 U.S. 811. Affirmed, p. 347 U. S. 73.