limits of liability and no-fault liability, to encourage rapid settlement of claims at a fair level for Americans. The 1970 Presidential Statement on International Air Transportation Policy stated that the primary objectives of the United States in the revision of the Warsaw Convention were "certainty, speed, and sufficiency of recovery by the injured party." The United States has also sought generally to modernize the convention's provisions and, in particular, to streamline the ticketing and cargo documentation requirements. These objectives will have been achieved upon the entry into force of Protocols No. 3 and No. 4 and the implementation of the domestic plan. On January 14, 1977, President Ford transmitted the two protocols to the Senate recommending that they receive prompt consideration. S. Ex. B, 95th Cong., 1st Sess. § 5 Domestic Law and Regulation On September 8, 1976, President Ford announced his approval of a comprehensive statement of international air transportation policy recommended by the Economic Policy Board Task Force on International Air Transportation Policy, setting forth the objectives the United States would seek in negotiations with other nations and calling for revisions of certain regulatory policies of the Civil Aeronautics Board (CAB). The President directed that the new statement of policy guidance supersede the statement issued June 22, 1970, for use by officials of the Government in dealing with international aviation matters. The U.S. policy statement listed five principal objectives to guide U.S. international air transportation policy: First, reliance on competitive market forces to the greatest extent feasible, recognizing that the views of other nations may differ and that our policies must be modified in some instances in order to reach bilateral and multilateral accommodations. Second, provision for the transportation of people, mail, and goods, wherever a substantial need exists, at as low a price as is economically justified. Third, support of a private U.S. international air transportation industry that is economically viable and efficient, that will generate sufficient earnings to attract private capital and provide job opportunities. Fourth, consistency with and contribution toward U.S. national objectives in defense and security, foreign policy, and international commerce. Fifth, encouragement of a safe and efficient system of airports and airways and protection of the U.S. environment. In the area of public service considerations, the policy statement said that the United States would pursue the following goals: • Regularly scheduled international air transportation of people, mail, and goods at as low a cost as is economically justified. • International air charter transportation of people and goods by charter specialists and scheduled carriers operating charter flights, at as low a cost as is economically justified, recognizing that essential levels of scheduled service must be maintained. • Effective competition among carriers and among the classes of service offered, including a fair and equal competitive opportunity for the private enterprise air carriers of the United States. The statement recommends a system of routes, as extensive as can be economically sustained, with regular, scheduled service by U.S. flag air carriers. It calls for U.S. Government support of actions by U.S. flag carriers to rationalize their route structures and to drop uneconomic routes. In instances where a specific and clearly defined national defense or foreign policy interest may require service by a U.S. carrier on a route that is not economically viable, it states that direct Federal subsidy would be preferable to a policy of indirect subsidy or cross-subsidization from profitable routes. In bilateral international negotiations, it states as the primary objective the achievement of an international environment in which privately owned and operated U.S. air carriers have a fair and equal opportunity to compete for benefits at least as great as those available to foreign carriers. It continues: The United States will continue to endorse the exchange of air transport rights and privileges through a system of bilateral air transport agreements. We have considered multilateral agreements and other alternatives to the bilateral system, but are not convinced that another system would work more effectively. While particular problems, such as fare and rate regulation, may require multilateral discussions, we can work within the basic structure of bilateral agreements, which provides sufficient flexibility to accommodate most circumstances. Closer integration of international and domestic route systems is recommended, including the following actions: Services to Canada, Mexico, and the Caribbean should be extensions of the domestic route system. • Authority to carry local traffic on domestic segments of international flights, both passengers and freight, should be granted, because regulatory restrictions on the local traffic authority of the U.S. international air carriers no longer serve the public interest. Such authority will increase the economic viability of domestic extensions of international flights, thereby supporting more direct services for the shipping and traveling public. • Blocked space agreements on domestic segments of international flights and equipment interchange agreements should be considered by the carriers and the Civil Aeronautics Board as means to increase the economic viability of behind-the-gateway route segments, and hence to benefit the public with more direct service at more American cities. All U.S. international carriers should be permitted to have domestic traffic systems to feed traffic to their international operations. In the area of charter services the policy statement calls for modification of Civil Aeronautics Board regulations to make available more low-cost services to the traveling public. In negotiating charter service landing rights, it states, the United States would insist on equal treatment of U.S. scheduled and supplemental carriers. The policy statement declares that the air transport interests of the. United States are best served by a private U.S. international air transportation industry and that the United States will support a strong, viable system of international routes. With respect to market share, the statement continues: The United States has traditionally espoused the Bermuda system, under which each carrier determines for itself the level of capacity it believes is warranted, subject only to ex post facto review by governments. The United States is faced with increasing criticism of the Bermuda system by foreign governments whose perceptions of competitive principles differ from our own. The preservation of the competitive concept underlying the Bermuda system is vital, because systems under which carriers or governments predetermine capacity for market share reasons can introduce artificial restraints unrelated to carrier efficiency or traffic demand. When capacity disputes arise, the United States must weigh carefully each situation to determine overall U.S. interests. Special procedures to deal with capacity disputes may be appropriate in some instances. When other countries advocate less flexiblity in capacity competition, we may insist, as a quid pro quo, on greater flexibility in pricing competition, so long as forecast load factors are well below full utilization load factors. [Another] capacity issue arises from situations where carriers rely excessively on traffic having its origin or destination behind the homeland of the carrier. Such reliance is contrary to the provisions of our bilateral air transport agreements; these operations have severely distorted traffic levels and distribution in certain markets. The United States will seek bilateral review of foreign carrier operations considered to be in violation of such provisions and will attach high priority to resolution of this matter. Policy with respect to the international competitive environment is described as follows: The United States opposes unfair, discriminatory, or restrictive practices by foreign countries that limit the competitive capability of U.S. flag carriers. Section 2 of the International Air Transportation Fair Competitive Practices Act of 1974 specifically directs departments and agencies of this Government to seek elimination of these practices. This policy will be pursued vigorously. The United States also opposes discriminatory or inequitable charges imposed on U.S. flag carriers for the use of airway and airport properties, and we will utilize to the maximum extent feasible section 3 of the International Air Transportation Fair Competitive Practices Act of 1974, or section 301 of the Trade Act of 1974, to correct inequities. This Government clearly recognizes the need to recover from users the costs of the services provided. We believe that, in imposing such charges, care should be taken to ensure that they are not discriminatory and that the level of the charge is related to cost. On both of these issues, the United States will seek change through negotiation. As a last resort, however, unilateral action may be taken to correct the problem. In the interests of safety, environmental, and other considerations, the U.S. policy statement calls for: • Continued support of the International Civil Aviation Organization (ICAO) and its efforts to adopt and implement international standards. • Comprehensive biennial reviews, in cooperation with other nations, of safety regulations applicable to the certification and operation of aircraft. • Encouragement of agreement on international environmental issues through the ICAO forum, especially agreement on application of noise standards for existing aircraft in international operations; but if necessary, development of U.S. national standards more stringent than those developed in ICAO to protect human health and environmental quality. • Stronger and more effective security standards to prevent hijacking, air piracy, and terrorism, to be developed through ICAO if possible, but unilaterally if agreement is not reached, and continuance of bilateral programs to provide technical assistance to, and exchange of information with, foreign nations. "International Air Transportation Policy of the United States," Sept. 1976, recommended by the Economic Policy Board Task Force on International Air Transportation Policy of the United States, chaired by the Dept. of State and the Dept. of Transportation. Civil Aeronautics Board Decisions On June 10, 1976, President Ford issued Executive Order 11920, "Establishing Executive Branch Procedures Solely for the Purpose of Facilitating Presidential Review of Decisions Submitted to the President by the Civil Aeronautics Board." The White House simultaneously released a fact sheet in which it stated that the guidelines established by the order were designed "to better assure fairness and to avoid suspicions of impropriety." Under Section 801 of the Federal Aviation Act (49 U.S.C. 1461), the President has authority to approve or disapprove certification and permit decisions of the Civil Aeronautics Board (CAB) involving international and overseas air transportation. The White House release noted that over the years, the process of Presidential review of such CAB decisions had provoked controversy because (1) the views of the executive departments had not always been presented in the ordinary course of proceedings, (2) there was a lack of procedural standards on access by interested parties to the President's staff, and (3) recommended CAB decisions were not made public prior to action by the President, "even where foreign policy or defense considerations do not require confidential treatment prior to such action." The provisions of the Executive order became effective July 11, 1976. They are summarized in the fact sheet as follows: 1. Executive branch departments and agencies are directed, whenever possible, to present their views on regulatory issues to the CAB, on the record, in the regular course of its proceedings. 2. Individuals within the Executive Office of the President are directed not to discuss pending cases with interested parties and to transmit all written communications from such parties to the appropriate department or agency for handling. An exception is possible to handle an unusual circumstance. 3. Executive branch departments and agencies are directed to establish public dockets for all written communications from private parties (other than those requiring confidential treatment because of defense or foreign policy concerns), and to prescribe such other procedures governing oral and written communications with respect to CAB decisions as they determine appropriate. 4. A procedure is established for the release of CAB decisions as soon as they are screened for matters that must remain confidential for reasons relating to foreign policy or national defense. The procedure being adopted accords with a recent court decision involving the release of CAB decisions under the Freedom of Information Act. 5. Executive branch departments and agencies are requested to advise the President whether any foreign policy or defense factors might affect the judicial reviewability of the CAB proceedings and decisions. In a case involving a "routine" approval of an order with respect to a foreign or overseas certificate of a U.S. carrier, i.e., one not based on any foreign policy or defense objectives, the President may indicate that he would have no objection to judicial review of the CAB decision and proceeding. White House Press Release, June 10, 1976. For the text of E. O. 11920, see Fed. Reg, Vol. 41, No. 114, June 10, 1976, pp. 23665-23666. On July 29, 1976, the Dept. of Transportation issued procedures for the receipt by that Department of comments from persons not employed by the Federal government in connection with possible recommendations by the Department to the President on decisions of the CAB submitted for the President's approval under sec. 801 of the Federal Aviation Act of 1958. See 49 CFR 81.1, 81.3, 81.5, 81.7; Fed. Reg., Vol. 41, No. 151, Aug. 4, 1976, p. |