Section 203(b)(7a) was thoroughly examined in Kenny ExtensionAir Freight, 49 M.C.C. 182 (1949), 61 M.C.C. 587 (1953). In the first Kenny report, it was found that the applicant's proposed operations in the transportation of commodities moving on commercial air-line or air express bills of lading and having an immediately prior or immediately subsequent movement by aircraft between Allegheny County Municipal Airport and the Greater Pittsburgh Airport, located in Allegheny County, Pa., on the one hand, and, on the other, points in Pennsylvania within 50 miles of either of such airports, is transportation by aircraft within the partial exemption provided by section 203(b)(7a) and as such would be exempt from the certificate or permit requirements of part II of the act; and that the application should be dismissed. No one opposed the application at the initial hearing. Upon consideration of a petition for reconsideration and further hearing filed by ATA, the proceedings were reopened for further hearing, and numerous parties were permitted to participate as interveners at the further hearing. In its report on further hearing, division 5 considered the national as well as the local application of the partial exemption, and, in particular, the possibility of interagency conflict. Some of the parties of record in the instant proceeding were parties of record in the Kenny proceeding, and they advanced there arguments similar to the ones here presented. Division 5 in the second Kenny report found that motor transportation of property to come within the 203(b) (7a) partial exemption must be confined to transportation, in bona fide collection, delivery, or transfer service, of shipments which have been received from, or will be delivered to, an air carrier as part of a continuous movement under a through bill of lading covering, in addition to the line-haul movement by air, the collection, delivery, or transfer service performed by the motor carrier. The decision therein clearly distinguishes between motor transportation on behalf of an air carrier within the air carrier's terminal area, on the one hand, and, on the other, transportation which, although essentially part of a through air-motor service extends beyond the air carrier's terminal area and must be considered to be a 8 ATA, Local Cartage National Conference, Air Cargo, Inc., and various rail and motor carriers. 9 All later references to the Kenny case concern the report on further hearing, 61 M.C.C. 587. 95 M.C.C. line-haul motor service of an independent motor carrier. It was determined that the former was within the exemption of section 203(b)(7a) while the latter was not. It was recognized in the Kenny case, that a reasonable terminal area for an air carrier at particular points may be different from that of a land carrier, and the report indicated that the terminal areas established by the air carriers in tariffs filed with the C.A.B. would ordinarily be acceptable. 10 The division stated, 61 M.C.C. at 596: In addition, this interpretation is sufficiently flexible to adapt itself to any future reasonable enlargement or curtailment of air terminal areas by the air carriers themselves which may be accomplished, and properly so, by changes in the present so-called terminal area tariffs of these air carriers on file with the C.A.B. The air carriers now establish their terminal area limits by filing of tariffs with the C.A.B., and our interpretation of the exemption of section 203(b)(7a) is based on the assumption that that agency would not hesitate to reject any publication which would result in an unreasonable enlargement of such an area. Emphasis added.7 Prior decisions, except those involving the Railway Express Agency, were overruled to the extent that they were inconsistent with the decision in the Kenny case. The Kenny doctrine has been applied uniformly since that decision. Applications have been dismissed in instances involving motor carrier service performed under through airline bills of lading pursuant to a contract with an airline and within the published terminal area of the airline;11 or the Kenny case has been distinguished where the proposed operations were not to be performed under a through bill of lading or involved movements beyond the limits of the airline terminal area, thus requiring operating authority from this Commission, 12 10 At the time the Kenny case was decided, the C.A.B. ordinarily used as a rule of thumb for determining the reasonableness of airline terminal areas a radius of 25 miles from the cities served by the air carrier filing with it tariffs offering terminal services. Except for major air traffic points such as New York and Chicago, it has continued to limit air carrier terminal areas to such a 25-mile radius. 11Commodity Haulage Corp. Common Carrier Application, 69 M.C.C. 527, and Scari Extension-Airports, 76 M.C.C. 319, 323. 12 Gromand Common Carrier Application, 72 M.C.C. 257; Southern Pacific Transport Co.-Air Freight, 73 M.C.C. 345, 346; Fischer Common Carrier Application, 83 M.C.C. 229; and Scari, cited in footnote 11. In the Scari case, division 1 held that Philadelphia, Pa., and Wilmington, Del., (each served by its own airport) were not within the same terminal area, and therefore the transportation proposed there in was not within the partial exemption of section 203(b)(7a). 95 M.C.C. In Panther Cartage Co. Extension-Air Freight, 88 M.C.C. 37 (decided October 4, 1961), we confirmed the doctrine of the Kenny case and extended it to cover air freight forwarders, which are defined and classified as indirect air carriers. 13 We found there that where an indirect air carrier handles the line-haul air transportation, the proposed motor transportation of property in order to come within 203(b)(7a) exemption must be confined to the transportation, in bona fide collection, delivery, or transfer service, of shipments which have been received from, or will be delivered to, an air carrier as a part of a continuous movement under a through air freight forwarder bill of lading covering, in addition to the linehaul movement by air, the collection, delivery, or transfer service performed by the motor carrier. It was also held that where the involved shipments move under the bill of lading of an air freight forwarder, the collection, delivery, or transfer service must be confined to such points named in the indirect air carrier's terminal area tariffs as are within the terminal area tariff of the direct air carrier actually performing the air portion of the linehaul movement. 14 We have always considered in a different light emergency motor transportation performed as a substitute for transportation by air. It was found in the Graff case, supra, that the transportation of passengers performed sporadically, in emergency situations arising from the inability of the air carrier to provide air service due to adverse weather conditions, equipment failure, or the like, was incidental to transportation by aircraft, even though the operations might be conducted between airports as much as 200 miles apart. Division 5 made the following comment on this type of operation, 48 M.C.C. at 315-16: Clearly the operations here involved are interterminal and intercity line-haul operations but they are unusual and different from ordinary connecting-carrier line-haul operations in certain respects. Connecting-carrier line-haul motor operations are complementary to air-transportation services with which they connect and are conducted regularly as a part of through interline service. In contrast the operations here involved, though line-haul, are sporadic and irregular in point of time and emergency in character. They are furnished at the airline's expense and serve as a substitute for impossible or impracticable air transportation and not as a complement to regular air service. They are clearly 13 Air Freight Case, 9 C.A.B. 473, and 14 CFR 296.2(a). 14Our conclusions in the instant proceeding, as will be noted later herein, differ in certain respects from those of the Panther case. subordinate to the regular air service; a necessary result or adjunct of it, without which, or its equivalent in some form, maintenance of regular air service would be more hazardous if not wholly impracticable on many occasions. In applications decided since the Graff case 15 the Commission has consistently applied the doctrine of that case without modification. As recently as the Panther decision, supra, the Graff holding was reaffirmed, and that portion of the Panther application for authority to perform operations which are emergency in character was dismissed as being within the partial exemption of section 203(b)(7a) of the act. Also pertinent to the issues here before us is the decision of the Court of Appeals for the District of Columbia in City of Philadelphia v. Civil Aeronautics Board, 289 F. 2d 770, hereinafter called the Flying Tiger case, in which the court upheld a decision of the C.A.B. which had found that a proposed operation of Flying Tiger Air Line would as to the airline itself constitute air service at Philadelphia in spite of the fact that it did not intend to utilize the Philadelphia airport but, instead, to serve that city through the use of motor service from the Newark, N. J., airport, about 90 miles away. Although the petitioner, City of Philadelphia, had expressly agreed at a prehearing conference that the case should proceed on the the basis that the airline was conducting its trucking operation (between Philadelphia and the Newark Airport) under lawful authority, it raised the issue on appeal that the motor carrier portion of the proposed operation did not qualify as partially exempt under section 203(b)(7a) of the Interstate Commerce Act. Assuming without deciding whether such a question could be raised in view of the agreement at the prehearing conference, the court thought that the C.A.B. adequately and correctly disposed of it in its order when it said: Philadelphia makes the subsidiary argument that the Philadelphia-Newark truck haul is subject to the jurisdiction of the Interstate Commerce Commission. Our finding goes no further than that Flying Tiger Lines' proposed service will, as to it, constitute air transportation and that in rendering service to the airports proposed Flying Tiger Lines will be fulfilling its obligations under its certifi 15 See Michaud Common Carrier Application, 73 M.C.C. 677, and Fischer Common Carrier Application, supra. Although Graff was not cited in the Fischer decision, the rule first applied in Graff was stated at 83 M.C.C. 234 as controlling when adverse weather conditions prohibit air service between Galion and Cleveland, Ohio. cate. We are not asserting jurisdiction over the motor carrier as an air carrier nor are we determining the status of the truck operation under the Interstate Commerce Act. Whether the Philadelphia-Newark truck haul should be considered as incidental to air transportation within the meaning of the Interstate Commerce Act, and thereby exempt from economic regulation of that statute, is a matter for the Interstate Commerce Commission. We do not intend that our action here should influence what that decision should be. If the Commission should conclude under the standards normally applied by it that the truck operation is not exempt, the trucker must have and obtain the requisite I.C.C. authority in order for Flying Tiger Lines to operate in the manner it proposes. JURISDICTION Certain parties, including the direct air carriers, air freight forwarders, and unregulated motor carriers specializing in ground movements of airfreight, contend that this Commission is without jurisdiction to enter an order or rule defining generally motor transportation "incidental to transportation by aircraft" as set forth in section 203(b) (7a) of the act, or to prescribe by regulation limits to the areas in which the exemption applies. They argue (1) that this section is a positive and self-defining legislative directive, imposed by section 1107(j) of the Civil Aeronautics Act of 1938, to protect the jurisdiction of the C.A.B. in the regulation of transportation by air, (2) that any limiting interpretation which we may place upon the partial exemption might serve to thwart the C.A.B. in carrying out its congressional directive to develop airfreight service, and that at any rate, the C.A.B. could defeat such action by this Commission merely by amending the airlines' certificates in order to permit service at points found by us to be beyond the scope of the exemption, (3) that the instant proceeding creates a direct conflict with the C.A.B.'s pending rulemaking proceeding, (4) that the intent of Congress as expressed in the Civil Aeronautics Act of 1938 and the Federal Aviation Act of 1958, and most particularly in sections 101(20) and (21), 102, 403(a), 404, and 412(a) of the latter to place in the C.A.B. sole jurisdiction to regulate air transportation and surface transportation performed in connection therewith, and (5) that the congressional intent, as it is interpreted by these parties, is fully justified, as is evidenced by the C.A.B.'s action in the Flying Tiger decision, supra, which would be nullified were this Commission to assume jurisdiction over the motor operation between Philadelphia and Newark and deny to the airline the right to provide such service without motor carrier operating authority. The Air Freight Forwarders Association contends that in view of the fact that section 203(b)(7a) of the act |