Local service carrier

Local service carriers, or local service airlines, originally known as feeder carriers or feeder airlines, were a category of domestic airlines in the United States, as regulated by the Civil Aeronautics Board, the federal agency that tightly regulated the airline industry from 1938 to 1978.
Initially 23 such airlines were certified from 1943 to 1949 to serve smaller US domestic markets unserved/poorly served by existing domestic carriers, the trunk carriers, which flew the main, or trunk, routes. However, not all of these started operation and some that did later had their certificates withdrawn. One other carrier was certificated in 1950 as a replacement. "Feeder airline" alludes to another purpose, that such airlines would feed passengers to trunk carriers. It was expected that a significant number of passenger itineraries would involve a connection between a local service carrier and a trunk carrier.
Local service carriers ultimately became substantial carriers in their own right, all such carriers flew jet aircraft by the end of the regulated era. Over time, local service carriers began to compete more directly with trunk carriers. But a clear distinction, visible in financial and operating data, continued to exist between the two types of domestic carriers through the end of the regulated era, reflecting a difference in how the CAB regulated the two types of carriers. In particular, in contrast to trunk carriers, local service airlines received government subsidies throughout the regulated era. But after US airline deregulation in 1979, the distinction between trunk and local service carriers vanished.

History

Context

The passage of the Civil Aeronautics Act of 1938 put almost all US commercial air transport under the tight control of a newly formed federal agency, the Civil Aeronautics Authority. In 1940, those regulatory functions passed to another federal agency, the Civil Aeronautics Board. With the exception of intrastate airlines, only airlines certificated by the CAA/CAB could engage in scheduled air transport. Airlines that could show they were flying scheduled service before the passage of the 1938 Act were entitled to certification by grandfathering. 19 domestic passenger airlines were certificated in this way. The 16 of these that continued to operate after World War II were called the trunk carriers or trunk airlines. In many respects, the CAB regulated the industry in the interests of the trunk carriers.

Final name	Name at first operation	Name at initial certification	Date of initial certification	Disposition
Pioneer Air Lines	Essair	Essair	5 November 1943	Merged into Continental 1955
Florida Airways	Florida Airways	Orlando Airlines	28 March 1946	Certificate withdrawn 1949
Monarch Air Lines	Monarch Air Lines	Ray Wilson, Inc.	28 March 1946	Merged into Frontier 1950
Challenger Airlines	Challenger Airlines	Summit Airways	28 March 1946	Merged into Frontier 1950
Empire Airlines	Empire Airlines	Empire Airlines	22 May 1946	Merged into West Coast 1952
West Coast Airlines	West Coast Airlines	West Coast Airlines	22 May 1946	Merged into Air West 1968
Pacific Air Lines	Southwest Airways	Southwest Airways	22 May 1946	Merged into Air West 1968
E.W. Wiggins Airways	E.W. Wiggins Airways	E.W. Wiggins Airways	13 June 1946	Certificate withdrawn 1953
Central Air Lines	Central Air Lines	Central Air Lines	14 November 1946	Merged into Frontier 1967
Texas International Airlines	Trans-Texas Airways	Aviation Enterprises	14 November 1946	Merged into Continental 1982
North Central Airlines	Wisconsin Central Airlines	Wisconsin Central Airlines	19 December 1946	Merged into Republic 1979
Parks Air Lines	Parks Air Lines	Parks Air Transport	19 December 1946	Merged into Ozark 1950
Mid-West Airlines	Mid-West Airlines	Iowa Airplane Company	19 December 1946	Certificate withdrawn 1952
Piedmont Airlines	Piedmont Airlines	Piedmont Aviation	4 April 1947	Merged into USAir 1989
Southern Airways	Southern Airways	Southern Airways	4 April 1947	Merged into Republic 1979
		Air Commuting	7 May 1947	Never operated: certificate expired
Lake Central Airlines	Turner Airlines	Roscoe Turner Aeronautical Corporation	3 September 1947	Merged into Allegheny 1968
		Yellow Cab Company of Cleveland	3 September 1947	Never operated: certificate expired
Arizona Airways		Arizona Airways	13 February 1948	Merged into Frontier 1950
Allegheny Airlines	All American Airways	All-American Aviation	19 February 1948	Sold to America West 2005
Mohawk Airlines	Robinson Airlines	Robinson Aviation	19 February 1948	Merged into Allegheny 1972
		Island Air Ferries	19 February 1948	Never operated: certificate expired
Bonanza Airlines	Bonanza Airlines	Bonanza Airlines	15 June 1949	Merged into Air West 1968
Purdue Aeronautics Corporation	Purdue Aeronautics Corporation	Purdue Aeronautics Corporation	28 July 1949	Stopgap service only
Ozark Air Lines	Ozark Air Lines	Ozark Air Lines	28 July 1950	Merged into TWA 1986

Essair and the Local Service case

In November 1943, the CAB certificated Houston-based Essair to fly feeder routes in Texas, the first airline to be certificated to fly domestic passengers since the grandfathering of the trunk carriers. Essair started feeder service on 1 August 1945 on a route from Houston to Amarillo, Texas via many intermediate points. The CAB regarded this as an experiment so Essair's certification was temporary. The airline would need to renew its certificate in three years.
In the meantime, prompted by the Essair certification, the CAB initiated a case, published July 1944, to consider local air service nationally. Politicians, business groups, would-be airlines and others pushed for such airlines, although the CAB and the post office were "not enthusiastic." By January 1944, the CAB had received 435 applications by would-be feeder airlines. The Board saw itself obligated by the 1938 Act to expand air service to smaller markets. The Board was not confident feeder service could be provided on a cost-efficient basis by the trunks, therefore the CAB decided to certificate new carriers, with the idea they would become specialists in serving small routes efficiently. By giving them temporary certificates, the increased subsidies for providing local service was also theoretically temporary. The CAB may also not have wanted to risk the progress trunk carriers made in evolving towards subsidy-free operation.

Certificating new feeder airlines

Even before it published its local service findings, the CAB launched a series of cases to certificate new feeder carriers across the contiguous United States. The CAB separately certificated "territorial" airlines for Hawaii and Alaska which, at the time, were territories not states. 14 feeder cases completed during the timeframe 1946–1949, awarding an additional 22 new entities feeder service certificates covering most of the contiguous United States. These certificates were temporary and conditional. Successful local service applicants had to demonstrate access to the funding they claimed to have, and that a sufficient number of airports had necessary infrastructure to handle commercial service.
Cases could take well over a year, sometimes longer, to decide typically had over a dozen applicants and other participants, public hearings, an initial finding by an examiner, followed by the decision of the full five-member Board. Each case usually certificated one or more new local service carriers and might also allocate longer routes in the same region to trunks. For instance, the March 1946 decision in the Service in the Rocky Mountain States Area case certificated two new feeder lines splitting local routes across Montana, Wyoming, Colorado, Utah and New Mexico, while awarding additional routes in the same region to Western Air Lines and Inland Air Lines, two trunk carriers. Some airlines won routes in multiple cases. Parks Air Lines, for instance, won routes in three. One later case allocated routes only to feeders previously certificated in earlier cases. A cleanup case re-awarded routes to Southern Airways that the CAB was not confident had been properly awarded previously. CAB decisions could be challenged in Federal courts and some feeder certifications were. The CAB did not distribute route authorities to feeders equally. The size of the Parks Air Lines network was over eight times the size of the Florida Airways network, for instance.
Among successful applicants, All-American Aviation was unique because it already had CAB-certification. The CAB certificated All American for “pick-up” service in 1940 – All American picked up mail without landing through use of a device to hook mailbags in flight. This certification was de-novo, rather than grandfathered, but valid only for mail and freight.