Pan Am v. Am Ex

The entire air fleet of American Export Airlines is one twin-engined Consolidated flying boat. Early this week this boat was ready to rise from Lake Pontchartrain's dirty waters, point its nose southward over the green Gulf of Mexico. To outsiders it was the first Government-approved flight across the Gulf, and it presaged triweekly air service between New Orleans and Central America over a new short-cut route. But to insiders it was the bell for Round II of one of the hottest industrial fights since Harriman v. Hill. The fight: American Export v. Pan American.

American Export was just a good ocean shipping line until it set up its airlines subsidiary in 1937. resolved to fly the Atlantic. This made it a natural enemy of Pan Am. Round I ended in the Senate corridors last September when the Appropriations Committee unexpectedly failed to provide $500,000 that was to start Am Ex's preliminary mail flights to Lisbon (TIME, Oct. 14). Last week, undaunted Am Ex officials rolled with this punch. Led by quick-smiling, deep-voiced Vice President James Murchie Eaton, they went to Baltimore, threw a party aboard their new ocean freighter S.S. Executor. While 60 guests ogled the boat, Am Ex bigwigs huddled with Baltimore's Mayor Jackson, trying to solve another problem: a U. S. landing place for their would-be airline. Because New York's North Beach Airport (where Pan Am's Clippers roost) is already overcrowded, Am Ex cannot base there. Mayor Jackson stayed aboard three hours, left after assuring Am Exers they could start Baltimore-Lisbon flights whenever ready.

But the main bout was on the Central American front, where Am Ex bought the Central American line TACA. Pan Am wasted no time in attacking there too. As much at home in palaces as clouds, Pan Am persuaded tough, handsome General Jorge Ubico, Guatemala's Dictator-President, to let it fly in his country, hitherto a TACA demesne. Pan Am immediately formed Aerovias de Guatemala, put big, heavyset, American-born Alfred Denby in charge. Fortune-hunter Denby owns Guatemala's biggest butcher shop, rates high with General Ubico. This month Aerovias, which has been conducting survey flights with sleek Pan Am Douglas DC25, will begin competing with TACA's rebuilt, cratish "Tin Geese" (trimotored Fords).

Thus weakened in Guatemala, TACA lost more face in Costa Rica when one of its planes, on an unscheduled flight, whanged into a mountainside, killing the pilot and five passengers. Hoping the plane had merely made a forced landing in a deserted spot, TACA withheld news of its lateness for several hours. Next morning the San Jose Tribuna printed a scathing editorial, hinted some might have been saved if TACA had reported the missing plane sooner. To make matters worse, TACA's dapper lawyer, Jean La Baron, who constantly puffs on long, thin cigars, was quoted by Costa Rican newsmen as saying: "American Export Airlines has the sympathy and backing of the U. S. Department of State . . . [which] will oppose any effort of Pan American to compete with TACA, now an American company." Costa Rican newspapers began beating drums. Was it up to Washington to say who was to fly in Central America?

Still rolling with fate's and Pan Am's blows, Am Ex held to its schedule, last fortnight threw a gay party in New Orleans' famed Antoine's. There to meet city and State officials was New Zealand-born, hard-hitting, one-eyed Lowell Yerex, founder and president of TACA. Purpose of the banquet was to dramatize Am Ex's request to CAB for a New Orleans-Panama route across the Gulf via Guatemala. New Orleans papers, envisioning their city as an international airport, played ball. Next morning the respected Times-Picayune ran a four-column map of the proposed route on page 1, slapped Ubico's picture in the middle, shouted "Greetings to Central America!" The Tribune printed special Spanish supplements.

With 500 copies of each paper piled up behind him, Yerex lifted his twin-engined Lockheed from New Orleans airport at 3:30 a.m., pushed to Guatemala in five and a half hours. Same afternoon he was in San Jose, 24 hours earlier than if he had taken Pan Am's roundabout route from Brownsville, Tex. After delivering the papers to various Central American politicos, Yerex stayed to hobnob with Central American cronies, try to bolster TACA prestige.

This week Am Ex officials plotted new ways to combat Pan Am, hoped for CAB action on the TACA purchase within about a week. Am Ex has the tacit backing of the U. S. War, Navy and State Departments. Pan Am has vast resources, an experienced Washington lobby and the knowledge that TACA's Guatemalan rights, core of the line, will expire next February--unless General Ubico renews them.

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