A round for Continental

Continental Airlines won the latest round in its battle with Pan American World Airways for the Saipan-Japan route when the US Civil Aeronautics Board made another recommendation in its favour in a 3-0 vote, with two members

abstaining.

But whether Continental, or PAA, will get the route, is another matter. As alloca tion of the route Involves flights to a foreign nation, the final decision rests with President Ford who, at the time of the CAB vote, was locked in a battle with former film star, Ronald Reagan, for the Republican Party’s presidential nomina tion, and had little time for anything else.

The last time President Ford received a recommendation from the CAB in favour of Continental, he told the CAB to have another look at it. He wanted more infor mation about the viability of the service, and directed the Transportation Depart ment to prepare a report for the CAB.

The board said it again recommended Continental because there was little incen tive to encourage Japanese tourists to travel to US territories. That was par ticularly true because JAL was already fly

ing from Japan to Guam, and Saipan traf fic would, in part, be diverted from JAL’s existing Guam service.

“Indeed, a decision not to authorise a US flag service will, in all likelihood, effec tively deprive the Marianas and the rest of the Trust Territory of any direct service to Japan”, the CAB reported.

President Ford had asked the CAB to consider the Japanese Government’s possi ble concern over the designation of a new carrier (Continental) for the route, and whether the service would make money.

PAA is a major trans-Pacific airline, and competes with JAL on Japan-Guam flights. Continental does not serve Japan.

The CAB in its latest recommendation, rejected a claim by PAA that giving the service to Continental would divert $3.7 million in much-needed income from PAA. The CAB estimated the diversion at $1.5 million and said it would not seriously weaken PAA.

It is understood that Continental’s already extensive interests in the area was a major factor in the CAB decision. Con tinental claimed to have invested more than $32 million in its Micronesia air ser vices and related hotel operations.