Why does not Boeing/Airbus start their own commercial flight operations?

The U.S. Post Office began using airplanes to move the mail in order to help establish an air transportation system.

The new field of air transportation was risky business. Early airlines proved unprofitable - they flew and then folded. The airline industry could not get off the ground.

So as it had with stagecoaches, steamships, and railroads, the federal government stepped in to foster a new transportation system. It authorized the U.S. Post Office to begin flying the mail. In 1918 the vision of Postmaster General Albert Burleson and Second Assistant Postmaster General Otto Praeger became a reality with the creation of the U.S. Air Mail Service.

To demonstrate the potential of transporting mail by air, the Post Office approved a special air mail flight as part of the festivities at an international air meet on September 23, 1911, on Long Island, New York.

 

(Earle Ovington flew a Queen airplane on his brief air mail flight in 1911. The Queen was based on the popular Blériot monoplane design. Surprisingly, it was not a Wright Brothers design!)

Postmaster General Walter Brown helped draft legislation to reform the way airlines were paid, streamline the nation’s air routes, and encourage airline growth and innovation.

The most important architect of the nation’s passenger airline industry, Walter Brown believed that the large holding companies created by the wave of airliner mergers could provide the economic clout to develop the industry, boost passenger travel, and reduce government subsidies.

Brown helped draft the McNary-Watres Act of 1930, which changed how airlines were paid and made subsidies more fair, redrew the nation’s air route system, and provided economic incentives to encourage airlines to carry passengers.

Walter Brown reformed the air mail system in four ways:

 

• By exchanging 4-year air mail contracts for exclusive 10-year route certificates, Brown gave airlines long-term stability while allowing the Post Office to reduce its payment rates each year.
• By extending the route network while reducing the payment rates, Brown tripled air route mileage at no extra cost to taxpayers.
• By providing bonuses for technological improvements, Brown encouraged the creation of larger, faster, safer, and more efficient passenger airliners.
• By basing payments on space available in aircraft, rather than on the weight of mail carried, the Post Office was able to spread its payments more equitably among all air mail carriers.

Walter Brown met with airline leaders in May 1930 to implement the newly enacted McNary-Watres Act. When consensus could not be reached, he determined routes and airline territories himself.

To ensure the survival of well-run passenger airlines, Brown encouraged them to merge with air mail lines-a move that saved many airlines from extinction during the Depression. He forced other mergers in the interest of efficiency and excluded small, marginal carriers. Critics later labeled these meetings the “Spoils Conferences”.

To fly the new central air mail route, Transcontinental Air Transport merged with part of Western Air Express to form Transcontinental and Western Air (T.W.A.).

American and T.W.A. competed with Boeing Air Transport and National Air Transport, which combined to begin transcontinental service in 1930 and later became known as United Air Lines.

Continue to read the facinating history of the US Air Mail and how it eventually led to the separation of airlines and aircraft manufacturing companies:

America by Air

Charles Lindbergh’s historic 1927 transatlantic flight and a stock market boom spurred investor interest in aviation. An intense period of industry-wide mergers and consolidation followed.

Four large aviation holding companies soon arose. William Boeing and Frederick Rentschler of Pratt & Whitney formed the first and the largest, United Aircraft and Transport Corporation. Clement Keys formed North American Aviation and the Curtiss-Wright Corporation. Aerial photography pioneer Sherman Fairchild, Averill Harriman, and Robert Lehman created The Aviation Corporation (AVCO).

Aircraft builder William Boeing, Philip Johnson, Claire Egtvedt, and Eddie Hubbard created Boeing Air Transport (B.A.T.) in 1927 to fly the mail from Chicago to San Francisco. This picture shows the B.A.T. logo. B.A.T. was so successful that it acquired Pacific Air Transport. By 1931 these two airlines, along with Varney Air Lines and National Air Transport, were operating as United Air Lines.

 

In February 1934, the Air Corps again began carrying the mail. Flying in the worst winter in decades, in ill-equipped aircraft, Air Corps pilots suffered a series of well-publicized accidents, mostly during training. Several pilots died. Public outcry caused President Roosevelt to suspend the Air Corps’ mail service until improvements could be made.

This cartoon published in Aero Digest reflected popular opinion that President Roosevelt should suspend Air Corps mail services until safety for air mail pilots could be improved.

 

 

The Air Mail Act of 1934

Four months after the air mail crisis began, Congress passed the Air Mail Act. It cut payment rates to airlines, returned most air mail routes to the major airlines, and gave some routes to smaller airlines. It divided regulation among the Post Office, Commerce Department, and Interstate Commerce Commission.

Aviation holding companies were dissolved and airlines separated from aircraft manufacturers. Previous air mail contractors had to change their names or restructure. American Airways became American Airlines. Eastern Air Transport became Eastern Air Lines.

The Air Mail Act of 1934 broke up the large airline holding companies and forced the firing of airline executives wrongfully accused of conspiring to monopolize the air mail.

In 1927, airplane pioneer William Boeing founded his own airline, Boeing Air Transport, and began buying other airmail carriers. Within four years, Boeing’s holdings grew to include airlines, airplane and parts manufacturing companies, and several airports. In 1929, Boeing merged his company with Pratt & Whitney to formUnited Aircraft and Transport Corporation (UATC). In March 1928, Boeing Air Transport, National Air Transport, Varney Airlines and Pacific Air Transport combine as United Air Lines, providing coast-to-coast passenger service and mail service. It took 27 hours to fly the route, one way.

Following the Air Mail scandal of 1930, the Air Mail Act of 1934 banned the common ownership of manufacturers and airlines. UATC’s President Philip G. Johnson was forced to resign and moved to Trans-Canada Airlines, the future Air Canada. UATC was broken into three separate companies. UATC’s manufacturing interests east of theMississippi River became United Aircraft (the future United Technologies), while its manufacturing interests west of the Mississippi became Boeing Airplane Company. The airline interests became United Air Lines.