Texas Aeronautics Com'n v. Braniff Airways, Inc.

• Decision Date: 13 May 1970
• Docket Number: No. B--1552,B--1552
• Citation: 86 P.U.R.3d 1,454 S.W.2d 199
• Parties: The TEXAS AERONAUTICS COMMISSION et al., Petitioners, v. BRANIFF AIRWAYS, INC. et al., Respondents.
• Court: Texas Supreme Court

Page 199

454 S.W.2d 199

86 P.U.R.3d 1

The TEXAS AERONAUTICS COMMISSION et al., Petitioners, v. BRANIFF AIRWAYS, INC. et al., Respondents.

No. B--1552.

Supreme Court of Texas.

May 13, 1970.

Rehearing Denied June 17, 1970.

Crawford C. Martin, Atty. Gen., Thomas F. Sedberry, Asst. Atty. Gen., Austin, Matthews, Nowlin, MacFarlane & Barrett, Herbert D. Kelleher, San Antonio, Jacobsen & Long, Austin, Gates, Talbot, Morris & Merrell, Los Angeles, Cal., for petitioners.

Clark, West, Keller, Clark & Ginsberg, Dallas, Tex., Herbert Kelleher, San Antonio, McGinnis, Lochridge, Kilgore, Byfield, Hunter & Wilson, James W. Wilson, Clark, Thomas, Harris, Denius & Winters, Donald S. Thomas and Barry Bishop, Austin, for respondents.

REAVLEY, Justice.

The Texas Aeronautics Commission on February 20, 1968, approved the issuance of a certificate of public convenience and necessity authorizing Air Southwest Co. to provide intrastate air service between Dallas/Ft. Worth, Houston and San Antonio. Braniff Airways, Inc., Continental Airlines, Inc., and Trans-Texas Airways, Inc. initiated this action in the Travis County District Court to stop issuance of the certificate by the Commission. Air Southwest intervened on the side of the Commission. Following a seven weeks trial, that court sustained all of the contentions of Braniff et al., set aside the order of the Commission and enjoined it from issuing a certificate to Air Southwest. The court of civil appeals affirmed the judgment of the trial court. 439 S.W.2d 699. The Texas Aeronautics Commission and Air Southwest Co. are petitioners here.

By its application to the Commission, Air Southwest proposes to operate four Lockheed Electra aircraft between the three named airports and, initially, to schedule eight flights per day between Dallas/Ft. Worth and Houston, four flights per day between Houston and San Antonio, and six flights per day between San Antonio and Dallas/Ft. Worth. These flights are to be scheduled on weekdays during the hours between 7 a.m. and 7 p.m., with as many departures as possible between 7 and 9 a.m. and between 4 and 7 p.m. The three routes to be served by Air Southwest are currently served by the following airlines, all holding certificates from the Civil Aeronautics Board acting under the Federal Aviation Act: Dallas/Ft. Worth-Houston by Braniff and Trans-Texas; Dallas/Ft. Worth-San Antonio by American Airlines, Braniff and Trans-Texas; and Houston-San Antonio by American Airlines, Eastern Airlines, Braniff, Continental and Trans-Texas.

In all matters of flying safety, such as the air worthiness of the aircraft and the skill of its operators, Air Southwest would be regulated by the Federal Aviation Agency. All Air Southwest aircraft and pilots would have federal certificates. However, by flying only in intrastate commerce and by not interlining with any CAB certificated carrier, making no connection for passengers or baggage, Air Southwest will not require a certificate from the federal agency in charge of economic regulations, the Civil Aeronautics Board. Congress has not pre-empted the field of the economic regulation of air carriers, and the states have the power to act so long as there is no conflict with federal law. 49 U.S.C.A. § 1301(3) and (10), and § 1371; Western Air Lines Inc. v. California, 42 Cal.2d 621, 268 P.2d 723 (1954), cert. denied, 348 U.S. 859, 75 S.Ct. 87, 99 L.Ed. 677; See Island Airlines, Inc. v. C.A.B., 331 F.2d 207 (9th Cir. 1964); Island Airlines, Inc. v. C.A.B., 363 F.2d 120 (9th Cir. 1966); Comment, 47 Texas L.Rev. 275 (1969). A copy of the Air Southwest application was served upon the CAB, as required by the rules of the Texas Aeronautics Commission, but the CAB has taken no part in the matter.

SUBSTANTIAL EVIDENCE REVIEW

The Commission has acted under the Authority of Art. 46c--6, sub. 3, Vernon's Anno.Texas Civil Statutes, which has since 1961 provided, ¹ in part:

'As to the economic regulations promulgated, the Commission shall take into account the financial responsibility of the carrier, the public convenience and necessity for the proposed service, routes, proposed rates or charges, the effect on existing carriers, and any other factors bearing a relation thereto and pertaining to the public interest and necessity.'

The statute further provides that after final determination by the Commission any interested party may appeal to the state court and 'shall be entitled to a trial de novo on all facts and circumstances involved in such matter.' In accordance with long precedent, the words of the statute are taken to rpovide for the usual judicial review of administrative orders by which it is the court's responsibility to determine if that order is reasonably supported by substantial evidence. Fire Department of City of Fort Worth v. City of Fort Worth, 147 Tex. 505, 217 S.W.2d 664 (1949).

The CAB carriers (Braniff, Trans-Texas and Continental) contend that the court need only examine the present services afforded by them to these cities and, upon finding those services to be adequate, conclude the case in their favor. They argue that there is no need to look at the effect the proposed service by Air Southwest would have upon passenger traffic or upon the state. The court of civil appeals based its decision on the proposition that it was 'bound by the law of Stare decisis with respect to what the law requires a prospective carrier to prove before it can enter into competition over a given route with presently certified carriers.'

The statute governing the regulation of air carriers does not specifically require the Aeronautics Commission to determine that existing services are inadequate prior to the granting of a new certificate. This is the statutory duty of the Railroad Commission prior to its issuance of a certificate for a motor carrier. Art. 911b, § 5a(d), V.A.C.S. From the beginning of the legislative declarations with respect to the licensing of motor carriers, the Railroad Commission has been directed to conserve the highways of the state by not burdening them with more trucks and busses than are necessary. Bailey, Motor Trucks Certificates and Permits in Texas, 20 Texas L.Rev. 165 (1941).

Whether named in the statute or not, adequacy of existing service is always an important consideration in determining public need for additional service. See Benson v. San Antonio Savings Association, 374 S.W.2d 423, 427 (Tex.Sup.1963). However, in this context 'adequacy' should not be taken to denote bare sufficiency. The existing air service, for example, could be inadequate even though anyone with the fare is presently able to obtain passage. If it can be said that the public need does not ordinarily require a new service where existing service is adequate, it can also be said that the public need would ordinarily require that new service which will substantially improve existing service.

The decision as to where the public interest lies and what air service is best for Texas must be made by the Texas Aeronautics Commission. The courts may not make this decision for the Commission, nor may we set ourselves to analyze the Air Southwest market projections in order to decide for its investors the profitability of their venture. The Commission has decided the disputed contentions as to the public interest in favor of Air Southwest; we may interfere with that decision only if there is no reasonable support for it in the judicial record.

After studying this lengthy record with the extensive presentation made by each side, we cannot say that a decision either to grant or deny the application would be unsupported by substantial evidence. We will summarize the reasonable support we find here for the Commission's order.

POOR PERFORMANCE BY EXISTING CARRIERS

We have the CAB records of the time performance of all flights scheduled on two of these routes in 1967. The record is not a good one.

On the Dallas/Ft. Worth-Houston route in 1967 Braniff canceled 471 flights and arrived late by CAB standard (at least 15 minutes behind schedule) on 2,477 flights. In the same year Trans-Texas canceled 189 flights and arrived late with 844 flights. Of all the flights by these two existing carriers, 27.32% Were either late or canceled. In the month of December, 1967, Trans-Texas arrived on time with only 43% Of its flights.

On the Dallas/Ft. Worth-San Antonio route Braniff has an effective monopoly. Trans-Texas cannot fly non-stop between these cities. American can do so only as the leg of a flight to Mexico, and it has only one flight each way daily. On this route in 1967 Braniff canceled 202 flights and was late on 1,748 occasions. Of all scheduled flights, 28.26% Were either late or canceled.

It is significant that these late arrivals were much more common on the southbound flights than on the northbound flights. Braniff flights from Dallas/Ft. Worth to San Antonio were late on 31.78% Of the trips as compared with 18.45% Late flights in the other direction. From Dallas/Ft. Worth to Houston 31.83% Of Braniff flights were late, while only 14.27% Of the northbound Braniff flights were late. The Braniff southbound flights usually originate in distant cities such as Denver, Chicago, Kansas City, or New York and are subject to weather and traffic delays in those areas. Air Southwest insists that it can assure better schedule compliance by being subject only to Texas weather problems and by being free of the problems of other areas. The 1967 performance...