Supplemental air carrier

Supplemental air carriers, until 1955 known as irregular air carriers, and until 1946 as nonscheduled air carriers or nonskeds, were a type of United States airline from 1944 to 1978, regulated by the Civil Aeronautics Board (CAB), a now-defunct federal agency that then tightly controlled almost all US commercial air transport. From 1964 onward, these airlines were just charter carriers, but until 1964 they had limited but flexible ability to offer scheduled service, making them hybrids. In some ways they were the opposite of what the law then said an airline should be. Airlines then required CAB certification, but over 150 nonskeds exploited a loophole to simply start operating. The CAB determined where certificated carriers flew and what they charged. For the most part, irregular carriers flew where they wanted and charged what they wanted. CAB-certificated passenger carriers almost never died (the CAB preferentially awarded desirable routes to weak scheduled passenger carriers and if they got in serious trouble the CAB let them merge with a stronger carrier) but over 90% of supplementals did.

The legacy of supplemental air carriers includes coach class (all US air travel was first class before the nonskeds) and a share of the credit for inspiring 1979 US airline deregulation. Such carriers made little impact on the US airline system after deregulation and no former supplemental carrier survives, the last being World Airways which ceased operation in 2014. All original US scheduled cargo airlines (such as Flying Tiger Lines) also started as irregular airlines. The term "supplemental" was replaced with "charter" in the Airline Deregulation Act of 1978, but survives in the regulations of the Federal Aviation Administration (FAA) (US airlines are dual certificated, with economic certification by the Department of Transportation (as successor to the CAB) and operational certification by the FAA).

The market share of supplementals was small (see Graph 1), but the carriers attracted much attention during the regulated era ending 1978:

  • They offered low fares and competition in a system of high fares and little competition, providing a small amount of relative freedom in an otherwise tightly regulated regime.
  • US scheduled carriers constantly railed against the supplementals as a threat (although once regulations were relaxed the scheduled carriers quickly overcame the supplementals).
  • IATA (International Air Transport Association), then an international airline cartel, spent the 1960s/1970s fighting supplementals on the North Atlantic.
  • Supplementals operated on the edge of legality:
    • Up through the 1950s, some flew scheduled service well beyond what regulations permitted, some in open defiance of the CAB, earning an outlaw reputation.
    • Charters captured over 30% of the transatlantic market in the 1970s. Regulations made it hard to access charters. Some consumers lied to qualify for low fare charters. When CAB enforcement agents detected this, they prosecuted the supplementals.
  • Prominent personalities were connected to supplementals. For example:
  • Spies owned one: in 1973 the CIA was exposed as owning supplemental Southern Air Transport.
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