The Chicago Conference was unable to reach agreement on either of the two major economic issues chasing International Civil Aviation - routes or rates. But many of the senior officers of the major airlines were present in Chicago as Advisors to the Government Delegations and at a meeting immediately after the close of the governmental conference, the airline representatives resolved to establish a worldwide organization of airlines to concern itself with one of these problems. The organization called itself the International Air Transport Association. There was precedent for such a group in the International Air Traffic Association which had functioned between the two world wars - largely made up of European Airlines.
But whereas the inter - war International Air Transport Association concerned itself with such matters as uniformity of procedure and documentation in air transport, as well as problems of liability of carriers to passengers or shippers, the new International Air Transport Association from the beginning had as its major concern the problem of rates. The idea was that shares between the same points must be uniform; that feels between comparable points - sea New York- Paris as against New York- London - must bear of fixed ratio to each other; and that went a voyage included segments formed by several carriers consecutively (weather in the same direction, on a return flight, or in circular route), there should be a fixed formula for apportioning the revenue among them and a clearinghouse for handling the transfer of funds.
International Air Transport Association formally established in April of 1945 at a conference in Havana, Cuba attended by representatives of thirty one Airlines. International Air Transport Association established its headquarters in Montreal, it also of International Civil Aviation Organization. Only scheduled Airlines performing International transportation were eligible for full membership; airlines not engaged in international transportation but desiring to be tied into the interline clearinghouse and technical services of International Air Transport Association was eligible for associate membership. International Air Transport Association has never admitted a non scheduled carrier.
By the mid 1970's, about one hundred Airlines active or associate members of International Air Transport Association, of which twenty to twenty five typically were associate and the remainder full members. Some of the South American Airlines to join International Air Transport Association, in part to be able to undercut International Air Transport Association fares, across the North Atlantic, Icelandic Airlines (Loftleidr) did not join, and regularly offered lower rates, requiring, however, a stop in Iceland and usually a change of planes to the Continent.
The Soviet Airlines Aeroflot did not join International Air Transport Association, but did become a member of the clearing house and adhered to International Air Transport Association fares. According To the International Air Transport Association articles of association any scheduled airline operating under the flag of a state eligible for membership in International Civil Aviation Organization is eligible for membership in International Air Transport Association. While an application for membership requires approval by the executive committee, International Air Transport Association officials emphasized that no carrier meeting the stated criteria had ever been turned down. Thus International Air Transport Association was clearly a trade Association, but not a closed one.
International Air Transport Association has a permanent staff, split between Montreal and Geneva, plus field offices in New York, London, Bangkok, Rio De Janeiro, Singapore and Nairobi. The staff was under the direction of full time Director General - for twenty years Sir William Hildred of England and since 1966 Mr. Knut Hammarskjold (nephew of the former united Nations Secretary General) of Sweden. In addition, International Air Transport Association maintained standing committees for financial, legal, technical, traffic and medical affairs, plus various sub committees and ad hoc bodies. International Air Transport Association also had an enforcement staff to investigate and hear complaints of violation of its resolutions - chiefly rate cutting or rebates.
International Air Transport Association performed its rate making functions through regional traffic conferences, originally nine in number but later reduced to three.International Air Transport Association traffic conferences generally meet jointly - on the theory that all rates were interrelated and were set at one time. Some feelings for the way a meeting of traffic conferences function may be obtained from the address by a former International Air Transport Association official.
International Air Transport Association regulations required a unanimous vote for rate resolutions, subject to approval by governments. Once a fare resolution was adopted, it was binding on all members. An Airline that charged a different fare was subject to enforcement procedures by International Air Transport Association, including a kind of adjudication and penalties for violation. Over the years, fare resolutions covered not only the monetary amount of the fare, but also such items as baggage allowance, the content of the meal, the number of drinks and charges for them, in-flight movies, and the like. While certain surcharges related to equipment - e.g. a jet surcharge - were from time to time included in fare resolutions, International Air Transport Association did not attempt to control by resolution the type of aircraft employed by member carriers. The width of seats and the room between the rows was, however, included in definition of "tourist class", "economy class "etc.
Navin Kumar Jaggi