c vv, u '. So 6 World Survey of Civil Aviation SOUTH AMERICA 9 '«s;?s, lib w' CTA-r-,- "- VAN IA STATE UNIVERSITY ATE COL LEG E , PENNSYLVANIA U.S. DEPARTMENT OF COMMERCE BUSINESS AND DEFENSE SERVICES ADMINISTRATION Digitized by the Internet Archive in 2012 with funding from LYRASIS Members and Sloan Foundation http://archive.org/details/worldsurveyofOOunit World Survey of Civil Aviation SOUTH AMERICA 1962 U.S. DEPARTMENT OF COMMERCE Luther H. Hodges, Secretary Hickman Price, Jr., Assistant Secretary for Domestic Affairs BUSINESS AND DEFENSE SERVICES ADMINISTRATION Daniel L. Goldy, Administrator Transportation Equipment Division Henry C. McCaslin, Director Thomas D. O'Keefe, Assistant Director For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington 25, D.C., or through any U.S. Department of Commerce Field Office. Price 30 cents. Foreword This is the seventh in a series of foreign market surveys of civil aircraft and aeronautical products throughout the world. Previous publications have covered Japan; Africa; Southwest Asia; the Near and Middle East; selected Asian countries and Oceania; and Mexico, Central America, and the Caribbean Area. The series discusses aircraft fleet composition and commercial and general flight operations. Special emphasis is given to market potential, trade and investment opportunities, and competitive factors affecting sales of U. S. aircraft and aeronautical products. Special appreciation is extended to the following members of the U. S. Foreign Service and others at Foreign Service posts abroad who supplied the basic data: Country Contributor Argentina C. P. Nolan Bolivia V. E. Blacque Brazil J. H. Crimmins Chile J. B. Tisinger C. R. Myers J. J. Harter Colombia J. C. Kotun R. B. Allen D. C. Ferguson E. J. Holway, Jr. Ecuador J. E. Karkashian D. P. Banowitz A. P. Shankle G. F. Jones G. Riofrio Paraguay G. A. Ives R. Rueda Peru R. Boniface L. Goelz Uruguay G. W. Landau T. Zafiriadis M. E. Sinn Venezuela C. E. Cobb W. H. McKenney This publication was prepared by Richard E. Cohen, Transporta- tion Equipment Division. Further details on any of the countries discussed herein may be obtained from the Division. Daniel L. Goldy Administrator Business and Defense Services Administration August 1962 Contents Page Foreword iii South America: An Overall View 1 A rgentina 3 Bolivia 12 Brazil 16 Chile 26 Colombia 32 Ecuador 41 Paraguay 47 Peru 52 Uruguay 58 V enezuela 63 U.S. Exports of Aeronautical Products to South American Countries, 1959-61 73 U.S. World Exports of Aeronautical Products, 1959-61 78 South America: An Overall View The 10 South American Republics have a total area of almost 6.7 million square miles, close to twice that of the United States, and a population of more than 138 million. Minerals and petrole- um are abundant. A wide range of agricultural products is grown. A vast hydroelectric power potential exists for industrialization. At present, however, the economies of many of the countries are based on the generally limited production of only a few commod- ities . Economic growth is hampered by geographical factors . The area's rought terrain limits agricultural development and leaves many sections not readily accessible, thus narrowing markets. Good transportation facilities, abundant power, appropriate raw materials, and greater investment capital are vital for competi- tion in the world market. THE ROLE OF AVIATION IN SOUTH AMERICA'S FUTURE Air service is important in South America. Regional special- ization in agriculture, forestry, and livestock raising as well as the long distances between population and industrial centers con- tribute to its importance. The surface transportation systems in many areas are inadequate because of impassable terrain. Lack of funds, outdated equipment, and insufficient repair facilities also limit surface systems. A substantial improvement of transporta- tion, which will take many years, will increase the number of markets and will encourage greater production. Commercial aviation is encouraged by Government ownership or subsidization of airlines. Because of the availability of World War II surplus transport aircraft, the commercial airlines and air taxi operators have expanded operations considerably. How- ever, some companies overexpanded and have collapsed, and many of the surviving ones have been forced to merge. To maintain their competitive position with foreign flag carri- ers, the international carriers are purchasing jet or turboprop equipment; their displaced multiengined piston equipment is being used on expanded domestic and interregional routes. Many air- craft the size of the Douglas DC -3 will continue to be used because of inadequate facilities for larger planes except at the major air- fields. Several regional groups are interested in improving domestic and international transportation services. The Latin American Air Transport Association (Asociacion Latinoamericana de Transportes Aereos— ALT A) , a group of small air carriers or- ganized in 1958, proposes to promote safe, efficient, and eco- 1 nomical Latin American commercial aviation operations in coop- eration with the Governments of the associated enterprises, the Organization of American States, the International Civil Aviation Organization (ICAO), and similar groups. Similar objectives are expressed by the Interamerican Air Transport Confederation (Confederacion Interamericana de Transportes Aereos—CITA), composed of lines not belonging to the International Air trans- port Association (IATA). The Governments and airline companies of the countries are tentatively considering the establishment of a joint company, the Latin American Air Fleet (Flota Aerea Latino Americana— F ALA), which will offer international service. The member states will pool their international equipment and resources. The pooling arrangement is considered to be a desirable long-range solution for meeting international competition. General aviation activities are increasing, especially air taxi, charter, crop dusting, and cargo operations. The light plane industry in Argentina and Brazil, now limited, will probably grow, but not for sometime will it offer significant competition to foreign aircraft. AIRCRAFT IN USE About 6,700 civil aircraft are registered in the South American Republics. More than 5,300 of them are U. S. made. Commercial airlines use more than 850 planes, mostly multiengined transports. The rest are mostly single- engine utility aircraft used in general aviation activities. MARKET POTENTIAL U. S. exports of aeronautical products to the South American Republics were valued at about $46 million in 1961, almost $33 million in 1960, and more than $19 million in 1959. The 1959 shipments followed the downward trend of U.S. world exports of aeronatuical products in that year. In 1959, 352 civil aircraft were exported, valued at $17 million; in 1960, 535 at $29 million; and in 1961, 648 at $42 million. Shipments of aircraft of 30,000 pounds and over, empty airframe weight, increased in value from $4.5 million in 1959 to almost $21 million in 1961. Used com- mercial and civilian aircraft accounted for a considerable portion of the exports in the 1959-61 period. Only utility aircraft, 4 places and more, showed steady growth in this period, increasing from 150 units at $2.9 million to 417 at $8.9 million. The market for U. S. surplus piston- engine transport aircraft is limited because the large number of piston- engine planes dis- placed, by the major airlines' acquisition of jets will meet most of the domestic demand. The large market potential for light and medium utility aircraft is apparent from the U. S. export figures. Aircraft of this type are ideal for serving remote areas in which landing facilities cannot accommodate large aircraft and to which other means of access are not available. U. S. aircraft, parts, and accessories are usually preferred, and U. S. suppliers have the largest share of the market. However, tariffs, surcharges, import and exchange licenses, and advance deposit requirements in many of the countries restrict U. S. sales. Nevertheless, the region's large size, irregular topography, and inadequate surface transportation and communications sug- gest a market potential for more aeronautical equipment. Argentina Argentina has an area of more than 1 million square miles and a population of nearly 20 million. The topography forms three areas: The Andes Mountains in the west, the vast rolling Pampas (plains) in the central region, and the rugged Patagonian Plateau in the south. The major economic activities, in order of im- portance, are agriculture, stockraising, and manufacturing. ROLE OF AIR TRANSPORTATION The role of civil aviation in Argentina differs from that in many South American countries because domestic surface transporta- tion to most areas is satisfactory. Nevertheless, the importance of civil aviation has increased because of the long distances between major domestic industrial and population centers, between the cities and the cattle- raising and agricultural centers, and between Buenos Aires and major cities in other countries. Ocean carriers transport most of Argentina's foreign trade; a small amount is carried by river, rail, and air to neighboring countries. A number of foreign flag airlines carry a major share of international passenger traffic, but all domestic traffic is re- served to Argentine airlines. The Ministry of Aeronautics, which supervises all aviation matters, including public airport construction and maintenance, acts through the National Administration of Civil Aviation (Direc- tion Nacional de Aviacion Civil), which, in turn, acts through the General Bureau of Air Flights and Airports, the General Bureau of Development, Instruction, and Certification, and the National Bureau of Air Transportation. The Government authorizes and encourages the establishment of private airlines and also permits the development of air serv- ices by State enterprises. It operates the major international air- line and authorizes operations of private international companies. Through the Ministry of Aeronautics it encourages aerial work connected with agriculture and livestock, assists flying clubs, and grants franchises for regular commercial air services. In these franchises, provision may be made to subsidize commercial air services on domestic routes which the Government considers to be of national interest. Only the Government airline, Aerolineas Argentinas , receives a subsidy for foreign operations. Argentina is a signatory to the Warsaw Convention (1929), governing conditions of carriage in international air transport; to the Convention on International Civil Aviation, Chicago (1944); and to the International Air Services Transit Agreement, Chicago (1944). It is also a member of the International Civil Aviation Organization (ICAO). Aerolineas Argentinas belongs to the In- ternational Air Transport Association (I AT A). Most of the numerous airports located throughout the country are relatively small. Ezieza Airport at Buenos Aires is the most important of the five which accommodate long-distance interna- tional carrieis. The international airports are used for both com- mercial and private flying. Many interior fields are inadequate for scheduled service, but the Government recently approved an extensive airport development program providing for construction and expansion of approximately 45 of the domestic and interna- tional airports. Air traffic control facilities are being improved, increasing safety. An aviation training center was established in October 1960 in collaboration with the U. S. Government's International Cooperation Administration (now the Agency for International Development). It provides modern facilities for the training of personnel in communications, airport facility maintenance, elec- tronics, air traffic control, safety, technical English, and other subjects. Argentina has only a small aeronautical industry. The Direc- cion Nacional de Fabricaciones e Investigaciones Aeronauticas (DINFIA), an agency of the Ministry of Aeronautics, has directed the assembly and partial manufacture of light aircraft, mostly trainers, since 1932. The actual work is carried out by Fabrica Militar de Aviones (FMA) of the Instituto Aerotecnico (IA), and production has been limited to modest numbers of military, rather than commercial, craft. DINFIA is now producing prototypes of several aircraft of its own design, in addition to the Beech Mentor 34 A and the Morane Saulnier under license. Among local designs are the IA-35, a twin-engine utility monoplane; the IA-46, a single- engine utility plane, similar to the Piper Cub, designed specifically for crop dusting; and the IA-45, a twin- engine execu- tive transport. Engines are produced for the aircraft DINFIA designs, but are imported for the others. Annual production in the past several years has totaled about 125 units. DINFIA also has extensive overhaul and maintenance facilities which are used by the military services. A high-speed delta-wing aircraft and a large 4 -engine tailless monoplane, or flying wing, to be used as a cargo transport are being developed. The first major commercial aircraft manufacturing started in mid- 1960 when Aviones Lockheed- Kaiser Argentina, an equal partnership between Industrias Kaiser- Argentina and Lockheed Aircraft International, was established. Aviones Lockheed- Kaiser is producing the Lockheed CL-402, a single- engine utility transport. An all-metal high-wing monoplane, the CL-402 is powered by 'a 260 hp. Continental engine, has accommodations for 6 passengers or 2 pilots and 1,000 pounds of cargo, and has a cruising speed of 150 mph. Production of about 100 planes a year is scheduled over a 5 -year period, at the end of which the company plans to manufacture a twin- engine plane based on the CL-402. The company has announced that its planes will contain 50 percent Argentine materials in 1961, and 75 percent in 1965. The main imports will be engines, instruments, and other critical components. A new company, AVI, S.A.I.C.yF., has been formed to manu- facture light general-purpose aircraft. Its first aircraft is a multipurpose single-engine monoplane. The Government's pro- tection of domestic manufacturers by preferential import sur- charge treatment is especially important to the light utility trans- port plane industry which is now beginning to develop. A few small firms produce about 15 airframes a year, for which en- gines and other critical parts are imported. Aircraft manufacturing is supervised by the Ministry of Aero- nautics, which approves, rejects, or suggests modification of all production plans and import programs. The Ministry, through the National Administration of Civil Aviation and DINFIA, also has jurisdiction over manufacturing activities to assure that all commitments are met. The Government favors the establishment of an Argentine air- craft industry, but the extent of its participation, so far, has been the subsidization of DINFIA. However, it exempts from import surcharge payments all aircraft manufacturing materials approved by the Ministry of Aeronautics. AIRCRAFT IN USE More than 1,500 of the 1,927 civil aircraft registered in April 1960 were U. S. made. The most popular U. S. makes were Cessna, Ercoupe, Luscombe, Piper, and Aeronca. Other U. S. planes included Curtiss C-46's, Convair 240's, Douglas DC-2's, -3's, -4's, and -6's, and Lockheed Super Constellations. More than 130 aircraft were used by the commercial airlines, and 122 of these were U. S. made. Approximately 900 general commercial and business aircraft were registered; the rest were privately owned. COMMERCIAL AIRLINES Service Although the principal scheduled airlines chiefly provide domes- tic service, some engage in scheduled international operations, and one operates a nonscheduled air cargo service between Buenos Aires and Miami. Aerolineas Argentinas, the country's largest commercial air carrier, is Government owned, operated, and subsidized and has about 40 aircraft. In addition to domestic flights to more than 50 towns and cities, it also offers flights to Uruguay, Brazil, Para- guay, Bolivia, Chile, Europe, and the United States, and plans to offer service to the Near East. In fiscal year 1961 and each of the two preceding fiscal years, Aerolineas received a subsidy to compensate for its deficit. An additional subsidy in fiscal year 1961 was used for payments due on several recently purchased De Havilland Commet IV jet aircraft. Transcontinental, S.A., established in 1956 and the largest of the private airlines, temporarily suspended operations in October 1961. This company operated 9 aircraft: 7 Curtiss Commuters on domestic and regional routes, and 2 Bristol Britannia turbo- props to the United States and Chile. Two Lockheed Super Con- stellations owned by Transcontinental were being leased to other operators. In 1959 Transcontinental received a subsidy for its domestic operations, but it has been in continuous financial dif- ficulty. Reportedly, Sabena Airlines (Belgium) obtained an inter- est in Transcontinental in August 1961. Aerolineas INI & Compania, S.A., started operations in January 1960, offering weekly round trip passenger and cargo service be- tween Buenos Aires and Miami via Chile, Peru, and Panama. Its equipment consists of 1 DC-6, of 90-passenger capacity, and 1 cargo DC-4. In the first quarter of 1960, Aerolineas INI flew more than 203,000 kilometers in slightly less than 700 hours of flight time, transporting more than 4,800 passengers in addition to cargo and mail. Transatlantica, S.A., started operating in September 1960, of- fering three weekly round- trip flights from Buenos Aires to Europe, via Brazil. Its equipment is 3 Lockheed Starliners. Transatlantica' s operations were suspended in November 1961, and it reportedly went into receivership in late December 1961. The following airlines offer only domestic scheduled services. Lineas Aereas del Estado (LADE), organized in 1950, is a sub- sidiary of the Argentine Air Force's Transport Command. It de- velops new domestic airline routes and supplements existing ones. The number of planes operated varies, but the main types are DC-3's and DC-4's. In 1959, LADE traveled more than 830,000 kilometers in 3,200 hours of flight time, transporting more than 10,000 passengers in addition to a substantial volume of cargo and mail. Aerotransporte s Litoral Argentine), S.A. (ALA), and Austral Compania Argentina de Transportes Aereos, S.A, (Austral), re- cently merged. Reportedly, Pan American World Airways, Inc. (PAA), obtained an interest in the merged company and will trans- fer several aircraft to it for use on a route to Patagonia. ALA started operating in March 1957, using 6 DC-3's on services be- tween Buenos Aires and 9 cities in northeastern Argentina. In 1959 it flew more than 1.2 million kilometers in more than 5,500 hours of flight time, transporting more than 27,000 passengers. It has been partly subsidized by the Government. Austral started operating in 1957, offering domestic passenger and cargo flights between Buenos Aires and major cities in the southern part of Argentina, using 6 Curtiss Super 46-C's and 1 Douglas DC-4. It received a subsidy in 1959. In 1959, Austral transported more than 20,000 passengers over 1.4 million kilometers in 4, 800 hours of flight time. Taxis Aereos Argentine* s, S.A. (TAASA), a privately owned car- rier equipped with five 8-passenger De Havilland Dragon Rapides, provides services between Buenos Aires and the cities in Entre Rios Province on the northeastern border. In 1959 TAASA trav- eled almost 197,000 kilometers in about 1,200 flying hours, trans- porting more than 2,900 passengers. Norsur Compania Argentina de Aeronavegacion, C.I. y F.S.A., uses six 14 -seat Lockheed Lodestars for its operations. In 1959 it transported 10,400 passengers, traveling about 970,000 kilo- meters in 4,300 flying hours. It received a subsidy in 1959. Lineas Aereas de Cuyo (LAC), which began operating in Decem- ber 1959, provides services from Mendoza in western Argentina to neighboring cities and to Buenos Aires, using 2 Lockheed Lodestars. Transportes Aereos Buenos Aires, S.A. C.I. (TAB A), a privately owned airline which started operating in August 1959, offers services south from Buenos Aires through the northeastern hump of the country, using 8-seat Beechcraft D-18's. It received a subsidy in 1959, and in that year traveled 107,000 kilometers in almost 380 hours of flying, transporting about 950 passengers. Sociedad Argentina Lineas de Transportes Aereos (SALTA) pro- vides services between two cities in the northern part of Salta Province in northwestern Argentina, using two 6-passenger Cess- na aircraft. Argentine airlines make relatively few all -cargo flights, and none' on a scheduled basis. Austral has operated international nonscheduled cargo flights to various points in the Western Hem- isphere. In 1959 it traveled 33,000 kilometers in 109 flying hours. However, the status of this service since Austral' s recent merger with ALA is not known. Transamerican Air Transport, S.R.L., operates nonscheduled cargo services domestically and on the North American continent, using 2 Curtiss C-46F aircraft. About 20 foreign flag carriers provide additional passenger- cargo flights between Argentina and other countries. Some main- tain regional services in Latin America, but most of the services are long-distance trunk operations between Argentina, North America, and Europe. Disposal and Reequipment Programs Aerolineas Argentinas is authorized to purchase additional equipment. In January 1962, it received the first of 9 AVRO 748 turboprops. These short-to-medium range aircraft will be used on domestic and regional flights. Also in January the airline re- ceived the first of 3 Sud Aviation Caravelle jet aircraft, and has an option for 3 more. These planes will be used over the com- pany's long-range domestic and regional routes. Aerolineas plans eventually to replace all its conventional piston-powered aircraft. Few of these aircraft are expected to be put on the market; the DC-3's and Sandringham's will probably be used as long as pos- sible, then cannibalized. The DC-4's may be sold or retained for cargo service.. Most of the cost of new equipment must be paid for out of normal operating revenue. Almost all the airlines plan to expand their fleets. ALA- Aus- tral recently purchased 4 Fokker Friendships to be delivered in 1962, and may acquire several DC-6's from Pan American World Airways, Inc.; and Aerolineas INI is negotiating for the purchase of a DC-6. Sales are limited, however, because most airlines are still in an early stage of development, private financial resources are limited, and the Government is not subsidizing additional air- craft purchases. GENERAL AVIATION Approximately 1,800 aircraft are registered in Argentina for general aviation activities. About 640 are owned by 137 flying clubs, and 90 by Government or state enterprises. Approximately 130 are owned by some 57 companies engaged in commercial ac- tivities, including crop dusting, aerial seeding, photography, ad- vertising, and patrol and inspection. The rest are privately owned. The flying clubs are dispersed throughout the country, most small towns having at least one. Their activities are Government con- trolled and subsidized. The only flight schools are those of the clubs and the Government-operated pilot training schools in Buenos Aires. A company operating Bell helicopters has been active in locust extermination since 1947. A large percentage of the pri- vately owned small aircraft in Argentina are used and owned by companies or persons having large agricultural land holdings. Most of the fertile land is flat and well suited for servicing by ag- ricultural aircraft. Almost every farm or estancia has one or more sod landing strips. MARKET POTENTIAL The airlines use U. S. aircraft almost exclusively. U. S. makes are preferred to other foreign aircraft because of their perform- ance, reputation, familiarity, and convenient and relatively inex- pensive servicing and overhaul. No domestic carrier plans to acquire used piston planes of other than U. S. manufacture. How- ever, competition in sales of new aircraft, especially from the United Kingdom and France, is increasing. Argentina offers a modest market for U. S. surplus piston- engine aircraft. Domestic services will continue to rely mainly on used piston aircraft be- cause of the airlines' weak financial position and the inadequate facilities the airports now have for the accommodation of turbo- prop and jet planes. Aging piston planes now operating will prob- ably be replaced by used aircraft, which will also be in demand to form or expand private airlines. A small market for used cargo aircraft will develop if the expected growth of Argentina's domes- tic and international air cargo traffic occurs. Because of the weak financial position of many of the airlines, rental arrange- ments of used aircraft may be feasible. Although Argentina's utility aircraft market is limited by un- certain economic conditions and stiff import surcharge regula- tions, the U. S. utility aircraft industry considers it the second largest potential market in Latin America, especially for airplanes designed to meet the requirements of agriculture and cattle rais- ing. Interest in commercial helicopters is developing. The need for improved communications, air traffic control, and ground handling equipment has been recognized, but budget limitations affect sales opportunities. Air transportation and general avia- tion are expected to continue expanding as the national economy improves. Transportation of all types is needed, and air trans- portation is the only adequate means of access to many outlying areas. A 42-percent ad valorem import duty is imposed on the c.i.f. value of aircraft. Planes for the use of commercial airlines li- censed to operate in Argentina may be imported duty free. New aircraft not equal or similar to those planned for national produc- tion are subject to a 20-percent surcharge; new aircraft equal or similar to those planned for national production are subject to an exchange surcharge of 40 percent of the list price at the factory at the time of import. An exchange surcharge of 150 percent is imposed on used arcraft having a maximum airborne weight not exceeding 6 tons; the surcharge is 40 percent on the cost and freight value of aircraft of more than 6 tons. Exempt from the preceding surcharges are those aircraft purchased by and for do- mestic use of national, provincial or municipal bodies; those pur- chased by Argentine commercial airlines for regular andnonreg- ular services; those to be used for sanitation purposes if purchased by authorized enterprises; those to be used for aerial photography or survey if purchased by authorized enterprises; and those to be used for flying instruction. Argentine Civil Air Fleet— 1,929 Commercial airlines , total 135 Scheduled 90 Aerolineas Argent inas AVRO 748 1 Sud Aviation Caravelle 1 De Havilland Comet IV 4 Douglas DC-6 4 Douglas DC-4 6 Convair 240 4 Short Sandringham (hydroplane) 7 Douglas DC-3 14 Douglas C-47 2 Transcontinental, S.A. Curtiss Commuter (modified C-46) 7 Bristol Brittannia 2 Lockheed Super Constellation (leased out) 2 Aerolineas INI & Compania, S.A. Douglas DC-6 (passenger) 1 Douglas DC-4 (cargo) 1 Transatlantica, S.A. Lockheed 1649A Star liner 2 Lineas Aereas del Estado (LADE) (Number of planes operated is variable, consisting mainly of Douglas DC-3 ' s and -4's.) Aerotransportes Litoral Argent ino, S.A. (AIA) Douglas DC-3 6 Aero Commander 2 Austral Compania Argentina de Transportes Aereos, S.A. Curtiss Super 46-C 6 Douglas DC-4 1 Taxis Aereos Argentinos, S.A. , (TAASA) De Havilland Dragon Rapide 5 Norsur Compania Argentina de Aeronavegacion, C.I. y. F.S.A. Lockheed Lodestar L-18 6 Lineas Aereas de Cuyo (LAC) Lockheed Lodestar L-18 2 Transportes Aereos Buenos Aires, S.A. C.I. (TABA) Beechcraf t D-18 4 Sociedad Argentina Lineas de Transportes Aereos (SALTA) Cessna 2 10 Argentine Civil Air Fleet— 1,929— Con. Commercial airlines--Con. Nonscheduled 43 Transamerican Air Transport, S.R.L. Curtiss C-46F 2 Altaire, S.R.L. Piper PA-18A 10 Roberto Mendivil Aviones 9 Aero Rural, S.R.L. Piper PA-18A 4 Moises Salmun Fairchild 2 Trabajos Aereos y Representaciones , S.A. (TAYR) Bell (helicopter) 13 Ryan Navion 1 Aerunion, S.R.L. Curtiss Commando C-46 2 General aviation, total 1 , 794 Aero Skoda (Super) (Czechoslovakia) 17 Aer onca 62 Auster 30 Beechcraf t 55 Boeing 12 Cessna 237 De Havilland. 33 Er coupe 70 Fairchild 16 Fleet 26 Focke-Wulf 19 IA (Argentina) 12C Luscombe Silvaire 8 116 Macchi ( Italy) 23 Miles Magister 18 Nord (France) 21 North American 23 Piper 649 Sikorsky S-51 (helicopter) 14 Stearman 12 Stinson 52 Taylorcraf t 37 Other U.S. makes 68 Other U.K. makes 19 Other French makes 30 Other German makes 8 Other Canadian makes 3 Australian makes 1 Brazilian makes 3 11 Bolivia Bolivia, completely landlocked, has a total area of about 425,000 square miles, almost as much as the combined areas of Texas, Oklahoma, and New Mexico. The topography varies from great plains in the north and east to two chains of the Andes Mountains in the west which are separated by a plateau of 12,000 feet eleva- tion. Most of the country's almost 3.3 million population is con- centrated on this plateau and in the high valleys of the Andes' eastern slopes. About two- thirds of the population earn a living from agriculture, livestock, or forestry. Although the mining in- dustry employs only a few, it dominates the commercial life of the country. Manufacturing is limited. ROLE OF AIR TRANSPORTATION Air service is important because of the country's inland loca- tion and inadequate domestic surface transportation. Domestic commercial aviation has been especially important in unifying the country economically. Before air services linked the eastern plains to the western plateaus, the plains region was more closely allied with Brazil on the east and Argentina on the south than with the rest of Bolivia. The development of many of Bolivia's rich mineral and agricultural resources must rely on air transporta- tion or await the construction of roads and railroads. Railways total about 1,500 miles. The road system totals approximately 15,000 miles, but only 2,500 miles are all-weather highways. Bolivia also depends a great deal on aviation for international transportation. Rail connections to Pacific ports are limited to single-track, narrow-gauge lines through Chile and Peru. There are only two rail connections to Argentina and one to Brazil. The Pan-American Highway system in Bolivia is still inadequate, and inland waterways connect Bolivia only with Brazil. The Direction General de Aeronautica Civil (DGAC), which is under the jurisdiction of the Ministry of Public Works and Com- munications, supervises civil aviation. The Government sponsors the few aero clubs, one of which operates the national civil pilots' school. The development of commercial aviation is limited by the lack of foreign exchange and by considerable uneconomical competition and duplication of route services, especially in cargo operations. AIRCRAFT IN USE About 80 civil aircraft are registered in Bolivia, all but 2 of which are U. S. made. Commercial airlines operate 44 of the planes, including nineteen DC-3/C-47's and ten B-17's. The rest are used in general activities. Most planes which do not belong to the national airline are used for more than one purpose, includ- ing charter, business, and air taxi service. Various foreign com- panies use aircraft not registered locally. 12 COMMERCIAL AIRLINES Service The principal civil air carrier is Lloyd Aereo Boliviano (LAB), founded in 1925. The Government owns 59 percent of the stock, Pan American Grace Airways, Inc. (PANAGRA), 20 percent, and the Central Bank and private subscribers the rest. LAB is the only domestic civil airline maintaining regular scheduled services. It offers scheduled international service to Chile, Argentina, Par- aguay, and Peru, and scheduled domestic service between three cities. LAB also provides semischeduled domestic flights to about 25 cities and occasional charter cargo-passenger flights. It operates the major aircraft maintenance center in the coun- try and, under government sponsorship, a training school for avi- ation ground personnel. Its fleet of 16 aircraft includes 9 DC-3's, 1 DC-4, 2 DC-6's, and 4 B-17's which are used exclusively for cargo services. To increase national prestige, LAB wants to add more international flights. It hopes to connect with national air- lines in neighboring countries and to offer regularly scheduled flights to the United States. Transportes Aereos Militares (TAM), part of the Bolivian Air Force and functioning under the Ministry of National Defense, also provides scheduled passenger and cargo services, using 6 DC-3's. It offers flights between La Paz and various cities in the interior, and to localities on routes considered uneconomical for other com- mercial operators. Bolivia is a member of the International Civil Aviation Organi- zation (ICAO) and has air agreements with six nations. Although one of the major air routes across South America passes through Bolivia, only the following foreign air carriers serve the country on their scheduled international flights: Pan American Grace; Braniff International; Lima Aerea National (LAN), Chile; Servicios Aereos Cruzeiro do Sul, Ltda. (Cruzeiro), Brazil; and Aerolineas Argentinas. In addition to LAB and TAM, the major scheduled operators, a few small nonscheduled carriers haul meat, agricultural products, and some general cargo. Corporation Boliviana de Fomento (CBF), a Government cattle- raising corporation, has maintained its own air cargo service to La Paz and neighboring cities since 1945. It also provides passenger and cargo service to more than 10 cities or towns on a semischeduled basis, using 3 C-46's and 2 B-17's. Frigorifico Ballivian, S.A. i (FBSA), a privately owned company operating since 1948, transports meat under refrigeration from about five slaughtering centers to La Paz, using 5 converted B-24's and 1 Convair L-13A. Return flights carry general cargo. Cor- poracion Minera de Bolivia (COMIBOL) is a Government owned and operated mining corporation which uses 1 DC -3 mainly for transportation of meat and other products within the south- central region. It owns and services about 6 air fields. 13 Yacimientos Petroliferos Fis cale s Bolivianso (YPFB), a national petroleum corporation, uses 3 aircraft for transporting passengers and equipment to and from oil-development centers. Aerovias Condor, formed in 1958, offers nonscheduled flights, using 1 DC-3. Aerovias Tunari was formed in 1959 and operates 4 B-17's in an all cargo service. LAB manages all of the approximately 30 airfields except El Alto Airport at La Paz and a group of fields along the Bolivia- Brazil air route. Only a few of the fields can accommodate large, multiengine aircraft, and most can handle only aircraft no larger than the DC-3. El Alto, the main international airport, is more than 13,000 feet above sea level and has only dirt and gravel run- ways. Development Loan Fund assistance has been approved and contracts are in negotiation for the construction of a paved runway, terminal apron, and taxiways, and for the purchase of light and control tower equipment to permit 24-hour operations. The lack of an all-weather hard- surface runway deters the routing of for- eign flag jet equipment through the country. A Central Aviation Shop was established with U. S. aid in 1956 to provide servicing facilities and equipment for LAB and private and semiprivate air transportation organizations. DISPOSAL AND REEQUIPMENT PROGRAMS No definite program is known to exist for aircraft disposal or replacement. Reportedly, LAB is interested in FairchildF-27 or Handley-Page Dart Herald turboprops. However, the company's limited finances restrict acquisitions. Almost all aviation equip- ment in Bolivia is U. S. made, and U. S. replacement equipment would probably be preferred. Liberal financial arrangements must be offered in order to ensure continued U. S. prominence in this market. GENERAL AVIATION About 35 civil aircraft are used in general aviation activities. Six single- engine planes are operated by the Government; the rest are privately owned. The private aircraft operators also frequent- ly offer their aircraft for air taxi or charter flights; some planes are used for business flying. MARKET POTENTIAL The anticipated increase in tourism and foreign investment and the development of the oil industry should stimulate air passenger and cargo transportation. Private flying has increased particu- larly in remote areas in which other means of transportation do not exist or are inadequate. Improved civil aviation is vital to Bolivia; it has a great potential for aiding economic development. However, the airlines' chronic lack of capital limits aircraft pur- chases. The small number of individuals able to afford their own 14 aircraft and the shortage of foreign exchange for all but the most important projects also restrict the present market. The number of planes brought into Bolivia by private companies should increase as foreign investments grow, and even though not locally registered, they should stimulate civil aviation develop- ment. Import duties on aircraft and parts are 2 percent ad va- lorem. Bolivian Civil Air Fleet— 79 Commercial airlines , total 44 Scheduled 22 Lloyd Aereo Boliviano, S.A. (LAB) Douglas DC-3 9 Douglas DC-4 1 Douglas DC-6 2 Boeing B-17 4 Transportes Aereos Militares (TAM) Douglas DC-3/C-47 6 Nonscheduled and cargo operators 22 Corporacion Boliviana de Fomento (CBF) Curtiss C-46 3 Boeing B-17 2 Corporacion Minera de Bolivia (COMIBOL) Douglas C-47 1 Aerovias Tunari Boeing B-17 4 Frigorificos Ballivian, S.A. (FBSA) Consolidated C-87/B-24 5 Convair L-13A 1 Yacimientos Petroliferos Fiscales Bolivianos (YPFB) Douglas C-47 1 Cessna 180 1 Cessna 310 1 Aerovias Condor Douglas DC-3/C-47 2 Cessna 182 1 General aviation, total 35 Government , nonmilitary 6 Direccion General de Aeronautica Civil Vultee BT-13 1 Fair chi Id C-82 1 Ministerio de Asuntos Campesinos Helio Courier 1 15 Bolivian Civil Air Fleet— 79— Con. General aviation — Con. Government, nonmilitary--Con. Instituto Linguistico Piper PA-14 1 Aeronca 1 Helio Courier 1 Private and business 29 Vultee BT-13A 3 Beechcraf t D-17S 1 Cessna 170 2 Piper J-5 1 Piper PA-20 2 Cessna 180 3 Stinson Voyager 2 De Havilland V 2 Piper "135 " 1 Piper PA-22 1 Cessna 172 2 Helio Courier H-391-8 2 Northrup L-125 2 Lockheed PV-2 2 Cessna 310 1 Aero Commander 1 Douglas C-47 1 Brazil Brazil, fourth largest country in the world, covers a vast area of more than 3 1/4 million square miles, 8 percent less than the United States without Alaska and Hawaii and almost 50 percent of the South American continent. Its boundaries extend for more than 14,000 miles, more than 4,600 of which are Atlantic Ocean coastline. Brazil borders on all the other countries on the conti- nent except Chile and Ecuador. About 57 percent of the land is plateau varying from 650-3,000 feet in elevation; 40 percent is lowland; and 3 percent is more than 3,000 feet in altitude, the highest peak being almost 9,500 feet. Although most of the coun- try is in the tropic zone, the climate of a large area is moderated by altitude or sea breezes. More than half the total area is drained by the Amazon River system. The population, about 65 million, is concentrated in the southeast, a region which is becoming increas- ingly urban. Although industrial growth has been rapid in recent years, agriculture, livestock-raising, and forestry still employ the greatest percentage of the labor force. ROLE OF AIR TRANSPORTATION Air service is important in the overall transportation system because it provides rapid passenger and cargo movement, serves 16 as a flexible substitute for surface systems, and connects isolated points not otherwise accessible with centers of population and in- dustry. Air transportation has expanded quickly because of the size of the country and the inadequacy of surface transportation. The scheduled airline service is supplemented by charter and air taxi flights. A branch of the Brazilian Air Force has initiated air service to remote domestic points, stimulating the develop- ment of commercial operations. International services are pro- vided to neighboring countries, the United States, Europe, and the Middle East. Airlines carry a sizable share of the international passenger traffic and a small, though growing, share of the cargo traffic. The Ministry of Aeronautics (Ministerio da Aeronautica), cre- ated in January 1941, regulates both civil and military aviation. The Directorate of Civil Aeronautics (Diretoria de Aeronautica Civil) is its chief civil aviation department. The Government en- courages the development of private air transportation services, offering subsidies to the air carriers, providing basic airport and airways facilities, allocating dollars through the banking system for the purchase of aircraft and aircraft parts, and arranging bank loans or guarantees of loans for new plane purchases. All but one of the major civil airlines are privately owned. The older, well- established lines have permanent certificates for most of their routes. About 1,200 airports, some of which have maritime or river facilities, are provided chiefly by the local, State, and Fed- eral Governments. Many small airports are used by both military and commercial planes. Most of the approximately 300 commer- cial airports are ungraded; only about 50 are paved. The improve- ment of air navigation aids and air traffic control equipment is underway, using U. S. technical assistance funds. Brazil has a small-scale light plane manufacturing industry. In the 1950' s a number of firms licensed by foreign aircraft man- ufacturers produced training planes for the Brazilian Air Force, as well as several series of original designs. These planes were subsequently released by the air force and now constitute the ma- jority of the aircraft operated by the aero clubs. The present status of these firms is unknown. Constructoes Aeronauticas , S.A., built North American AT- 6 advanced trainers. Fabrica Brasiliera de Avioes built the M-7 and M-9 biplane and a series of Fairchild M-62 (PT-19) 2-seat primary training monoplanes. Fabrica do Galleao produced 2 series of Focke-Wulf aircraft, both 2-seat primary trainers and 2-engine advanced trainers, and Fair- child M-62's. Companhia Aeronautica Paulistha (CAP) produced 3 light single- engine 2-seaters of original design: #1 Planalto, #4 Paulistinha, and #5 Carioca. Companhia Nacional de Nave- gacao Aerea (CNNA) designed and and produced a series of light aircraft including the HL-1, -2, -4, and -6. The Centro Tecnico de Aeronautica was recently established by the Ministry of Aeronautics to combine aeronautical research and development with education to further the domestic aeronau- 17 tical industry. Its Research and Development Division (IPD) is divided into different groups, the largest being concerned with aircraft development. This group, the Departmento deAeronaves designs and manufactures prototype aircraft, the current products being a helicopter and a single-seat glider. A 5-seat turbine- powered helicopter is being developed. One individual has been designing and developing light helicopters since 1941. The Sociedad Constructora Aeronautica Neiva, Ltda., has been supplying 2-seat and single-seat sailplanes to the Brazilian flying clubs for several years, under Government sponsorship. It is also building a 2-seat light plane known as the Paulistinha 56C for the flying clubs and another version for the air force, and it is developing a new liaison aircraft. Currently, five 56C's are being delivered each month for civil use. The various versions of the 56C's use imported motors and instruments. Several organizations in the domestic automobile industry are studying the possibility of manufacturing aircraft. These firms include Willys Overland do Brasil, S.A., interested in producing light airplanes and engines; Lambretta do Brasil, S. A., interested in manufacturing helicopters. Cassio Muniz, S.A.,for many years the Cessna representative in Brazil is interested in again manu- facturing light planes. The Government has recently created the Executive Group for the Aeronautical Material Industry (GEIMA), whose basic purpose is to stimulate the manufacture of aircraft, parts, and accessories. AIRCRAFT IN USE The Diretoria de Aeronautica Civil (DAC) maintains its aero- nautical register in folio form and makes no copies of it. How- ever, the Operations Division of the DAC has a list of all aircraft in the register except the 272 employed by the 15 carriers offer- ing regular air services. This list, showing approximately 2,300 aircraft (based on data of December 1959), is not believed to give a completely accurate picture of the private civil air fleet now operating in Brazil. Reportedly, planes actually in service, do not appear on the list— for example, aircraft owned by air taxi com- panies. Also, the list does not indicate which aircraft are inop- erable, and in view of the age of many of the planes and the diffi- culties in obtaining parts, a substantial percentage are probably no longer in flying condition. A DAC official has estimated that more than half the planes owned by flying clubs are not operable. The records of the DAC do not give a detailed or thoroughly reliable breakdown of registered aircraft by utilization. About 1,000 of the aircraft appearing on the list of the Opera- tions Division are assigned to flying clubs or schools. Another 1,000 are used for private and pleasure flying, although many are probably also being used for commercial and business flying. Ap- proximately 70-90 aircraft are in air taxi operations. A little less than 220 planes are registered by private companies or Govern- ment agencies, about 132 being operated by the Government. Some 18 of these planes— both private and governmental— are used pri- marily for crop dusting, powerline surveillance, ambulance serv- ices, and timber prospecting, and others are used primarily for personnel transport. Most are multipurpose, however. Aerial survey companies own 10 of the registered aircraft. Religious organizations own 9, all of which are probably being used in mis- sionary activities. Of the 14 helicopters on the list, 12 belong to governmental or quasi -governmental units which are concerned with agriculture, and the rest belong to a distributor in Sao Paulo. COMMERCIAL AIRLINES Service In the period 1950-58, the number of passengers carried on do- mestic and international flights increased from 1.7 million to 4.1 million; air cargo shipments increased from about 40,000 tons to almost 100,000 tons; and mileage flown increased from 51.1 mil- lion to 95.0 million. The major groups operating scheduled commercial airlines are consolidations of numerous companies established in the past 30 years. They are headed by the following: Empresa de Viacao Aerea Rio Grandense, S.A. (Varig); Servicos Aereos Cruzeiro do Sul, S.A, (Cruzeiro); and Viacao Aerea Sao Paulo (VASP). The individual companies operating airlines are Panair do Brasil and Paraense Transportes Aereos, S.A. (Paraense). The Varig company, founded in 1927 and one of the oldest air- lines in Brazil, offers domestic services to more than 50 cities and has international flights to New York, Buenos Aires, and the Caribbean. Varig's 57 aircraft include 4 jets— 2 Boeing 707-441's and 2 Sud Aviation Caravelles. The Government recently approved Varig's acquisition of the stock of Real-Aerovias Brasilia. This company was itself a consolidation, since 1954, of two of the most important airlines in Bra zil: R eal, S.A. Transportes Aereos (Real) and Empresa de Transportes Aerovias Brasilia, S.A. (Aerovias Brasilia). Real-Aerovias Brasilia controls Empresa de Trans- portes Aereos Norte do Brasil (Aeronorte), operating DC- 3' s on domestic routes; Transportes Aero Nacional, Ltda. (Nacional), and its 26-plane fleet; and Sadia Transporte Aereos (Sadia), op- erating 4 DC-3's and DC-4's. The Real-Aerovias group is one of the largest domestic airlines in Latin America. Using a total of 69 piston- engined planes, it serves more than 230 cities in Brazil and offers international service through the U. S. to Japan. Cruzeiro and its affiliated companies, S.A. Viacao Gaucha (SAVAG) and Transportes Aereos Catarinense (TAC), reportedly operate on more than 12,000 route miles in Brazil and neighbor- ing countries. They serve approximately 100 cities in Brazil, using 50 aircraft. VASP merged with Loide Aereo Nacional, S.A. (Loide) in Jan- uary 1962. VASP will be the majority owner of the new enterprise, 19 which includes all of the Loide subsidiaries. The merged company will serve a total of 64 domestic points and will be responsible for about 25 percent of all domestic air traffic, using a total fleet of about 70 planes. Eventually, jet aircraft will probably be ac- quired for the introduction of international services. For the present, the two airlines will maintain their separate identities. VASP, whose capital is held mostly by the State and municipal governments of Sao Paulo, began operating in 1935. It provides shuttle service between Rio de Janeiro and Sao Paulo and from these points to more than 30 southern and central Brazilian cities and towns. VASP has 33 planes, including 5 Vickers Viscounts. Loide started operations in 1949, amalgamated with Transportes Aereos Bandeirante (TAB A) in 1951, and bought out Navegacao Aerea Brasileira (NAB) in January 1962. It operates on about 6,000 route miles in Brazil, serving 24 cities regularly and sev- eral others irregularly, using DC-3's, DC-4's and C-46's. The C-46's are used to haul workers, equipment, and supplies into areas where no other means of transportation exist, or which are so difficult to reach that bush- type air service is the only prac- tical means of access. Loide plans to add its DC-6A's, which until recently were leased to Panair do Brasil, to the routes now served by its DC-4's. The current equipment modernization program is aimed at offsetting some of the advantages Loide' s competitors have as owners of high-performance aircraft and larger fleets. Panair do Brasil regularly serves more than 65 points through- out the country on its domestic routes. Its international services extend to Europe and the Middle East. Panair' s 22 aircraft in- clude 2 Douglas DC- 8 jetliners. Paraense Transportes Aereos, S.A., the other carrier offering domestic service, uses 3 C-46's. Air cargo transportation is highly important because of its suit- ability for many types of freight moved in the country and because surface transportation facilities are often inadequate. Since 1931 the Air Transport Command (COMTA) of the Brazilian Air Force has operated the National Airmail Service (CAN). CAN has pi- oneered routes into the hinterland and to other countries. On 14 domestic and 9 international routes, it transports passengers, mail, and cargo in Beechcrafts, C-47's, and C-54's. Other international services are offered by Braniff International Airways, Pan American World Airways, Inc., and 13 foreign flag carriers from Europe and neighboring South American countries. Brazil is a founding member of the International Civil Aviation Organization (ICAO) and maintains a permanent delegation at ICAO headquarters. Disposal and Reequipment Programs The present shortage of foreign exchange, particularly dollars, and the cumulative effects of over expansion are limiting the Bra- zilian air carriers' disposal and reequipment programs. Report- edly, rising costs and the excess capacity developed in recent 20 years are the result of unchecked competition among the carriers. Forty percent of the total operating costs of Brazilian commercial aviation are estimated to be in dollars. The aviation companies have been faced with sharply mounting costs marked by a major increase in the cruzeiro cost of importing aircraft, spare parts, and gasoline. Because of the substantial excess capacity, the num- ber of aircraft used by Brazilian airlines will probably be reduced. The Douglas DC-3 and Curtiss C-46, both of which have rela- tively low performance, represent about 60 percent of the entire Brazilian civil air fleet, but a little less than 50 percent of the available seats, and only about 25 percent of the available annual capacity. They probably will not be eliminated, however, because they will still be needed for service to many domestic airports where runways are substandard, and because the resale market for these planes is severely limited. One-half to two- thirds of the DC-3' s and two- thirds of the C-46's will probably still be in use in 1964, a substantial proportion of the C-46's by then having been converted to all-cargo carriers. Approximately 45-65 DC-3's and 15 C-46's will gradually be dis- posed of by sale, scrapping, or normal attrition. The small number of Consolidated PBY-5A's (Catalinas) now in regular service in the Amazon River area is expected to decrease by normal attrition. If the Catalinas' present routes were to be eliminated or modified, the operators would probably attempt to sell the planes. VASP's SAAB Scandias will probably be gradually retired from service, sold, or scrapped. Although the Scandias are considered by some Brazilian authorities to be more efficient than the DC-3 or C-46, they would be hard to resell. About half of the 15 Scandias now operating will probably still be in use in 1964. Most of the changes in the number of Convair 240' s, 340' s, and 440' s will be brought about by normal attrition. The Lockheed Constellation is well suited for use in Brazil's high-density markets. Panair will probably keep its 049/149 mod- els through 1964. They are fully depreciated and the market for them, especially in Latin America, is limited. Panair has a large stock of spare parts for them, is completely equipped for main- taining them, and has acquired great experience in operating them. Eventually, Varig's 5 Super Constellation 1049-G models will be retired. The Aerovias 1049-H models are reportedly for sale. Panair expects delivery of 2 Comets and 4 Caravelles in 1962, and has an option on 3 additional Caravelles. When all of these jets are in operation, its DC-7's will be retired or sold. Loide is undergoing an equipment modernization program and is not plan- ning to dispose of any of its current fleet. Its 4 DC-6A's and 8 DC-4's are being renovated. Loide is also planning to purchase 3 jets, probably Boeing 720B's or 727's. Cruzeiro has purchased 4 Caravelles. Varig tentatively plans to buy 4 more Caravelles and has or- dered 2 Boeing 707' s, and the new Varig group plans eventually to retire all piston equipment and to use only jets. It hopes to have a fleet of Caravelles for short hauls and Boeing 707-441's, Doug- las DC-8's, and Convair 990' s for long hauls. 21 The turboprops or jets which the companies plan to purchase are actually replacements, but are intended to help the carriers keep pace with international competition and to maintain Brazil- ian prestige abroad. U. S. equipment is usually preferred. However, substantially better delivery dates on similar equipment (as in the case of VASP's purchase of Viscounts), unique equipment (as in the case of Varig's Caravelles), or substantially better financing terms for reasonably similar equipment are important factors determining final sales. GENERAL AVIATION About 2,300 aircraft are used in general aviation activities. The Government subsidizes the private flying clubs, which are the country's chief source of pilots. The exact extent of air taxi services is not known. These services are used mainly to sup- plement passenger and cargo transportation between the main cities within the various States, and to provide transportation between the large cattle ranches. They also supplement regularly scheduled services in many areas by offering flights to smaller villages. The Federal and State Governments and private pilots engage in crop dusting. Some private flying is done by plantation and ranch owners. Cruzeiro manages Servicios Aereos Foto- grametricos Cruzeiro do Sul, a company which operates an aerial photography and oil and mineral exploration service. The Bra- zilian Air Force sometimes transports medical supplies and patients. MARKET POTENTIAL No market for U. S. surplus piston- engine aircraft is likely be- cause the Brazilian carriers will be attempting to dispose of the same type of aircraft. New transport equipment is in demand, and orders have already been placed with U. S. manufacturers for the majority of the aircraft to be acquired. Brazil will continue to import light aircraft because the capacity of its infant aeronautical industry will be limited for some time. The need for engines, parts, and accessories will also continue. Demand is also good for fixed- and rotary-wing planes suitable for crop dusting, aerial survey operations, executive flying, air taxi service, and general utility work. The market will remain largely uncertain because of the high cruzeiro cost of importing aircraft and parts. Other restrictions on aircraft and parts importation are an ad valorem import duty of 2 percent on the c.i.f. value, a surtax of 5 percent on the c.i.f. value, and a consumption tax of 3 percent on the total duty paid value. Aircraft may be imported only with the approval of the Directorate of Civil Aeronautics, and all foreign exchange con- tracts with the Bank of Brazil require a certificate of approval from the Directorate. 22 Brazilian Civil Air Fleet— 2,555 Commercial airlines , total , 272 Varig group S.A. Empresa de Viacao Aerea Rio Grandense (Varig) Douglas DC-3 21 Curtiss C-46 14 Convair 240 12 Lockheed Constellation 1049-G 5 Boeing 707-441 2 Sud Aviation Caravelle SE-210 2 Real-Aerovias Brasilia: Real, S.A., Transportes Aereos Douglas DC-3 8 Convair 340 3 Convair 440 7 Douglas DC-6B 3 Curtiss C-46 3 Empresa de Transportes Aerovias Brasilia, S.A. Douglas DC-3 7 Lockheed Constellation 1049H 4 Nacional Transportes Aereos, S.A. (Nacional) Douglas DC-3 14 Curtiss C-46 7 Convair 440 5 Empresa de Transportes Aereos Norte do Brasil, S.A. (Aeronorte) Douglas DC-3 4 Sadia Transportes Aereos (Sadia) Douglas DC-3 2 Curtiss C-46 2 Cruzeiro do Sul group Servicos Aereos Cruzeiro do Sul, S.A. (Cruzeiro) Douglas DC-3 20 Convair 240 10 Convair 340 4 Convair 440 4 Fairchild C-82 7 S.A. Viacao Gaucha (SAVAG) Douglas DC-3 2 Transportes Aereos Catarinense (TAC) Douglas DC-3 3 Vasp group Viacao Aerea Sao Paulo (VASP) Douglas DC-3 13 SAAB Scandia 15 Vickers Viscount 827 5 23 Brazilian Civil Air Fleet— 2,555— Con. Commercial airlines — Con. Vasp group — Con. Loide Aereo, S.A. (Loide) Douglas DC-4 7 Curtiss C-46 5 Douglas DC-6C 4 Transportes Aereos Bandeirantes (TABA) Douglas DC-4 1 Curtiss C-46 3 Navegacao Aerea Brasileira (NAB) Douglas DC-3 8 Smith Super 46-C 8 Curtiss C-46 3 Panair do Brasil (Panair) Douglas DC-7C 4 Consolidated PBY-5A 5 Douglas DC-8 2 Lockheed Constellation 049/149 11 Paraense Transportes Aereos, S.A. (Paraense) Curtiss C-46 3 General aviation, total 2,283 Bucker- Jungmann Bu . 13 8 Auster V 15 Fairchild F-24 (20); PT-19 (49); PT-26 (5); F-22 (1) 75 Cessna UC-78 (5); 140 (76); 120 (12); 195 (15); 170 (173); 190 (13); 180 (52); 310 (8); 182 (11); 150 (2); 145 (1); 172 (38); 175 (12); 135 (1) ; 419 CAP* 1 Planalto (2); 4 Paulistinha (535); 5 Carioca (14) 551 Stinson Voyager (150); Reliant (18); SM-SA (1); "0" (1); L-5 (1) 171 CNNA** HL-1 , -6 59 Piper PA-12 (20); J-3 , -4, -5 (182); PA-14 (1); PA-16 (3); PA-11 (14); PA-15 (2); PA-17 (1); PA-18 (122); PA-20 (47); PA-22 (6); PA- 23 (8) 406 Aeronca 11AC (14); 7AC (44); 15AC (18); 50C, 50F (7); Trainer (1); L-3-C (29); PC-3 (2); 65C (7) 122 Percival Proctor V (2); Gull (1); Prince (2) 5 Beechcraft C, D, E-17, -18S (20); 35 Bonanza (87); AT-11 (6); 50 Twin Bonanza (2); AT-7 (1); C45 (1) 117 * Companhia Aeronautica Paulistha. ** Companhia Nacional de Navegacao Aerea. 24 Brazilian Civil Air Fleet— 2,555— Con. General aviation — Con. Ryan Navion (19); S-T-A (3); S-C-W 145 (1)... 23 Luscombe Silvaire 8 (16); A-65 (1) 17 Ercoupe 415C 13 Fleet 80 Canuck 5 Howard DGA 3 Republic RC-3 Seebee 3 DeHavilland Moth (9); 89A Dragon Rapide (1); Dove 104 (3); Heron 114 (1) 14 DeHavilland (Canada) Beaver 2 Douglas DC-3 (10); A- 24 (1); C-39 (1) 12 Globe Swift GC-1 3 Taylorcraft BC 12D-65 , -85, Cub 43 SECAN* Courlis SUC-10 1 Nord 1203-11 Norecrin 27 Bellanca 14-19 Cruisemaster (2); 31-42 Pacemaker (2) ; Senior Skyrocket (1) 5 Focke-Wulf 5 -8 6 Aero Commander 5 20 , 560 3 Max Holste 1 Porterf ield CP-50 2 Muniz M-7 , -9 5 Stearman A , B-75 , -76 6 Vultee BT-13 , -15 16 Niess 5-FG 58 Waco 9 Junkers A50, F13 3 Curtiss W-16 , C-46 3 Torres-6 1 Klemm 3 Bird-CK 1 EAY 201 1 Rearwin Sportster 7000, 8500, 9000 7 Avro Avion 1 Savoia-Marchetti SM.56 1 Caudron Aiglon 601 1 Monocoupe 90-A 1 RWD 5 , 13 5 Zlin Xll 1 Culver Cadet LFA 1 Miles Gemini 1 Chrislea Super Ace 1 Lockheed Lodestar L-18 2 Consolidated PBY-5 3 Akron Funk B75L 1 Boeing 247D 1 Saab Scandia 1 AISA** H.M. 310 1 Helio Courier 2 CMSA*** Casmuniz 52 1 Sikorsky S-51, -55 (helicopter) 3 Bell 47-D (helicopter) 10 Hiller UH-12 (helicopter) 1 * Societe d' Etudes et de Constructions Aero-Navales. ** Aeronautica Industrial, S.A. *** Cassio Muniz, S.A. 25 Chile Chile, bordered on the east by the Andes Mountains and on the west by the Pacific Ocean, is approximately 2,650 miles long and averages 110 miles wide. Its area of more than 280,000 square miles is a little greater than that of Texas. The population of more than 7 million is concentrated in the central third of the country. The topography includes subtropical deserts in the north, tropical rain forests in the southern central region, and cold, treeless plains in the extreme south. The country has a fairly high standard of living and one of the most important industrial complexes in South America. Agricul- ture is still the chief economic activity, but manufacturing is now the principal source of income. ROLE OF AIR TRANSPORTATION Air transportation is important because of Chile's mountainous topography, isolation, and long distances between major domestic industrial and population centers. Reliable and speedy means of transit within the country are essential to the efficient functioning of Government and business. The developments in air traffic have been spectacular in recent years. International and regional air services carry more passengers than ocean and rail transportation services. Domestic civil avi- ation has been important for years, and is steadily increasing in importance because surface transportation is inadequate and can- not compete with the time advantage of air travel. Furthermore, opening air transportation services to underdeveloped and inac- cessible areas, requires less investment than installing surface transportation services would, and air services are more adjust- able to changing demands and conditions. Although air cargo transports carry less freight than surface facilities, they provide the only service into some areas of south- ern Chile and have operated profitably in the far north, where rail and highway services are poor and maritime facilities underde- veloped. Domestic air cargo services will probably increase, but they will have competition from the developing surface net- works, which can operate more cheaply. Chile's own international air cargo services have been limited, but operations through Chile are expected to increase substantially as South America develops economically. Civil aviation has been instrumental in stimulating the country's commercial development, and the Gov- ernment is expected to promote further aviation development. Civil aviation in Chile is controlled primarily by the military authorities. Government agencies which regulate and promote civil aviation include the Civil Aeronautics Board (Junta de Aero- nautica Civil); Directorate of Aeronautics; Under Secretary for Aviation in the Ministry of National Defense; Airports Section of the Planning Department in the Ministry of Public Works; Sub- 26 Secretariat of Transport in the Ministry of Economy; and Linea Aerea Nacional (LAN), the national airline. Chile has promoted civil aviation domestically by subsidizing the Government- owned airline, and internationally by encouraging foreign flag airlines to stop in the country. LAN's direct annual subsidy has been in- creasing recently, but it excludes the purchase price of new air- craft, for which the Government allots special funds. Private airlines are exempt from all taxes except those on ticket sales, which LAN is also required to pay. Indirect subsidies include exemptions from duties and taxes on fuel, new planes, and parts. Direct subsidies are also extended to the private flying clubs, and free maintenance services are provided them by the air force. Chile has ratified the International Civil Aviation Convention and is a charter member of the International Civil Aviation Or- ganization (ICAO). LAN is an active member of the International Air Transport Association (IATA). Santiago is the provisional seat of the Asociacion Latinoamericana de Transportes Aereos — ALTA (Latin American Air Transport Association), a group of smaller Latin American carriers that do not belong to IATA. Chile has bilateral agreements with Argentina, Brazil, the Scan- dinavian countries, Ecuador, Paraguay, Peru, the United Kingdom, and the United States. AIRCRAFT IN USE About 500 civil aircraft are used in Chile, and all but 10 are U. S. made. The aircraft inventory of the scheduled commercial airlines consists of 7 Douglas DC-6's, 19DC-3's, 4 Curtiss C-46's, 4 Martin 202's, and 4 Convair 340-440's. More than 470 planes are registered for nonscheduled cargo, air taxi, crop dusting, executive, Government nonmilitary, air club, and private flying. They are mostly light, 2-4- seat aircraft. COMMERCIAL AIRLINES Service The Government-owned Linea Aerea Nacional (LAN) is semi- autonomous and is supervised by the Under Secretary of Trans- portation in the Ministry of Economy. LAN was established in 1932 and has grown steadily. Ithas complete aircraft maintenance and overhaul facilities at Los Cerrillos Airport, Santiago, and routine maintenance stations at 26 other domestic airports and 4 international airports. It owns and operates all the DC-6's, Mar- tin 202's, Convair 340-440's, and 16 of the DC-3C's (converted C-47's) registered in Chile. Inl958LAN accounted for four-fifths of domestic passenger traffic and two- thirds of air cargo trans- portation. It flies more than 15,000 kilometers of domestic routes to about 40 cities and more than 8.5 million kilometers a year on domestic and international routes. It has a domestic service be- 27 tween its southernmost terminal and the Tierra del Fuego oil fields, and an interregional service for which it uses DC-6's and Convairs. LAN offers the only scheduled international service, its major route being from Santiago to Miami. If jets were ac- quired, this route would probably be extended to New York and Europe. The company would like to offer more domestic serv- ices, using its DC-6's, and to add a DC-6 service to the U. S. west coast. Linea Aerea Sud- Americana, Ltda. (LASA), a private airline formed in 1959, operates C-46's and offers regularly scheduled passenger flights to northern and southern Chile, some of which make additional stops en route to provide cargo service. It also provides seasonal service, November- April, to Juan Fernandez Island, 400 miles off the Pacific coast of Chile. LASA contracts for limited cargo services to Peru, Panama, Venezuela, Mexico, and Puerto Rico. A scheduled cargo service is provided from Santiago to Mendoza, Argentina. Linea Aerea del Cobra (LADECO), a small thriving airline es- tablished in 1958, primarily serves the copper mining region of northern Chile, using 2 Douglas DC-3's. LADECO offers a sched- uled summer service from Santiago to northern Chilean cities. It also provides regular service from Santiago to several major cities in the southern region. Its operations are not expected to expand. In December 1961, Aereos Servicios Pacifico Sur (ASP AS) was formed to offer cargo service using 1 C-46. Scheduled international passenger service to Santiago is pro- vided by British Overseas Airways Corporation (BOAC); Royal Dutch Airlines (KLM); Scandinavian Airlines System (SAS); Deutsche Lufthansa; Canadian Pacific Airlines (CPA); and Pan American-Grace Airways (PANAGRA). Aerolineas Argentinas, Aerolineas Peruanas, S.A. (APSA), Lloyd Aereo Boliviano (LAB), Panair do Brasil, and Faucett (Peru) also provide scheduled services into Chile and offer connections to overseas carriers not entering the country. The Fabrica Nacional de Aeronave s (F AN AERO) was established in 1953 as a national, privately administered enterprise to manu- facture certain types of aircraft, gliders, parts, and other aero- nautical equipment. However, the company is now engaged only in major aircraft overhaul and the manufacture of some aircraft parts. In 1955 it constructed a domestically designed light, low- wing monoplane trainer which is being used by the Chilean Air Force, but aircraft manufacturing is limited. Although the existing airports and airways are inadequate, the Government has a long-range program for improving them. An airport planned for Padahuel, near Santiago, will be the major in- ternational field and will accommodate jet equipment operated by the international airlines. Cerro Moreno Airport at Antofagasta can handle large international jet aircraft, but passenger facili- ties will need improvement. Some other airports are classified 28 as international, but most of them can only handle aircraft up to the size of a DC- 6. Few of the 20 airports south of Santiago are paved, and passenger facilities at most are inadequate. Disposal and Reequipment Programs Domestic airlines do not have any definite programs for air- craft disposal. LAN acquired four of its DC-6B's in 1958, and in 1960 purchased 4 Convair 340/440' s to gradually replace its Martin 202' s, which are uneconomical because of the high cost and shortage of spare parts. LAN would like eventually to ac- quire jet aircraft. LADECO plans to purchase another DC- 3 and eventually may replace the DC-3's with Convair 340's or their equivalent. LASA will probably eventually trade several C-46's for Super C-46's. The United States is definitely preferred as the source of aircraft and aeronautical equipment. However, Great Britain and France may be strong competitors in the market for* jets. GENERAL AVIATION Government subsidized air clubs are active and popular. Ap- proximately 56 air clubs own more than 280 small planes, and their members reportedly own over 90 additional aircraft. Pleas- ure flying is gaining importance as a means of crossing over Chile's rough and rugged terrain. Pilots use club aircraft for trips to the numerous domestic vacation spots. Flying at the big ranches is also considerable. Several small groups have organized air taxi services but have had only limited success. Recently, several small companies were formed to provide charter services south of Santiago, es- pecially during the summer vacation season, November to March. About a dozen planes, mostly 4-seaters, are used for such serv- ices; they may be chartered to fly into areas not served by the commercial airlines. The companies have the same tax exemp- tions as the larger carriers. The competition for this limited business is intense, and through the years a number of such ven- tures have failed. Agricultural flying, now a successful small business, is ex- pected to develop even more. In 1960, 3 firms used 17 small planes for crop dusting and, to a small degree, insect spraying of about 200,000 acres of farm land. Business flying was developed mostly by mining and agricul- tural groups. Most of the 12 planes used for this purpose are Cessna 310' s. The other large industrial interests and landowners that are beginning to use their own aircraft represent a potential market for utility planes. Commercial aerial photography is limited. A Cessna 195 owned by the Ministry of Public Works is equipped for aerial photography and is used on highway construction, dam building, and other pub- lic construction projects. Some privately owned light planes are 29 used for such activities as aerial advertising, mineral and geo- logical exploration, fish detection, and forestry patrol. Several Government agencies own planes: the Ministry of Public Works has 5, and the Ministry of Lands and Colonization and the Empresa Nacional de Petroleos each have 1. The special Cara- bineros (police) Air Club owns about 9 aircraft, which it uses for recreation and official business. MARKET POTENTIAL The potential demand for certain types of aircraft, especially cargo, as well as for aircarft components and airport, air navi- gation, and air traffic control equipment is good. The trend toward increased use of domestic and international passenger and cargo air carriers is expected to continue. However, airport facilities must first be expanded and modernized. Noncarrier air opera- tions are also expected to increase. Air clubs have an established popularity. As the country's economic position improves, busi- ness flying and air taxi services will expand. Aerial crop dusting will probably be done on a larger scale. The commercial airlines are not expected to improve their fleets significantly in the immediate future. Short-haul medium - tonnage cargo aircraft which can maneuver easily in and out of the country's numerous small airfields will probably be in demand. These aircraft would be used for air taxi, ambulance, and emer- gency evacuation work. Reportedly, about 25 2-4-seat single- engine aircraft may be sold annually. Helicopters have not been used to a great extent; the few now operating are assigned to the air force. Civil groups find them too expensive to purchase and maintain. Traditionally, U. S. aeronautical products are preferred. Most of the commercial transports and their spare parts were purchased from the United States. Small aircraft are purchased from U. S. manufacturers because of their comparatively low price and high quality. The general availability of spare parts and the conven- ience of having these planes flown in rather than being dismantled and crated for shipment from Europe are other factors in their favor. However, in order to maintain their favorable market po- sition, U. S. suppliers will have to meet foreign competitors' easier sales terms. In addition, technical manuals should be sup- plied in Spanish, supplies of spare parts should be ensured, and installation and maintenance assistance should be provided. All planes have been exempted from import deposits and duties. Chile follows ICAO air worthiness rules and regulations, but any aircraft imported from the U. S. with a U. S. certificate of air worthiness is presumed to meet all requirements and requires no additional certification. 30 Chilean Civil Air Fleet— 512 Commercial airlines , total 39 Linea Aerea Nacional (IAN) Douglas DC-6B 7 Douglas DC-3C 17 Martin 202 4 Convair 340/440 4 Cessna 310 1 Linea Aerea del Cobre (LADECO) Douglas DC-3 2 Linea Aerea Sud- Americana, Ltda. (LASA) Curtiss C-46 4 General aviation, total 473 Charter, air taxi, business, crop dusting, and aerial photography 42 Piper Pawnee , PA- 25 3 Beechcraf t G-17-S. 1 Beechcraf t D-18-S 1 Stinson 3 Cessna 170, 180, 310, 195 13 Aero Commander 560-A 1 Piper Apache PA- 23 1 Piper PA-18 14 Beechcraf t 35 Bonanza 1 Beechcraf t 50 Twin Bonanza 3 Lockheed Azcarate L-60 (Mexico) 1 Government , nonmilitary 16 Douglas DC-3 1 Grumman Widgeon 1 Stinson 1 Cessna 190 2 Cessna 180. 1 Cessna 310 1 Cessna 172 2 Aeronca L-3-B 1 Cessna 182 2 Beechcraf t 50 Twin Bonanza 1 Champion Traveller 3 Flying clubs 283 Aeronca 48 Cessna 91 Stinson 17 Taylorcraf t 7 Piper 79 Miles Magister 3 Ercoupe 415 6 31 Chilean Civil Air Fleet— 512— Con. General aviation--Con. Flying clubs — Con. Mooney Mark 20 5 Beechcraf t 35 Bonanza 4 Champion Traveller 19 CNNA* HL-1 (Brazil) 1 Luscombe Silvaire 8 1 Waco 1 Fleet Finch II 1 Private 132 Champion Traveller 2 Cessna 49 Beechcraf t 24 Ercoupe 4 Piper 14 Culver Cadet 2 Miles Magister 1 Vultee BT-13 1 Me sser schmidt 1 Auster Autocar 1 Klemm (Germany) 1 Aero Commander 2 Mooney 8 Stinson 10 Percival (England) 1 Boeing/St earman 1 Bellanca B-14 2 Luscombe 2 Republic RC-3 Seebee 1 Swift 2 Ryan Navion 1 Nochaco A (Chile) 1 Porterf ield 1 *Companhia Nacional de Navegacao Aerea. Colombia Colombia has an area of approximately 440,000 square miles, almost three times that of California, and a population of more than 14.8 million. The land slopes northward to the Caribbean Sea and westward to the Pacific. The west is dominated by three branches of the northernmost ranges of the Andes Mountains. To the east are sparsely inhabited plains and jungles comprising almost two- thirds of the country's total area. Almost all of the population and economic activities are concentrated in the western mountain region. The chief economic activities are coffee pro- duction, petroleum exploration and development, and manufactur- ing. Industrial development has been sparked by foreign invest- ment, particularly from the United States. 32 ROLE OF AIR TRANSPORTATION The inaccessibility by surface transportation facilities of many areas and the seasonal limitations of river transport have con- tributed to the popularity of air services. Although the cost of air transportation is high, it is offset in large measure by the expense of delay, damage, and pilferage that other means of trans- portation incur. Air links with other countries have been increas- ing steadily as more international routes have been added by do- mestic carriers and as additional foreign carriers have provided services. Surface transportation has recently improved. Trucking pro- vides an expensive but comparatively efficient means of trans- portation, the railways interconnect at several points and provide a domestic network, and the inland waterways continue as the traditional means of surface communication. The bulk of foreign trade moves by water; traffic over land frontiers is limited, and the volume by air is also slight. The Government supports the aviation industry. Civil aviation is controlled and regulated by the Administrative Department of Civil Aeronautics (Departmento Administrative) de Aeronautica Civil— DAAC) and the Colombian Airports Corporation (Empresa Colombiana de Aerodromos), which operate independently. The Corporation owns more than 50 of the Nation's airports and con- trols several privately owned fields. The Government does not operate any air transport enterprises, but the air force carries mail and official shipments to remote areas of the country. The National Council of Civil Aeronautics (Consejo Nacional de Aero- nautica Civil— CNAC), formed in July 1960, studies and determines general aviation policies in accordance with the national interest. In 1962 it expected to establish a Colombian Air Corporation (Cor- poracion Aerea Colombiana) to be composed of the national air- lines now flying international routes. This organization would then be the only Colombian international airline. However, on January 13, 1962, public announcement was made that the proposal had failed. Air agreements exist between Colombia and Great Britain, Spain, Portugal, France, the United States, and Brazil. Colombia is also a member of the International Civil Aviation Organization (ICAO). AIRCRAFT IN USE More than 500 civil aircraft were registered in Colombia in fiscal year 1960, and all but 42 were U. S. made. Commercial scheduled operations accounted for 87 of the total, nonscheduled and air taxi services 81, business flying 22, private flying 80, Government nonmilitary 23, agriculture 31, flying clubs 6, and miscellaneous aerial services 180. The principal U. S. makes included Douglas (64), Cessna (109), and Piper (167). 33 COMMERCIAL AIRLINES Service Colombia was the first South American country to offer com- mercial air transportation. The scheduled commercial airlines now provide domestic service to 100 major population and indus- trial centers, particularly in the central, west, and northern por- tions of the country. International services are offered to the neighboring South and Central American countries, the Caribbean and Atlantic islands, the United States, and several European countries. The major international and domestic air carrier, Aerovias Nacionales de Colombia, S.A. (A VIANCA), was organized in Oc- tober 1939. The Colombian Government owns 1.9 percent, Pan American World Airways, Inc., 38 percent, private Colombian interests 55 percent, and other foreign stockholders 5 percent. It provides domestic scheduled flights mainly to the western and central regions. Its active fleet totals almost 70 aircraft, includ- ing 1 short-to-medium-range jet; most of the rest are Douglas DC-4's, DC-3/C-47's, and DeHavilland Beavers. So cie dad Aero- nautica de Medellin, S.A. (SAM), primarily a scheduled cargo car- rier, is owned mainly by Colombian interests, but a U. S. citizen is a principal minority stockholder. SAM occasionally makes pas- senger flights on domestic routes, and internationally to Miami, using Curtiss C-46's, Douglas C-47's, and DC-4's. Rutas Aereas de Colombia, Ltda. (RAS) offers international flights to New Or- leans and Miami through Panama and domestic flights to major cities, using DC-6B's, a DC-3, and a DC-4. Royal Dutch Airlines (KLM) owns 26 percent of the company and SAM the rest. Lloyd Aereo Colombiana, S.A. (LLACSA) has been operating a scheduled service to Miami, a domestic service between 5 cities, and a semischeduled service to Havana. The ownership and status of this airline, which has had many financial difficulties, is not cer- tain. Two of its 3 Curtiss C-46's were lost in 1960 crashes. Compania Aerea el Burrito, S.A. operates Curtiss C-46's on domestic freight services and to Miami, and also charters flights to other Latin American countries. Colombian interests own 51 percent, and U. S. interests own the rest. Lineas Aereas la Ur- raca (La Urraca) operates a semischeduled service in the central region south of Bogota, using a B-18 (an old-model DC-3) and a small Luscombe. Aircraft are not domestically manufactured or assembled, al- though the Government authorized the assembly of crop spraying planes in September 1961. AVIANCA maintains routine service facilities in Bogota and an overhaul shopinBarranquilla. Several other domestic airlines have service and maintenance facilities, which are usually available to other firms and individuals. Light plane service is offered at several small airports. 34 About 45 airports are used in domestic services, including pri- vate flying, and about 10 fields are used as international airports. Airport facilities are being expanded and improved throughout the country and additional projects are being planned. Because of its central geographic location, Colombia's participation in air trans- portation between South America, North America, and Europe will become increasingly important. The projected airport construc- tion and improvement will help to attract international traffic. About 16 foreign flag airlines now provide scheduled international service through Bogota. Disposal and Reequipment Programs Few aircraft disposals are expected. Some sales may be made between the domestic airlines. RAS, for instance, is negotiating to sell a DC-4 to SAM; it also recently exchanged 2 DC-4's to a U. S. firm for 1 DC-6B. In November 1961, AVIANCA received the first of 2 Boeing 720' s and tentatively plans to add 3 Douglas DC-4's, 1 long-range jet, and 3 turboprops or short- to-medium- range jets to its fleet by 1963. The purchase of new aircraft by other commercial opera- tors is unlikely. However, in 1959 RAS announced that it would acquire 2 Fokker Friendships through KLM by 1963, SAM antici- pated a need for 8 Curtiss C-46's or Douglas C-47's, and La Ur- raca planned to add a Curtiss C-46. SAM purchased 3 DC-4's in mid- 1960 to replace aircraft lost in 1959 and 1960 crashes. The acquisition of this equipment depends mostly on improved rate structures and better route allocations. GENERAL AVIATION More than 400 general aviation aircraft were registered in Colombia in fiscal year 1960, and all but 28 were U. S. made. The 20 operating nonscheduled airlines have a total fleet of more than 80 aircraft. About 5 carry cargo; most of the rest offer passenger and air taxi services. One firm, Aerotaxi, S.A., is owned by AVIANCA and operates 19 aircraft, mostly in air ambulance, ag- ricultural, advertising, photography, and patrolling services. It also provides scheduled feeder services from outlying points to some of AVIANCA' S principal domestic stops and maintains a few routes paralleling AVIANCA' s. Helicopteros Nacionales de Colombia, Ltda. (HELICOL), a charter helicopter service operated as a subsidiary of AVIANCA, provides passenger and cargo transportation for petroleum ex- ploration. Taxi Aereo de Santander (TAXADER), a privately owned airline, uses 12 aircraft on a widespread domestic service. It has been negotiating for international routes to Miami and New York and also plans to establish short international air routes to areas not now serviced by the large trunk carriers. About 12 business firms own aircraft which they use primarily to transport company personnel and cargo. Most of the planes en- 35 gaged in these activities are DC-3-type twin- engine transports. Various agricultural firms and associations own single- engine aircraft and, reportedly, one of the railroads owns helicopters and conventional single- engine equipment. An unknown number of privately owned aircraft are used for business purposes. Many privately owned aircraft pooled with aircraft owned by the clubs are used for instruction, charter taxi, or other business purposes. Several planes owned by a pipeline firm are used for patrol and maintenance purposes. Seven firms, operating a total of 31 planes, are engaged in crop dusting; a number of aircraft registered as privately owned are also used occasionally for this purpose. Most of the aircraft used for aerial surveying and map- ping are registered in other countries. The Escuela Nacional de Aviacion Civil Colombiana— EN ACC (National Aviation School), an official Government organization, uses 18 small planes for instruc- tional purposes, and one private school has 7. Many of the private and flying club planes are used for instruction. Other Government agencies operate 5 aircraft. MARKET POTENTIAL Air transportation has developed extensively because of the special topographical characteristics of the country and the rela- tively recent industrial development. The expected improvement of the economy and the continued industrial development should create an increasing demand for aircraft. The United States will probably continue to be Colombia's pre- ferred source for aircraft and aeronautical products. Great Britain and France may offer competition on future orders for turbine- powered aircraft, but AVIANCA's purchase of Boeing 720 jets should help to maintain the U. S. position. Easy sales terms, ready availability of dollar exchange, and requirements of the commercial operators will determine the market for surplus pis- ton aircraft. The state of the economy and dollar availability will be major factors in the sale of light planes. In January 1961, TAXADER was considering the purchase of 3 DC-6B's for a Miami/New York route, or smaller aircraft to ex- pand domestic services. In 1959 TAXADER estimated that by 1963 it would need 3 Doug- las DC-4's. Several other companies' needs by 1963 were esti- mated at 96 Piper PA-18's(A's and 150's) and 3 Champion 7-EC's. An import duty of 50 percent ad valorem is imposed on touring aircraft having a capacity of 4 passengers or less, but the duty is not imposed on such aircraft imported for instruction, fumigation, aerial photography, and public transportation. All other civil air- craft and helicopters may also be imported free. Import licenses for all aircraft must be approved by the National Council of Civil Aeronautics. A previous deposit of 20 percent of the import val- ue must also have been placed with the Exchange Registry Office, Bank of the Republic. 36 Colombian Civil Air Fleet— 5 10 Commercial airlines , total 87 Aerovias Nacionales de Colombia, S.A. (AVIANCA) Boeing 720B 1 Lockheed Constellation 749 3 Douglas DC-4 11 Douglas C-54 2 Douglas DC-3 20 Douglas C-47 11 De Havilland (Canada) Beaver 14 Cessna 4 Lockheed Super Constellation 1049 3 Lloyd Aereo Colombiano, S.A. (LLACSA) Curtiss C-46 1 Rutas Aereas de Colombia, Ltda. (RAS) Douglas DC-3 1 Douglas DC-4 1 Douglas DC-6B 2 Sociedad Aeronautica Medellin, S.A. (SAM) Curtiss C-46 4 Douglas C-47 2 Douglas DC-4 3 Compania Aerea el Burrito, S.A. Curtiss C-46 2 Lineas Aereas la Urraca (La Urraca) Luscombe 11-A 1 Douglas B-18 1 General aviation, total 423 Nonscheduled and air taxi 81 Aerotaxi, S.A. Cessna 195 4 De Havilland (Canada) Beaver 15 Aerovias Condor de Colombia, Ltda. (Aerocondor) Curtiss C-46 2 Aerovias Helices, Ltda. Fairchild Packet C-82 2 Aerovias Hoffman Consolidated PBY-6A 2 Aerovias del Llano (Aerollano) Budd C-93 Conestoga 1 Aerovias Pilotos Asociados (AVISPA) Cessna 180 5 Aerovias Santandereanos Pilotos Asociados (ASPA) Cessna 180 4 Asociacion Interamericana de Aviacion (AIDA) Fairchild Packet C-82 1 Consolidated PBY-5A 1 37 Colombian Civil Air Fleet— 5 10— Con. General aviation — Con. Nonscheduled and air taxi--Con. Lineas Aereas del Caribe, Ltda. (LIDCA) Fairchild Packet C-82 1 Lineas Aereas Orientales (LAO) Piper PA-20 2 Sociedad Occidental de Transportes Aereos (SOTA) Cessna 1 Noorduyn Norseman 2 Taxi Aereo del Caqueta (TACATA) Stinson 108 3 Cessna 170B 1 Taxi Aereo Colombiano (TACO) Noorduyn Norseman UC-64-A 2 Douglas B-18 1 Taxi Aereo Sabanero (TASS) Cessna 170B 2 Taxi Aereo de Santander (TAXADER) De Havilland (Canada) Beaver 2 Stinson 108 1 De Havilland Otter 4 Cessna 180 2 Douglas DC-3 3 Taxi Aereo el Llanero Cessna 170 A 4 Lineas Aereas Colombianas Expresas (LACE) Fairchi Id Packet C-82 2 Lineas Interamericanas Aereas (LIA) Curtiss C-46 3 Helicopteros Nacionales de Colombia (HELICOL) Bell 47 (helicopter) 8 Agriculture 31 Colombiana Agricola y Trabajos Aereos (CAYTA) Piper PA-18 7 Empresa de Fumigacion Aerea (EFA) Piper PA-18 2 Fumigacion Aerea Colombian (FARCA) Piper PA-18 6 Fumigacion Aerea y Materiales Agricolas (FAMA) Piper PA-18 2 Servicio de Fumigacion Aerea (SEFA) Stearman 1 Piper PA-18 4 38 Colombian Civil Air Fleet^510—Con o General aviation — Con. Agriculture — Con. Microfumor , Fumigaciones Aereas, Ltda. Piper PA-18A 6 Operaciones Agricolas Aereas (OPA) Piper PA-18 3 Business 22 Aeromercantil Leaver Piper PA-18A 3 Piper PA- 23 2 Andian National Corp. Cessna 180 1 Borrero & Caldas, Ltda. Cessna 180 1 Congregacion de Misioneros Cessna 170 1 Colombian Petroleum Co. Douglas C-47 1 Douglas DC-3 1 International Petroleum Co. Douglas DC-3 1 Douglas B-23 1 Mercantil Colombiana, Ltda. Ryan Navion A 1 Fairchild Packet C-82 1 Pato Mines Aero Commander 520 1 Servicio Aereo de Exploracion Forrestal Noorduyn Norseman UC-64-A 1 Socovias, Ltda. Piper PA-22-150 1 Madigan Hyland South American Corp. Piper 3 Texas Petroleum Co. Douglas C-47 1 Consolidated PBY-5A 1 Government , nonmilitary 23 Ministerio de Higiene Cessna 180 2 De Havilland (Canada) Beaver 1 National Aviation School 18 39 Colombian Civil Air Fleet=-510—Con o General aviation — Con. Government, nonmilitary — Con. Ministerio de Haciendas Cessna 170B 1 Ministerio de Obras Publicas Beechcraft 18-S 1 Flying clubs 6 Aeroclub de Colombia Piper PA-18A-135 1 Aeroclub Albatros Cessna 140A 1 Piper PA-18-95 1 Aeroclub Girardot Piper PA-18 2 Aeroclub Manizales Piper PA-18-135 1 Private 80 Piper PA-18A 12 Piper PA-23 4 Cessna 180 4 Ryan Navion 5 Luscombe 6 Cessna 172 4 Cessna 170B 6 Piper PA-11 1 Mooney M-18-LA. 2 Taylorcraf t 3 Piper PA-22 11 Ercoupe 415C 3 Cessna 182 5 Cessna 140 1 Douglas C-47 2 Piper PA-12 1 Stinson 3 Piper PA-14 1 Fair chi Id Packet C-82 1 Aero Commander 520 1 Beechcraft B-35 1 Rawdon T-L-T 1 Curtiss C-46 1 Noorduyn Norseman UC-64-A 1 Miscellaneous agriculture, air taxi, and flying club aircraft 180 Piper PA-18 72 Bell 47 (helicopter) 26 40 Colombian Civil Air Fleet— 510— Con. General aviation — Con. Miscellaneous agriculture, air taxi, and flying club aircraft — Con. Cessna 180 29 Cessna 170 15 Piper PA-22 13 Hiller UH-12 (helicopter) 4 Cessna 310 1 Beech 50 1 Bellanca 140M 3 Cessna 182 6 Cessna 195 4 Piper Apache PA- 23 6 Ecuador Ecuador is bounded by Colombia on the north, Peru on the east and south, and the Pacific Ocean on the west. It consists of four distinct geographical regions: Two parallel ranges of the Andes Mountains, having many peaks towering more than 16,000 feet, cross the country from north to south, and between these ranges are high plateaus divided by numerous transverse ridges; to the west and stretching along the Pacific coast are low hills and swampy lowlands; east of the Andes the land gradually slopes away to the low Amazon Valley of the Peruvian border; the Gala- pagos Islands, located 600 miles off the coast, cover an area of 3,000 square miles. The country has an area of approximately 105,000 square miles, about the size of Colorado. It is the second smallest of the South American Republics. The population of about 4 million is concen- trated largely in the mountain area. In recent years, however, increasing numbers of people have been moving to the coastal region. Agriculture and animal husbandry are the basic economic activities, providing employment for almost 50 percent of the 1.2 million economically active population and producing close to one- third of the national income. The climate is tropical in the Pacific lowlands and desert in the extreme south. Guayaquil is the larg- est city and the center of population; Quito is the capital. ROLE OF AIR TRANSPORTATION Commercial aviation initially developed in the populous moun- tain region, and then in the coastal region. Air operations in the area east of the Andes are chiefly nonscheduled or air taxi serv- ices. The trip of about 270 miles between Quito and Guayaquil 41 illustrates the importance of air transportation. It requires 9-11 hours by car and 12 hours by train, but less than 1 hour by plane. Air service is especially important as a means of improving eco- nomically the otherwise inaccessible and underdeveloped areas. The railway and highway transportation facilities are inadequate. Civil aviation is administered by the Directorate General of Civil Aviation (DGAC) in the Ministry of Public Works and Com- munications. In recent years the Government has been taking an increased interest in the administration and development of civil aviation. All commercial airports are Government owned, and several airfields are being improved. The Government has no financial interest in any air carrier and does not subsidize any private aviation enterprise. However, some exemption from land- ing fees is available from the Government to encourage the forma- tion and development of national air carriers. AIRCRAFT IN USE About 100 civil aircraft are registered, 30 of which are used by 7 commercial airlines and the balance for general aviation pur- poses. The total air fleet includes 3 Douglas C-47's, 1 DC-4, 1 DC-6, and 2 Curtiss C-46's. The rest are small 2-10 place types, including 11 helicopters. All the aircraft except a Junkers JU-52 are U. S. made. COMMERCIAL AIRLINES Service Commercial air transportation is served mostly by small pas- senger and cargo airlines, usually using 2-10 place aircraft. Larger aircraft are not used in many areas because of the limited volume of traffic and because the rough terrain makes construc- tion of adequate airfields difficult and expensive. The larger airlines have regularly scheduled domestic flights between the most important cities and some international flights. Aerovias Ecuatorianas, C.A. (AREA), offers scheduled flights from Quito to about 8 domestic points, using 3 C-47/DC-3's and a DC-4. Ecuatoriana de Aviacion provides a scheduled DC-6 in- ternational service connecting Guayaquil and Quito with Peru, Colombia, Panama, and the United States. Linea Internacional Aerea (LIA) operates a scheduled service between Quito and Guay- aquil, using C-46's and a Boeing Stratocruiser. Both scheduled and nonscheduled flights from Guayaquil to cities in the western provinces are conducted by Compania Ecuatoriana de Transportes Aereos (CEDTA), using 9 light aircraft; Servicios Aereos Na- cionales (SAN), using 8 light aircraft; and Vias Aereas Nacionales, S.A. (VIANSA), using 3 light aircraft. Similar service between Quito and Guayaquil, Quito and 6 cities of the northwestern prov- inces, and Quito and various towns in the eastern provinces is 42 conducted by Transportes Aereos Orientates (TAO), using 2 light aircraft and a C-47B. Approximately 50 airfields are located in Ecuador and 1 in the Galapagos Islands. Only the fields at Guayaquil and Quito can accommodate the heavy jet aircraft used in international opera- tions. The only aircraft overhaul and maintenance facilities are the small ones owned by the airlines. No flight or ground training schools exist, but a Link trainer course is offered by the Govern- ment and the Guayaquil Aero Club provides some flying instruc- tion in light aircraft. Ecuador is a member of the International Civil Aviation Organ- ization (ICAO) and has signed all of the major international civil aviation conventions. It has air agreements or arrangements with 10 other nations. The foreign flag carriers operating in the coun- try are Pan American-Grace Airways, Inc. (PANAGRA)andBran- iff International Airways, offering DC-7 service; Aerovias Naci- onales de Colombia, S.A, (AVIANCA), Super Constellation service; Royal Dutch Airlines (KLM), Super Constellation service; Aero- lineas Peruanas, S.A. (APSA), DC-6 service; and Air France, Boeing 707 service. All these airlines fly into Guayaquil, con- necting with the United States and other parts of the world. PA- NAGRA and AVIANCA also operate into Quito. Disposal and Reequipment Programs In 1959, Equatoriana planned to purchase by 1962 a second DC-6 and perhaps another 4-motor piston-engine aircraft. It also hopes to acquire a third DC-6 before 1964 if economic conditions are favorable. LIA recently replaced a C-46F aircraft with a Boeing Stratocruiser. In 1959 it planned to acquire by 1964 several DC- 6's for international flights, and by 1962 several 8-12 passenger aircraft of the Lodestar type for air taxi operations in the high- land area. The DC-6 acquisition was to be rented; purchase de- pended on the outcome of negotiations for flight permits into for- eign countries. If these negotiations were successful, the com- pany would be in the market after 1964 for the exchange of some of the DC-6's for turboprop or jet equipment. LIA feels that de- spite strong competition from the large international air carriers, an expanding market still exists for its low-fare and less luxuri- ous services. AREA lost a Fairchild F-27 in a November 1960 crash and then acquired a DC-4. When the F-27 which crashed was acquired in late 1959, AREA reportedly was considering the purchase of another, and possibly several C-47's by 1964. TAO purchased a C-47B in 1960 and disposed of a Noorduyn Norseman UC-64-A. U. S. equipment is preferred because of ease of maintenance and availability of spare parts. 43 GENERAL AVIATION Almost no business or pleasure flying is done. Two individuals in Guayaquil own 3 private planes, and the Guayaquil Aero Club, the only flying club, also has 3 aircraft used mainly for instruc- tion. Crop dusting is the fastest growing part of civil aviation. The success of the banana crop, the country's leading export, de- pends mostly on adequate fungus control by airplane or helicopter spraying. Twelve companies are now engaged in this activity, as compared with only two in 1957. They operate a total of 54 air- craft, including 10 helicopters. Air taxi services are provided by 2 firms- ATESA and ECUAVlA-operating a total of 10 utility aircraft, including 1 light twin- engine plane and 1 helicopter. MARKET POTENTIAL Continued economic growth is expected. The National Planning and Economic Coordination Board represents the central Govern- ment in promoting economic development. The United States In- ternational Cooperation Administration, now the Agency for Inter- national Development, and the United Nations have provided tech- nical assistance, and the International Bank for Reconstruction and Development has provided financial aid for special programs. The rate of air transportation development depends mostly on im- proved airport and airway facilities. The recent improvements at the Quito and Guayaquil airports promise an increase in domes- tic and international traffic in the next few years. The nearest FAA-approved repair base is in Costa Rica. Establishment of adequate maintenance repair facilities would advance civil avia- tion in Ecuador and in neighboring countries. The market potential for commercial transport aircraft by 1964 is good; about 10 piston- engine planes, ranging from Lodestar to DC-6 types, will probably be in demand. Crop dusting now offers the best market for utility aircraft sales. Business and pleasure flying may expand considerably, however, because many large haciendas are located in areas poorly served by other means of transportation. United States banks generally require guaranty by an Ecuadorean bank of payments for airplane purchases made by Ecuadorean corporations. Reportedly this requirement limits potential sales. Low-cost insurance of payments through U. S. insurance companies has been suggested as a better and cheaper means of guaranty. The availability of foreign exchange still depends on the strength of the domestic economy and the continued expansion of export markets. No import restrictions are imposed on aircraft, spare parts, or other aeronautical equipment. Only an import permit approved by the Director General of Civil Aviation is required. 44 Ecuador ean Civil Air Fleet— 102 Commercial airlines , total 32 Aerovias Ecuatorianas , C.A. (AREA) Douglas C-47/DC-3 3 Douglas DC-4 1 Cessna 310 1 Compania Ecuatoriana de Transportes Aereos (CEDTA) Beechcraf t C-45 2 Stinson V-77 1 Piper PA-22-150 6 Ecuatoriana de Aviacion Douglas DC-6 1 Linea Internacional Aerea (LIA) Curtiss C-46A 2 Boeing Stratocruiser 1 Servicios Aereos Nacionales (SAN) Cessna 170 4 Cessna 180 1 Cessna 182C 1 Beechcraf t C-45 2 Transportes Aereos Orientales (TAO) Junkers JU-5 2 1 Douglas C-47B 1 Cessna 180C 1 Vias Aereas Nacionales, S.A. (VIANSA) Cessna 180 3 General aviation, total 70 Air taxi 10 ATESA Cessna 182C 2 Compania Ecuatoriana de Aviacion, C.A. (ECUAVIA) Piper PA-18-150 2 Piper PA-18A-150 2 Piper PA-23 1 Cessna 172 1 Bell 47G-1 (helicopter) 1 Piper Super Cub 1 Agriculture 54 Atomec Piper PA-18A-150 6 Piper PA-18-150 4 Aero Fumigadora Piper PA-18A-15 4 Piper Apache PA-23 1 45 Ecuadorean Civil Air Fleet— 102— Con. General aviation — Con. Agriculture — Con . Aero Fumigadora — Con. Cessna 170A 1 Cessna 170B 1 Fasa Piper PA- 25 2 Stearman A-75 2 Export adora Bananera , S.A. Hiller UH-12C (helicopter) 4 Hiller UH-12E (helicopter) 1 Ryan Navion-B 1 Sociedad Agricola Industrial Hiller UH-12B (helicopter) 1 Hiller UH-12C (helicopter) 1 Cadasa Piper PA-18A-150 12 Piper PA-18-150 4 Piper Super Cub 3 Agro Aereo Hiller UH-12E (helicopter) 1 Furtera Sudamericana Hiller UH-12C (helicopter) 1 Ubesa Piper PA-18-150 1 Aerolineas Bananera Agricola Piper Apache PA- 23-160 1 Standard Fruit Bell 47G-1 (helicopter) 1 Falasa Piper PA-18A-150 1 Private 3 Piper PA- J3C-65 1 Bellanca 14-13-2 1 Cessna 182C 1 Flying club 3 Guayaquil Aero Club Piper PA-18 2 Cessna 140 1 46 Paraguay Paraguay is landlocked. It has a total area of more than 157,000 square miles, is about the size of California, and has a population of approximately 1.7 million. The west, consisting mainly of low, undulating plains having a maximum elevation of 750 feet, is drained by sluggish, unnavigable rivers and contains vast stretches of grass and woodlands. Eastern Paraguay is rolling and heavily wooded, having swamplands, vast plains, and low plateaus with maximum elevations of about 2,000 feet. Approximately 95 per- cent of the population is located in this area. Two- thirds of east- ern Paraguay is in the Temperate Zone, but the climate is sub- tropical. Most of the rest of the country is in the Torrid Zone and has a tropical climate. Rainfall averages about 80 inches annu- ally along the eastern border. Paraguay is one of the least developed countries in the Western Hemisphere. Its economy is based on agriculture, livestock, and forestry. Industrial activity is limited to processing semifinished manufactures for export. Asuncion, the capital, is the financial and commercial center of the country. Through its port on the Paraguay River passes almost all of the country's international trade. ROLE OF AIR TRANSPORTATION Civil aviation was started in 1929 by an Argentine company which provided service between Asuncion and Buenos Aires. Air transportation is important because of the lack or inadequacy of surface transportation facilities. Commercial airlines connect the most important domestic points, some of which are practically inaccessible by surface transportation. Air taxi services, de- veloped in 1940, link most of the other population centers of the country. The scheduled airlines are Government owned and op- erated. The importance of international air transportation is highlighted by the fact that traveling from Asuncion to Buenos Aires takes 56 hours by train or several days by ship over the Paraguay- Parana Rivers system, but flying time is only 4 hours. The official Government agency regulating civil aviation is the Direccion General de Aeronautica Civil, established in October 1950. The Administration Nacional de Aeropuertos Civiles (ANAC), established in January 1952, develops and regulates do- mestic civil airports. Both organizations operate under the jur- isdiction of the Ministry of National Defense. Technical assist- ance is provided by the International Civil Aviation Organization (ICAO) and a Civil Aviation Assistance Group of the U. S. Opera- tions Mission in Paraguay. AIRCRAFT IN USE The Paraguayan civil air fleet has almost 70 aircraft, of which all but 8 are U. S. made. The 7 commercial airlines own and op- 47 erate more than 20 planes, 6 of which are under military regis- tration although used for civil operations. More than half of these planes are multiengine, most of the rest are 2-5 passenger, sin- gle-engine utility types. The almost 50 aircraft in general avia- tion are used for business and instruction. Except for 2 twin- en- gine utility planes and a C-46, all these aircraft are small single- engine models. COMMERCIAL AIRLINES Service Two national flag carriers, Linea Aerea de Transporte Nati- onal (LATN) and Transporte Aereo Militar (TAM), offer sched- uled domestic services. TAM, established in May 1955, is part of the Paraguayan Air Force, but it operates as a passenger and cargo airline on a commercial basis to points otherwise without transportation facilities. It was established to promote civil avi- ation, to train pilots, and to aid in the economic development of the country. It uses 5 DC-3's for scheduled domestic passenger service to about 12 points and for domestic and international cargo and charter flights. LATN was established by the Government in 1944 and has been a wholly Government corporation since 1954. It has a monopoly on air taxi services and uses light utility air- craft for ambulance, charter, and regularly scheduled passenger flights throughout the country. A Catalina flying boat owned by this firm is under military registration. LATN's regular routes into areas in which TAM's larger aircraft cannot operate are served with small planes. Both lines share the air charter serv- ice, according to the landing capabilities of their planes. LATN's cargo services are limited. Five nonscheduled carriers offer domestic and international services. Alas Guaranies and Aero-Car ga provide cargo flights between Asuncion and the major population centers and transport essential foodstuffs and meat into Paraguay from neighboring countries, using 1 aircraft each. The other 3 commercial airlines offer mostly international cargo flights, using a total of 3 aircraft including a C-46. The foreign flag air carriers serving Paraguay are Aerolineas Argentina s,Na clonal (Brazil), Braniff International Airways, Panair do Brasil, Primeras Lineas Uruguayas de Navi- gation Aerea, Lloyd Aereo Boliviano (LAB), and Pan American World Airways. About 12 airports in Paraguay can accommodate aircraft the size of a DC-3; several hundred landing strips accommodate small private and air taxi planes. Besides Asuncion, which has the only hard- surface runway in the nation, Concepcion and Encarnacion also have foreign flag connections— with Argentina and Brazil, respectively. International carriers from other countries operate through Asuncion National Airport, the facilities of which are being improved with assistance from the Export-Import Bank. No air- 48 craft manufacturing or assembly firms exist in Paraguay. Major overhaul work is assigned to Brazilian repair facilities. Minor repairs for TAM and LATN planes are undertaken by the Gov- ernment. Paraguay has signed bilateral air agreements with the United States, Brazil, Uruguay, Chile, and the Netherlands. Flights from other countries are covered by Paraguayan permits. Disposal and Reequipment Programs TAM does not plan to dispose of any of its fleet. It will prob- ably be in the market for several DC-3's, DC-4's, and Convair 340' s or 440' s. In 1959 LATN planned to replace all its aircraft with twin- engine Cessnas. Since then, however, the total fleet has increased rather than decreased, and no reports are available about the Cessnas, which were to have been purchased by 1961. Alas Guaranies* PB4Y-2 Privateer will probably be replaced in the near future. GENERAL AVIATION There is no pleasure flying in Paraguay, the majority of the aircraft not used for airline operations being used for business flying. A United States firm engaged in quebracho manufacture, meat production, and oil exploration uses a C-46 and a Cessna for passenger and cargo transportation. Other business firms use their aircraft similarly. Several Government ministries have executive planes. The aero clubs' planes are used exclusively for instructional flying. The rest of the private planes are used by ranchers. Air taxi service is considerable. It is a Govern- ment monopoly operated by LATN. Aerial patrol or survey work and crop dusting have not yet developed. MARKET POTENTIAL The market potential for civil transport aircraft is limited by the country's poor financial position and the small volume of traf- fic. Reportedly, however, there may be a market for 2-4 DC-3's, 1 C-46 and DC-4, or 2-3 Convairs. U. S. equipment is preferred by all of the aviation organizations because operational personnel are familiar with it. Because the Government has not been able to deal on cash terms, aircraft purchases depend on adequate fi- nancing arrangements. Financing might possibly be arranged through the Central Bank of Paraguay, through lease purchase arrangements or through the sale of existing equipment. The acquisition of aircraft by the domestic commercial airlines is limited because the Government maintains a near monopoly on domestic scheduled passenger airline operations through TAM. This limits other commercial operations to international passen- ger services, thus restricting the expansion of commercial civil aviation because not enough traffic now originates in Paraguay to support a wholly international operation. 49 The Government supports civil aviation by exempting all planes and equipment for private use from import duties, consular fees, stamp tax, and sales tax. Through the air force, the Government provides gasoline and small repairs free of charge to the flying club planes. The planned improvement of surface transportation will even- tually decrease the need for private business flying. But as the economy improves, international traffic should be stimulated by businessmen and tourists. Cargo operations have not been sig- nificant, but as commerce and industry improve, demand should develop. Maintenance facilities also should develop. As aviation expands, the need for servicing facilities will grow. Most of the planes acquired by the domestic commercial operators have been reconditioned ones. The low initial cost of such planes has been suitable for the inexpensive cargo and air taxi services provided. These aircraft require continual repair and overhaul and spare parts. A deposit of 200 percent of the f.o.b. value is required on im- ports of airplanes and parts and an exchange surcharge of 24 per- cent is levied on the c.i.f. value when equipment is shipped from noncontiguous countries. The Central Bank collects the surcharge at the time of sale of foreign exchange. Paraguayan Civil Air Fleet— 66 Commercial airlines , total 22 Lineas Aerea de Transporte Nacional Beechcraf t Twin 3 Beechcraf t Bonanza 6 Noorduyn Norseman 1 Stinson. 1 Convair Catalina PBY 1 Transporte Aereo Militar (TAM) Douglas DC-3 5 Lloyd-Aereo Paraguayo Curtiss C-46 1 Alas Guaranies, S.A. Convair Privateer PB4 Y-2 1 Aero-Carga, S.A. De Havilland 1 Intercontinental, S.A. Beechcraf t , Twin 1 Cia Aviacion Paraguaya , S.A. Cessna 182-A 1 50 Paraguayan Civil Air Fleet— 66— Con. General aviation, total 44 Business 12 International Products Corp. Curtiss C-46 1 Cessna 175 1 CIPA, S.A. Ryan Navion 1 Pure Oil Co. Cessna 180A 1 Manufactura de Pilar, S.A. Piper Apache PA- 23 1 SACRIFIC Ercoupe 1 Corporacion Paraguaya de Carnes Cessna 182 1 La Inmobiliaria, S.A. Cessna 180 1 Carlos Casado Ltda., S.A. Cessna 180 1 COINPA, S.A. Cessna 170 1 Domingo Fassardi Ltda. , S.A. Beechcraf t 35 Bonanza 1 Liebig's Extract of Meat Co., Ltd. Cessna 182B 1 Private 20 Aeronca 1 Cessna 190 1 Cessna 170A 2 Cessna 172 2 Cessna 182 6 Cessna 182C 1 Saab Saf ir 1 Cessna 172A 1 Ercoupe 1 Cessna 175 1 Auster 1 Stinson Voyager 1 Piper 1 Government, nonmilitary 5 Ministerio de Salud Publica y Prevision Social Beechcraf t 50 Bonanza 1 51 Paraguayan Civil Air Fleet— 66— Con. General aviation — Con. Government, nonmilitary — Con. Ministerio de Defensa Nacional Cessna 180 1 Piper 1 Ministerio de Obras Publicas y Comunicaciones Cessna 180 1 Piper 1 Flying clubs 7 Club de Planeadores Beechcraf t Twin 1 Aero Club del Paraguay Neiva Paulistinha 3 Stinson 2 Niess 1 Peru Peru is the third largest country in South America, its area of more than 500,000 square miles is about twice that of Texas. It has a 1,400-mile coastline bordering the Pacific Ocean. The giant Andes Mountains parallel the coast and slope eastward to the lowlands which cover about 60 percent of the country. The population in mid- 1960 was estimated at almost 11 million, of which about 56 percent lived in rural areas. The economy is based mostly on agriculture, including animal husbandry and forestry, but mining— particularly petroleum pro- duction—and industry are becoming increasingly important. The economy should improve because of the existing high level of for- eign trade and Central Bank reserves, the basic strength of the currency, the relative stability of prices, and the increased avail- ability of foreign exchange. ROLE OF AIR TRANSPORTATION Peru has fairly well -developed surface transportation systems. Railroads and trucking carry a substantial part of all domestic bulk freight traffic, and the railroads also carry much of the total domestic passenger traffic. Rivers provide the only means of surface transportation in most of eastern Peru. Ocean shipping lines carry the greatest part of the foreign trade. Air service is especially important for flights over the Andes to areas which are mostly inaccessible by surface transportation. It accounts for most international passenger traffic, but for only a limited part of total international cargo. Since 1954 both domestic and interna- tional air traffic have increased steadily. Aerial surveys have 52 helped improve the national economy by aiding the development of mineral resources. Crop dusting and whale searching are other important air services. The Ministry of Aeronautics (Ministerio de A eronautica) through the Bureau of Civil Aeronautics (Direccion General de Aero- nautica Civil), which legally must be headed by a Major General of the Peruvian Air Force, controls civil aviation. Policy matters involving operating permits are sometimes referred to the Con- sultative Council on Civil Aeronautics (Consejo Consultivo de Aeronautica Civil). The Government promotes civil aviation. It operates a carrier airline through an agency of the Bureau of Civil Aeronautics, and supports the flying clubs. It encourages the op- erations of domestic airlines, but it does not grant subsidies. In 1958 the Government agreed to the establishment of a Civil Avia- tion Assistance Group as part of the U. S. Operations Mission in Peru. The group would help plan the new Lima airport, train traffic control and airways personnel, and select and maintain new and improved equipment. Progress is reported to be slow but promising. Peru is a member of the International Civil Aviation Organiza- tion (ICAO), whose regional office for Latin America south of Mexico is at the Lima airport. Bilateral air transport agreements are in effect with the United States, Canada, Spain, the Netherlands, Honduras, Brazil, Cuba, Chile, the United Kingdom, Panama, and Switzerland. AIRCRAFT IN USE More than 180 civil aircraft were registered in Peru in 1959- 60, of which all but 6 were U. S. made. The commercial airlines operated almost 60 planes; the rest were used in general aviation activities. The principal U. S. -manufactured aircraft were 77 Stearmans, 23 Pipers, 18 Cessnas, 11 Douglas DC-4's, and 11 Douglas DC-3/C-47's. COMMERCIAL AIRLINES Service The major scheduled airline is the privately owned Compania de Aviacion "Faucett", S A. y established in 1928 and one of the oldest airlines in Latin America. It operates its own pilot school, a complete FAA certificated maintenance shop, and a fleet of 18 aircraft. Reportedly, about 22 percent of the company's outstand- ing stock is held by Pan American-Grace Airways, Inc. (PANAGRA). In 1960 Faucett was authorized to offer international services; its domestic routes now serve all principal cities. Reg- ularly scheduled international passenger- cargo service is also offered by Aerolineas Peruanas, S.A. (APSA). Reportedly, this airline is controlled by TAN airlines of Honduras, which in turn 53 is controlled by U. S. capital. APSA offers services from Lima to Miami, Santiago, and Buenos Aires, using DC-6's. The Government owns and operates Transportes Aereos Mili- tarcs (TAM), using 14 aircraft for domestic services parelleling many of Faucett's routes, and for semischeduled flights to other- wise unserved jungle areas. The Summer Linguistics Institute (Institute* Linguistico de Verano) of the University of Oklahoma operates a subsidiary nonscheduled passenger-cargo service for TAM. Until its operations were suspended in 1959, Transposes Aereos Peruanas, S.A. (TAPSA), provided regularly scheduled domestic passenger-cargo services. The airline may be reactivated. In addition to scheduled services, TAPSA also offered charter flights, using 4 aircraft. Aero-Taxi, S.A. is a U. S. -Peruvian-owned nonscheduled air taxi service, operating 3 Cessnas. Its main customers are min- ing companies requiring executive transport services. Expreso Aereo Peruana, S.A. is a U. S. -Peruvian-owned company, operat- ing a charter service. This company lost 2 Fairchild C-82's in 1959 crashes and has been operating 1 plane leased from a domes- tic business firm. Foreign airlines furnishing regularly scheduled services to Peru are as follows: Pan American-Grace Airways, Inc. (PANAGRA) Braniff International Airways; Royal Dutch Airlines (KLM); Ca- nadian Pacific Airlines (CP A); LineaAeropostal Venezolana (LAV) Aerovias Panama (AP A); Acrovias Nacionales de Colombia (AVIANCA); Panair do Brasil; LineaAerea Nacional Chilena (LAN) Lineas Aereas de Nicaragua (LANICA); and Air France. The Peruvian Airports and Commercial Aviation Corporation (Corporacion Peruana de Aeropuertos y Aviacion Comer cial— CORPAC), a civilian organization, has as its major functions the construction, maintenance, and improvement of civil and com- mercial airfields; airport administration; the provision of airways services; and the training of personnel. In April 1959, of the 37 airports being used, only 4 could ac- commodate planes the size of the DC- 7 or larger; 3 others could handle planes the size of the DC-6, and 7 could handle planes as large as the DC-4. Twenty -two airports could take no planes larger than the DC- 3, and 1 airport could accommodate only light utility planes. Five of the airports handled international flights. The new Lima-Callao International Airport was officially opened in October 1960, giving Peru one of the most modern airport in- stallations in Latin America. Disposal and Reequipment Programs No plans for aircraft disposal have been reported. APSA has 2 turboprop Lockheed Electras on order. These aircraft will be operated on the airline's routes from Lima to Panama City and Buenos Aires. Reportedly, credits have been approved for the 54 Government's purchase of 5 French-made helicopters. Faucett recently purchased several DC-6B's for international service from Lima to Miami and New York. It plans to replace the DC-6's with turboprops or jets when traffic demand increases. GENERAL AVIATION More than 120 aircraft are used in general aviation activities. Six companies are engaged in crop spraying and dusting, using more than 90 planes. Business flying is limited mostly to the for- eign oil and mining companies. Five firms operate about 8 air- craft, and one of them, Le Tourneau, also engages in commercial nonscheduled flying. A whaling company, Consorcio Ballenero, S.A., uses 1 Piper aircraft. Two flying clubs have 9 aircraft used mainly for instructional flying. The University of Oklahoma's In- stitute Linguistico de Verano, a nonprofit organization conducting scientific studies of the Indian languages and cultures, uses about 6 of its 16 aircraft-- including a PBY, a Grumman amphibian, and several single- engine land planes— for access to isolated jungle areas. The Institute also operates a mail and equipment delivery service to army posts in the jungle. Reportedly, several Govern- ment ministries operate planes for official use. Private flyers use about 14 aircraft. MARKET POTENTIAL No immediate major changes are expected in the status of Peru- vian civil aviation. Commercial aviation will continue to be im- portant partly because more areas will be opened for exploration, exploitation, and development. The large domestic carriers are expected to continue adding modestly to their fleets as economic conditions improve. No switch to jet aircraft is now anticipated. Business and private flying will expand only modestly because of the limited number of public airfields in isolated areas and the lack of large-scale industrial development. Replacements and new aircraft for domestic use must be able to make quick transitions from sea level to altitudes of 20,000 feet and to takeoff and land on short sod strips. Helicopters have not been particularly popular because their service ceiling char- acteristics are considered inadequate for use in the high Andes Mountains. Peru offers a small potential market for U. S. surplus piston- engine aircraft because U. S. equipment is preferred and most of the aircraft in the existing domestic transport fleet are nearing obsolescence. Prices and terms of payments are important fac- tors in the procurement plans of the domestic airlines. Aircraft of all types are handled by a number of distributors. No aircraft are domestically manufactured, although Faucett has assembled several Stinson models. Many aircraft buyers purchase in per- son in the United States. There are no import duties as such on aircraft or parts, but a surtax ranging from 9.5-13.9 percent of c.i.f. value is levied. ^ Peruvian Civil Air Fleet— 182 Commercial airlines , total 58 Scheduled 38 Compania de Aviacion "Faucett", S.A. Douglas DC-4 4 Douglas DC-3 4 Douglas C-47B 6 Stinson 4 Transportes Aereos Militares (TAM) Curtiss C-46F 4 Douglas C-47 3 Douglas DC-3 4 De Havilland (Canada) Beaver 3 Aerolineas Peruanas, S.A. (APSA) Douglas DC-6B 1 Curtiss C-46B 1 Transportes Aereos Peruanos, S.A. (TAPSA) Curtiss C-46 4 Nonscheduled 20 Aero- Taxi, S.A. Cessna UC-78 3 Expreso Aereo Peruano, S.A. (EAPSA) Fairchild Packet C-82 1 Instituto Linguistico de Verano Aeronca 3 Noorduyn Norseman 3 Grumman (amphibian) 1 Convair Catalina PBY 1 Cessna 180 2 Cessna UC-78 1 Helio Courier 5 General aviation, total 124 Agriculture 93 Servicios Aereos Agricolas, S.A. (SAASA) Piper J-3 3 Piper PA-18 5 Howard 1 Alas Agricolas, S.A. (AASA) Stearman 7 Piper PA-18 2 Cessna 170 1 Fumigadora Alas Iquenas, S.A. (FAISA) Piper PA-18 5 56 Peruvian Civil Air Fleet— 182— Con. General aviation — Con. Agriculture — Con. Compania Aerea de Servicios Agricolas, S.A. (CASASA) Stearman 9 Cessna 170 1 Compania Aerea Fumigadora Agricola (CAFA) Stearman 28 Compania Aero-Comer cial , S.A. (CACSA) Stearman 29 Waco 1 Stinson 1 Business 8 Consorcio Ballenero, S.A. Piper Apache PA-23 1 Marcona Mining Co. Douglas DC-3 1 Southern Peru Copper Corp. Helio Courier 1 Aero Commander 1 Minerales y Metales, S.A. Fairchild Packet C-82 1 Compania Minera Acari Beechcraf t 1 Le Tourneau del Peru, S.A. Cessna 195 1 Piper 2 Flying clubs 9 Aero Club de Lima Stearman 3 Piper J-3 1 Champion 2 Aero Club de Trujillo Stearman 1 Vultee 1 Piper PA-18 1 Private 14 Cessna 170 6 Cessna 120 1 Cessna 172 1 Cessna 180 1 Piper Super Cub 2 Piper PA-22 1 Arrow 1 Champion 1 57 Uruguay Uruguay has an area of more than 72,000 square miles, a little greater than that of Oklahoma, and a population of almost 3 mil- lion. The smallest South American country, it is one of the most densely populated and is among the top three in per capita income. One- third of the total population lives in Montevideo— the capital, chief port, and major financial and industrial center. The liter- acy rate, 88 percent of the population 10 years of age and over, is the highest in South America. Most of the country is hilly, but the elevation never exceeds 2,000 feet. Uruguay is bordered on the east and south by the At- lantic Ocean and the Rio de la Plata, and on the north by Brazil. In the west, the Uruguay River separates the country from Argen- tina. The economy is traditionally agricultural, and livestock ac- counts for about four -fifths of the total value of exports. Agri- culture is decreasing in importance, however; and industry has grown substantially in recent decades. The annual value of foreign trade has declined. The chief mar- kets once were in Europe, especially the United Kingdom, but since World War II the U. S. has been the principal buyer. Al- though the U. S. is now usually the chief supplier, the United King- dom sometimes takes the lead. Colonia, located about 75 miles west of Montevideo, is an important center for shipments and transportation to Argentina. ROLE OF AIR TRANSPORTATION Domestic air services have not increased greatly, owing to the small size of the country and the small aircraft which must be used because of the inadequate ground facilities. The high- way system, consisting of about 28,000 miles of roads, is the principal means of internal transportation. Buses carry more than 75 percent of the domestic passenger traffic, and trucks carry about 80 percent of the freight. The commercial airlines offer regularly scheduled flights to four South American coun- tries and plan to add more services. The Uruguayan Government controls, supervises, and promotes all civil aviation activities through the Bureau of Civil Aero- nautics (Direccion de Aeronautica Civil), which is under the jurisdiction of the Ministry of Defense. It owns and operates all airports and acts as contractor for airport construction. It also promotes civil aviation by exempting foreign and domestic airlines from all taxes on gasoline, spare parts, and other avi- ation supplies. The Government, recognizing the inadequacy of domestic and international transportation, has established a coordinating agency to promote and protect the national interest in aviation. 58 AIRCRAFT IN USE The civil air fleet totals almost 430 aircraft, of which all but 23 are U.S. made. Except for 10 commercial transports and a 14-seat Douglas DC-2 in private business use, all the planes are 1-5 passenger types. The 2 operating commercial airlines use Douglas DC-3's, Vickers Viscounts, Short hydroplanes, and a Curtiss C-46 for passenger-cargo service. A Ryan Navion is maintained for instruction. The balance of the civil air fleet is used in general aviation activities. COMMERCIAL AIRLINES Service The two domestic scheduled commercial airlines are the Gov- ernment-owned Primeras Lineas Uruguayas de NavegacionAerea (PLUNA), offering both international and domestic flights, and the privately owned Compania Aeronautica Uruguaya, S 9 A 9 (CAUSA), offering only international service. PLUNA, the only airline flying to the interior of the country, has a fleet of 4 DC-3's and 3 Viscounts, operating on routes into Brazil, Bolivia, Argentina, and Paraguay, and between most of the important domestic cities. Although PLUNA is not granted monopoly privileges, its position as the major national flag car- rier in domestic and international air traffic is practically un- contended. Its charter states that no Government authorization for the operation of new airlines within the country will be granted without previous consultation with PLUNA' s board of directors. CAUSA, operating since 1938, has 2 hydroplanes which are used between Montevideo and Buenos Aires and a Curtiss C-46 Super C for scheduled service between Montevideo and Colonia and Buenos Aires. This C-46 will also be used on three re- cently initiated international routes. About 15 foreign flag air- lines offer international service, including connections with the U.S. and Europe. All commercial airports are Government owned and operated. Carrasco National Airport is the central terminal for all inter- national landplane traffic. Except for Carrasco, the commercial airports have unpaved runways and' are unable to accommodate large aircraft. CAUSA uses hydroports at both Montevideo and Colonia. No aircraft manufacturing, assembly, maintenance, or overhaul firms exist. The airlines do their own minor mainte- nance work. Uruguay is a member of the International Civil Aviation Organization (ICAO), and has signed 10 bilateral air agreements. 59 Disposal and Reequipment Programs The two commercial airlines operating in Uruguay have no plans to sell or convert their aircraft. In 1960 CAUSA purchased 2 Douglas DC-6's for a new service between Uruguay and the United States. And it recently purchased 1 Curtiss C-46 Super C and hopes to acquire another. Interocean Airways, granted certification in mid- 1959, was interested in acquiring 3 DC-6B's. U.S. aircraft are usually preferred, and the British planes in use were purchased only because of easy financing terms. GENERAL AVIATION More than 400 civil aircraft are used in general aviation ac- tivities. Only 15 of these planes are not U.S. made. One Cessna is used for aerial photography, 25 aircraft for crop dusting and fumigation, 5 for air ambulance services, and a total of 101 for instructional flying by the 35 flying clubs. About 271 planes are used for private or pleasure flying, 3 for business flying, 1 for air taxi operations, and 11 for Government nonmilitary activity. Most of the private aircraft registered are also engaged in some type of business flying. MARKET POTENTIAL The Government is now carrying out a stabilization program. It has been controlling credit, wages, and prices in its efforts to eliminate inflationary pressures. The deficit will probably not be eliminated, however. The market for U.S. transport aircraft is limited because of the small size of the domestic air transportation industry and the acute shortage of foreign exchange. Nonoperative companies such as Interocean Airways might, however, offer a potential market for surplus aircraft if they and foreign airlines engage in a joint venture for international operations. Uruguayan law requires any national airline to be at least 51 percent controlled by domestic capital. In September 1960, import controls and surcharge and prior deposit requirements were removed. The outlook is favorable for the sale of light planes for use by the large ranch owners and for ambulance, crop dusting, and air taxi services. Uruguayan Civil Air Fleet—429 Commercial airlines , total 11 Compania Aeronaut ica Uruguay, S.A. (CAUSA) Short Sunderland (hydroplane) 1 Short Sandringham (hydroplane) 1 Curtiss C-46 Super C 1 60 Uruguayan Civil Air Fleets 429 —Con. Commercial airlines — Con. Primeras Lineas Uruguayas de Navegacion Aerea (PLUNA) Douglas DC-3 4 Vickers Viscount 769D 3 Ryan Navion 1 General aviation, total 418 Air taxi E. Errandonea Cessna 180 1 Aerial survey Instituto Aero-Fotogrametrico Uruguayo, S.A. Make unknown 1 Air ambulance Centro de Aviacion de Salto Ryan Navion 1 Cessna 180 1 Aero Club de Melo Cessna 170 1 Aero Club de Paysandu Beechcraf t 35 Bonanza 1 Department of Rio Negro Chrislea CH3 1 Agriculture Direccion General de Lucha Contra la Langosta Piper 7 Cessna 1 Grasshopper Extermination Commission Piper J-3C-65 2 Lucha Contra Plagas Agricolas Aeronca 7AC 2 Piper J-3C-65 2 Azucarera del Litoral, S.A. Rawdon 1 Chadkling & Moreno Rawdon 1 Compania Aerea de Fumigaciones Agricolas (CAFA) Piper PA- 18 7 61 Uruguayan Civil Air Fleet— 429— Con. General aviation — Con Agriculture — Con. Compania Uruguaya de Pulverizaciones Aereas Piper PA-18 1 Rawdon 1 Business Pike & Co. Rearwin 8135 1 Institute Fotogramo, Ltda. Cessna UC-78 1 Consejo Departmental Piper PA-22 1 Flying clubs Piper Cub (44), PA-22 (1), PA-20 (1) 46 Stinson 108 4 Taylorcraf t 16 Rearwin 175 2 Luscombe 8 Silvaire (3), 11 (1) 4 Bucker- Jungmann 1 Aeronca 65 (1), 50 (3), 7AC (5), 11AC (4) 13 Cessna 140 (3), 170A (3), 172 (1) 7 Nicca 1 CAP* 4 Paulistinha 4 Ryan Navion A 1 Beechcraf t C-35 Bonanza 2 Government , nonmi 1 i t ar y Air Force Fairchild PT-26 5 De Havilland Chipmunk 1 Piper AE1 1 Direccion Aeronautica Civil Stinson 10 1 SI AM Piper PA- 23 1 Municipal Headquarters, Treinta y Tres Cessna 170 1 Municipal Headquarters, Tacuarembo Cessna 170A 1 Private De Havilland Moth 2 Potez 43 1 62 Uruguayan Civil Air Fleet— 429— Con. General aviation — Con. Private — Con. Porterfield 90 1 Taylorcraf t Cub (2) , DC-65 (6) , DC-12 (10) , -20 (1) 19 Aeronca 65 (1), -7AC (3), -15 AC (2), -7EC (3).. 9 Waco TKB7 1 Stinson 10 (2) , -108 (18) 20 Piper J Cub (11), PA-12 (12), PA- 23 (7), PA-18 (14) , PA- 11 (4) , PA-20 (9) , PA-22 (11) , PA- 25, -14, -15, -17 (4) 72 Miles Hawk 1 Rearwin 8135 1 Culver L.F.A 1 Douglas DC-2 1 Cessna 140 (4), UC-78 (2), 125 (1), 180 (13), 170 (5), 182 (32), 172 (23), 310 (2), 195 (1).. 83 Neybar 1 Ercoupe 415 7 Beechcraft 35 Bonanza (15), 50 Twin Bonanza (1), D17S (1) 17 Luscombe 8 9 Ryan Navion . 9 Globe 0C-1B 4 Bellanca Cruiser 3 Stearman PT-17 1 Auster V 2 Fairchild UC-61K 1 Rawdon 2 Republic RC-3 Seebee 2 Norcersen 1 * Companhia Aeronautica Paulistha (Brazil). Venezuela Venezuela, having an area of more than 352,000 square miles, is the sixth largest country in South America and is one- third larger than Texas. It has a coastline of more than 1,700 miles. Approximately four- fifths of the more than 7.3 million population is concentrated in the northern and coastal regions; most of the remaining fifth is in the north central plains. Only about 3 per- cent of the population lives in the southeastern region, an area almost half the size of the country as a whole. ROLE OF AIR TRANSPORTATION Civil aviation has developed because mountain ranges, swamp- land, and widely dispersed centers of population have hindered the development of surface transportation. Air services con- 63 tribute to the overall transportation system by providing more rapid movement of passengers and cargo where surface services already exist, by serving areas where surface transportation is inadequate, and by linking centers of population and industry with isolated regions. Air cargo service is less important than air passenger service. Ocean shipping lines carry the bulk of Vene- zuela's foreign trade. Air cargo, though accounting for only a small part of total foreign trade tonnage, is highly important in transporting certain categories of exports and imports, such as perishables, and those items requiring special handling and speed of service. The Government promotes civil aviation. It improves air- port and air traffic control facilities, develops domestic and international passenger and cargo services, concludes bilateral aviation agreements, participates in international civil aviation organizations, and applies international standards on air opera- tions. It has ratified the International Civil Aviation Convention and its amendments and the Warsaw Convention of 1929, and it has concluded bilateral agreements with the United States, France, the Netherlands, and Portugal. The Ministry of Communications promotes and regulates civil aviation through the Bureau of Civil Aeronautics (Direction de Aeronautica Civil), The Bureau has 3 operating divisions: Na- tional Airways, Airports, and Air Safety. The Division of Na- tional Airways carries out air traffic control procedures ac- cording to Venezuela's international air agreements. It also supervises the National Technical School of Air Control, which trains control tower operators. The Division of Airports studies the need for new airports and approach zones, plans complete airport installations, and operates all civil public airports. The Division of Air Safety examines and approves pilots and me- chanics, issues air worthiness certificates and aircraft registra- tions, plans search and rescue operations, and controls airport firefighting services. Also reporting directly to the Bureau's Director is the Aeronautical Law Adviser, who handles all civil aviation legal matters affecting the Government. The Bureau subsidizes the Civil Aviation School, "Miguel Rodriguez", and the various air clubs located at important commercial and mu- nicipal airports. An interministerial committee, the National Technical Council of Aeronautics, studies the problems of international air trans- portation and screens all civil aviation matters which will be brought before the Bureau of Civil Aeronautics. The Transport Division of the Ministry of Foreign Relations consults with the Bureau of Civil Aeronautics and other Government agencies and negotiates all bilateral civil aviation agreements. Also in this Ministry is the Bureau of International Organizations, which links the International Civil Aviation Organization with the Ven- ezuelan Bureau of Civil Aeronautics and the National Technical Council. 64 AIRCRAFT IN USE More than 420 civil aircraft were registered in Venezuela in March 1961, of which about 400 were U.S. made. The com- merical scheduled and nonscheduled airlines operated about 170 of these aircraft; the balance was used in general aviation activities. Douglas, Piper, Cessna, and Beechcraft planes were the most numerous U.S. makes. The largest aircraft were Vickers Viscounts, Lockheed Super Constellations, and Douglas DC-6B's, and the newest aircraft were Fairchild F-27 turbo- props. Included in the total were 26 helicopters. COMMERCIAL AIRLINES Service Linea Aeropostal Venezolana (LAV) is a Government-owned and -operated airline offering an extensive network of domestic scheduled flights, most of them beginning in Caracas. More than 40 aircraft are registered in its fleet. Another national air carrier is Aerovias Venezolanas, S.A. (AVENSA), a privately owned line, 30 percent of which is owned by Pan American World Airways (PAA). Its scheduled domestic operations are extensive. It owns about 30 aircraft. In addition to domestic services, these companies have operated regional and interna- tional routes. In January 1961 LAV and AVENSA merged their international operations, forming a new company, Venezolana Internacional de Aviacion, S.A. (VIASA), which will also operate on any future international routes. VIASA has an option to buy the PAA interest in AVENSA. Both parent companies continue separate domestic operations, and AVENSA manages the new carrier. The scheduled airlines also offer domestic and inter- national air cargo and charter flights. Regularly scheduled cargo service is off ered by privately owned Rutas Aereas Nacionales, S.A. (RANSA), which operates 24 air- craft. RANSA is Venezuela's most important carrier of both domestic and international air cargo, especially between Miami and Caracas. It has been operating since November 1960 under the direction and supervision of a Government- appointed legal trustee. Linea Expresa Bolivar, C.A. (LEBCA), a U.S. -owned all-cargo nonscheduled line, has its home office in Miami. Its Venezuelan flights begin in Maracaibo. Using 9 aircraft, it primarily offers flights to Miami and chartered international sevices, but it also offers domestic charter services. Nine privately owned nonscheduled airlines operate charter and air taxi services carrying passengers and small cargo. Salta, C.A., based at Maiquetia airport and serving Caracas, is the local distributor for Cessna. It operates an overhaul service for small aircraft engines and uses about 7 aircraft. Maiquetia is also 65 the base for Aerotecnica, S.A. (ATSA), which is licensed to fly throughout the country. ATSA provides charter services, fre- quently for the Government. It owns and operates 13 helicopters and 1 utility aircraft. Aeroactividades Venezolanas, S.A. (Aero- ven), at Ciudad Bolivar, Bolivar State, offers charter services in the southeastern part of the country, using 13 aircraft. The cen- tral part of the country is served by 2 small regional air taxi airlines operating from San Fernando de Apure in Apure State: Ransa, a directly owned and controlled subsidiary of the already described cargo airline of the same name, and Aerovias Compania Anonima, S.A. (ACASA), which owns 9 aircraft. Taxis Aereos Nacionales, C.A. (TANCA), formed in 1957, offers air taxi and nonscheduled cargo services and aerial photography work. Lo- cated in Ciudad Bolivar, it serves southeastern Venezuela with 9 aircraft. Heliven, C.A., operates from Maracaibo in north- western Venezuela, and serves mostly the large U.S. petroleum companies, using 5 helicopters. Aeroservicios Bolivarianos, C.A. (AEROBOL), was organized in 1957 to engage in explora- tion and inspection of certain mineral- and oil-bearing zones. It is located at Maiquetia and operates 5 helicopters. Helicargo, also organized in 1957, offers general charter services in the west central area of the country, using 2 helicopters. Scheduled passenger services into Venezuela are offered by the following foreign air carriers: Air France, Alitalia, Avianca (Colombia), Delta Air Lines, Iberia (Spain), Royal Dutch Airlines (KLM), Pan American World Airways, Inc. (PAA), and Real Aerovias (Brazil). PAA and KLM are reported to carry most air cargo imports. The Government has a very active program for the development of airports and air navigation aids. The major international airports have already been expanded to ac- commodate anticipated heavy jet traffic. Airport control equip- ment and radio- teletype circuits are being installed according to the air traffic control plan for the main domestic routes. Disposal and Reequipment Programs In 1961, 1 Convair 880 was delivered to VIASA for its interna- tional service. VIASA will probably lease 1 or 2 more jets when it operations expand. VIASA and several foreign flag airlines now serving Venezuela with jet equipment are negotiating for pooling arrangements. LAV's 6 Constellations, which made up its overseas fleet, are not being used by VIASA and will probably be disposed of. No purchases of piston aircraft are expected. The last of 6 Fairchild F-27's on order were delivered early in 1961. In 1960 RANSA was interested in acquiring about 3 four- engine cargo aircraft to meet the demands of its expanding international operations. A DC-6 converted to cargo use was acquired late in 1960. Except for several De Havilland aircraft and LAV's Viscounts, practically all aircraft in Venezuela are U.S. made. The major 66 factors limiting the acquisition of additional aircraft by domestic commercial airlines are the availability of foreign exchange and financing terms. GENERAL AVIATION Almost 260 aircraft were used in general aviation activities at the end of January 1960. Thirteen aircraft were for official use, 30 for instructional flying by the 12 aero clubs, 21 for business and executive use by 13 firms, 25 for the Government- supported flying school, "Miguel Rodriguez", 36 for aerial dusting and spraying, 3 for aerial surveying and photography, and 127 for private use. In July 1959 about 50 planes were used by the Vene- zuelan Air Force for military transportation. Executive planes are owned and operated by U.S. oil, iron min- ing, and construction companies and by certain domestic firms. Executive flying could expand considerably if large manufactur- ing facilities in the middle western areas of Venezuela continue to develop and if production of oil and mining in the more remote areas increase. Private flying is limited because of the rough terrain around many of the population centers and the expense of flight training. The Government subsidizes various flying clubs through the country. Many clubs do not operate up-to-date equipment, and many of their registered aircraft are probably out of commission. Agricultural services, although well established, are limited because of high cost. In addition to charter air carrier services, many companies operate noncarrier services, including fire control patrols, under Government contract. One company is operating a pipeline patrol. The demand is increasing for helicopters in aerial photography and advertising, Government traffic studies, shuttle services to outlying petroleum and mining facilities, and crop dusting. MARKET POTENTIAL There is no immediate market for surplus piston-powered aircraft. When airports are expanded to accommodate larger aircraft and when the demand increases for domestic services, a need for larger two- engine and some four- engine equipment may develop. However, piston aircraft of these types are avail- able in the country to meet anticipated demands. The interna- tional airline will use jet aircraft as soon as possible, and the scheduled domestic airlines will probably replace piston planes with turpoprops if demand increases. The market outlook for aircraft and equipment depends on im- provement in the country's economy. Venezuela has been having financial difficulties, partly because of lower world petroleum prices. The Government, in addition to expanding its require- ment for prior import licensing of essential commodities, has instituted exchange control measures, curtailing the possibility 67 of trade expansion. Nevertheless, imports of aircraft and spare parts are included on the Venezuelan "List of Importations on the Controlled Market." These imports are given the most favorable rate of exchange of 3.35 bolivares per dollar. They are subject, however, to a prior import permit issued by the Venezuelan Central Bank. Venezuelan Civil Air Fleet— 425 Commercial airlines , total 169 Scheduled 93 Linea Aeropostal Venezolana (LAV) Lockheed Super Constellation 1049-G 6 Vickers Viscount 749 3 Martin 202 2 Douglas DC-3C 25 Douglas C-47 3 Curtiss C-46A 4 Aerovias Venezolanas, S.A. (AVENSA) Convair 340 5 Douglas DC-3A 4 Douglas DC-3C 5 Curtiss C-46A 2 Curtiss C-46F 1 Douglas DC-6B 2 Convair 440 2 Fairchild F-27 5 Rutas Aereas Nacionales, S.A. (RANSA) Beechcraf t E-50 1 Curtiss C-46A 10 Curtiss C-46D 3 Curtiss C-46R5 1 Cessna 180 2 Cessna 180A 1 Douglas DC-6A 1 Cessna 180B 2 De Havilland (Canada) Beaver DHC-2 3 Nonscheduled 76 Linea Expresa Bolivar, C.A. (LEBCA) Curtiss C-46A 6 Douglas C-54B 1 Cessna 180 1 Howard DGA-15-P 1 Douglas C-47 2 Salta, C.A. Cessna 180 1 Cessna 175 1 Cessna 190 2 Cessna 180B 2 Beechcraf t F-2-B 1 Venezuelan Civil Air Fleet— 425— Con, Commercial airlines — Con. Nonscheduled — Con. Aerotecnica, S.A. (ATSA) Bell 47 (helicopter) 13 Cessna 190 1 Aeroactividades Venezolanas, S.A. (AEROVEN) Cessna 180 5 Helio Courier H-391-B 8 Sociedad Anonima Nacional Transporte Aereo (SANTA) Cessna 180 3 Aerovias Compania Anonima, S.A. (ACASA) Cessna 180, 182 7 Beechcraf t 35 Bonanza 1 De Havilland (Canada) Beaver DHC-2 1 Taxis Aereos Nacionales, C.A. (TANCA) Lockheed 10A 1 Lockheed 12A 1 Cessna 170B 2 Cessna 180 3 Cessna 195 1 De Havilland Dove DH-104 1 Heliven, C.A. Bell 47-G (helicopter) 5 Aeroservicios Bolivarianos , C.A. (AEROBOL) Hiller UH-12C (helicopter) 5 Helicargo, C.A. Bell 47-G (helicopter) 2 General aviation, total 256 Aerial surveys 3 Topografia, Ingenieria Aerof otogrametria Venezolana, C.A. Beechcraft E-18S 1 Consorcio Nacional Aeromapas Seravenca , S.A. Lockheed 10E 1 Douglas B-26C 1 Agriculture , 36 Industria Aeroagricola, C.A. (IACA) Piper PA-18A-15 9 Beechcraft K-35 2 Beechcraft D-18S 1 Cessna 180 2 Cessna 170B 1 Servicio Agropecuario Aereo, C.A. (SAACA) Stearman PT-17 8 69 Venezuelan Civil Air Fleet—425—Con. General aviation--Con. Agriculture- -Con. Agropecuaria y Aerosper jadora-Nacional , S.A. (AYANSA) Piper PA-18A 10 Boeing/Stearman A-75-N1 1 Fumigaciones Aereas, S.A. Piper PA-18A 1 Stearman PT-17 1 Business 22 De Havilland Dove DH-104 3 De Havilland Heron DH-114 1 Douglas DC-3C 5 Aero Commander 680 Super 1 Cessna 180 1 Grumman G-21-A Goose 1 Bell 47-G (helicopter) 1 Piper PA- 25 1 Beechcraft D-18S 2 Piper PA-18A 2 Piper Apache PA- 23 1 Beechcraft D-50A 2 Aero Commander 560 1 Flight school 25 Escuela de Aviacion Civil "Miguel Rodriguez" Aeronca 7EC 10 Vultee BT-13A 5 Fairchild PT-19A 1 Beechcraft 95 2 Beechcraft Mentor B-45 7 Flying clubs 30 Piper PA-18 15 Aeronca 7EC 1 Cessna 150 2 Piper J-3 2 Piper PA-14 1 Cessna 180 1 Cessna 140 3 Aeronca L-3-B 1 Aeronca L-4-H 1 Cessna 172 3 Government , nonmilitary 13 Ministerio de Communicaciones Douglas C-47A 1 Cessna 310 1 Douglas DC-3C 1 70 Venezuelan Civil Air Fleet— 425— Con. General aviation — Con. Government, nonmilitary — Con. Instituto Agrario Nacional Beechcraf t D-50 1 Banco Agricola y Pecuario De Havilland Dove DH-104 1 Instituto Venezolano de Petroquimica Helio Courier H-391-B 1 Beechcraf t E-18S 1 Ministerio de Obras Publicas Aero Commander 680-E 1 Piper Apache PA-23 1 Corporacion Venezolana de Fomento Piper PA-18 1 Ministerio de Agricultura y Cria De Havilland Dove 104 1 Gobierno del Estado Apure Cessna 180-B 1 Instituto Venezolano del Hierro y del Acero Aero Commander 680 1 Private and charter use 127 Beechcraf t 95 5 Vultee BT-13A 3 Beechcraf t 35 Bonanza 15 Cessna 140 4 Cessna 170 7 Cessna 182 9 Piper PA-22 8 Cessna 172 4 Luscombe Silvaire 8F 2 North American SNJ-5-B 1 Fairchild PT-19A 1 Cessna 150 1 Champion 7-EC 1 Luscombe Silvaire 8A 1 Piper J-3C-65 1 Stinson 108 4 Swift GC-1B 3 Ryan Navion NAV-4 4 Piper PA- 12 2 Ercoupe 415-C 2 Bellanca Series 14 2 Cessna 180 2 Ryan Navion A 3 Piper PA-20 4 Aero Commander 560 1 Stinson L-5C Sentinel 1 Auster J. 5 .4 . Series F 1 71 Venezuelan Civil Air Fleet— 425— Con, General aviation — Con. Private and charter use — Con. Taylorcraft BC-12-D 1 Piper PA-18 3 De Havilland Dove DH-104 1 Cessna 190 1 Beechcraft 50 Twin Bonanza 4 Piper Apache PA-23 5 Piper PA-16 1 Cessna 182 1 Douglas DC-3C 1 Helio Courier H-391 3 Cessna 310 5 Camair 480 3 Cessna 175 4 Cessna 210 1 Lockheed 12A 1 72 cd m o no m t> CM 00 00 o to CM CM CD 00 in CD • CO • CM t> t> 00 CD O CO o O CD 00 O rH CO CM CM CM CO rH CM t-I O CO m t>- O rH rH rH H rH rH • CM • CO rH rH I> o CM 11,714 5,101 3,895 CO CD H CM CM rH rH d m 00 CM t^. 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