The history of non-scheduled airlines in the United States records the rise and fall of a uniquely unencumbered sector of the heavily regulated American airline industry from the end of World War II to the Airline Deregulation Act of 1978. Frequently operating in the shadow of colossal national airlines, which received federal subsidies and flew scheduled passenger service at costly rates, non-scheduled airlines were generally small companies which could be chartered to transport goods or passengers at an hourly or distance-based charge. Non-scheduled airlines were the first to introduce 'aircoach' fares for civilian air travel in the late 1940s, and brought about the low-rate service offered by almost all airlines operating today.

Non-scheduled airlines first appeared in significant numbers in the United States after the Second World War, as returning pilots purchased discount surplus planes from the government and set up their own uncertificated air services under the non-scheduled charter service exemption in the 1938 Civil Aviation Act. Low overhead and fewer regulations allowed the non-scheduled airlines to offer considerably lower fares than the national scheduled carriers, inaugurating the immensely popular aircoach service which attracted millions of Americans unable to afford tickets on the regular airlines. Though the regulatory actions of the Civil Aeronautics Board ultimately extinguished the burgeoning non-scheduled industry, the idea of cheap, efficient air transport endured and by the passage of the 1978 Airline Deregulation Act nearly all civil airlines had transitioned to an aircoach model.

Origins

The first non-scheduled airlines arose from the industrial and human fallout of the Second World War. The wartime United States aviation industry had, upon the orders of President Franklin Delano Roosevelt, escalated the production of aircraft from a few thousand a year to more than 4,000 each month, and the training centers of the U.S. Army Air Force produced the pilots to fly them.Franklin D. Roosevelt: "Campaign Address at Boston, Massachusetts", October 30, 1940. Online by Gerhard Peters and John T. Woolley,The American Presidency Project Peace brought these airmen, who often possessed no other skills, back to a country where immense stores of surplus military aircraft were being sold at discount rates to former servicemen. Under the 1938 legislation of the Civil Aviation Authority, the federal agency responsible for regulating civil aviation until 1940, all air carriers providing scheduled air service across states required an official certificate to operate, the Certificate of Public Convenience and Necessity. The certificate demanded compliance with economic as well as safety standards, which meant all certificated companies were subject to the CAA's stringent control over fares, routes, and business practices. Nonscheduled air service, which then referred to light aircraft individually chartered to transport cargo, was exempt.Davies and Quastler 1995 p. 23.

Snapping up $25,000 Douglas DC-3s, the legendary utility plane which operated in numbers exceeding 10,000 during the war, enterprising pilots established their own freight carriers with ease under the 1938 exemption.Solberg 1979 p. 328. A glut of such companies appeared—2,730 in 1946 alone according to the Civil Aeronautics Board (CAB), which replaced the CAA in 1940. They had such names as Fireball Air Express or Viking Air Lines, and commonly were operated by a lone individual with some money given by fellow GIs, or in rare cases a bank loan. For most the romantic venture ended in failure; many former fighter pilots found themselves unsuited to the steady cross-country cruising, the bookkeeping required to stay solvent, and the long-term maintenance. With a safety record 14-25 times worse than their scheduled counterparts, the nonscheduled companies (or 'non-skeds', as they came to be called) faced swift punishment from the CAB, which began widely shutting down operations that were found unsafe or "financially unfit".Corpening 2015 p. 1. CAB retribution was not the most immediate threat to the non-skeds' continued existence, however, and it soon became apparent there were too few contracts to support the influx of new businesses. Hundreds of thinly financed operations went bankrupt within a few months, and ruthless competition for work turned into suicidal rate slashing as non-sked owners undercut air, rail, and naval shipping to prices that failed even to cover their fuel costs. Such cutthroat practices and the poor safety record earned the non-skeds' an ineffaceable reputation as the aviation industry's seedy underbelly.Corpening 2015 p. 5. Savvy non-skeds averted extinction in the late 1940s only by breaching into another market with an innovative service: the aircoach.

Though passenger travel was never intended under the economic regulation exemption enjoyed by nonscheduled airlines, its adoption became essential to their business. Because of their low overhead and few amenities, the non-skeds were able to charge close to 40% less than the traditional airlines, with $99.00 fares from Los Angeles to New York City versus $159.00 on a standard carrier.Davies 1987 p. 88. Moreover, unfettered from timetables non-skeds could delay flights until they were full or nearly full, while scheduled airlines had to charge exorbitant prices to ensure profit on half-empty planes.Solberg 1979 p. 346. The non-skeds found a large and willing market for this new service, frequently advertised as 'aircoach' in reference to the established use of 'coach' to mean respectable middle-class travel on trains and ships.Corpening 2015 p. 6. Americans who had never flown before could now afford the luxury formerly reserved for men of business; non-skeds flourished around population-dense cities with big airports. The west coast experienced a remarkable proliferation of nonscheduled passenger airlines, especially near Los Angeles in places like Burbank or Long Beach where land for a dirt airfield could be cheaply obtained. On the east coast Newark and Trenton in New Jersey were popular hangar bases for non-skeds, and the Miami-Caribbean circuit out of Florida was as trafficked as it was lucrative.Corpening 2015 p. 2. One route, from San Juan to New York, facilitated the mass migration of Puerto Ricans seeking opportunity on the mainland who came in numbers exceeding 6,000 each month and settled in squalid conditions in East Harlem. But while the nonscheduled airlines' fares were unmatched throughout the industry, their service quality was frequently unreliable.

The low-fare model required that flights be relatively full, and it was a common occurrence when flying on a non-scheduled airline for customers to learn at the airport their flight had been delayed until tomorrow so that the airline could sell more tickets. Because most companies had only a few planes and just the staff to crew them, delays as a result of weather or mechanical failure could completely incapacitate the airline, forcing it to cancel or postpone flights for which tickets had already been sold. No refunds were given on such tickets, and on one occasion the Burbank police responded to calls from a nearby airfield where an angry crowd of passengers were demanding access to an overbooked flight. Some of the nocturnal nonscheduled carriers attempted to evade landing fees at their destinations by covertly slipping in and out of airports in the middle of the night.Corpening 2015 p. 9. However, with the founding of the Aircoach Transportation Association, the trade association and lobbying group of the non-scheduled airlines, stricter policies of etiquette, safety, and consumer protection became standard across the industry. By the close of 1946 non-skeds had become a definite presence within the aviation industry, and they found themselves looked unfavorably upon by executives at the old established airlines.

Conflict Major scheduled airlines—the likes of United, American, and TWA—were still receiving federal subsidies and airmail pay when they began lobbying the CAB to protect their interests against the upstart nonscheduled airlines. The CAB, charged originally with promoting competition to the benefit of the consumer, acceded to the airlines' demands and on 5 May 1947 enacted new regulatory measures targeting nonscheduled airlines—now termed 'irregular carriers'. The measures distinguished between Small Irregular Carriers, services operating light chartered aircraft weighing less than 10,000 pounds when fully loaded (changed in 1949 to 12,500), and Large Irregular Carriers, those flying equipment, the DC-3 for example, in excess of that weight. The small remained unrestricted, but the large carriers faced a host of new economic and safety regulations along with a warning to adhere to 'infrequent and irregular' service. The most important of the new rules was the need for a Letter of Registration in order to fly large aircraft; the CAB issued 142 of these in 1947 but stopped in August 1948 when the board began an investigation of the practices of large irregular carriers, which it accused of operating as scheduled services.Corpening 2015. p. 8. Earlier that year the CAB had instituted what became known as the "3 and 8 rule" which limited nonscheduled airlines' monthly flights to eight between any two U.S. cities and three on specified high-density routes.Davies 1987 p. 87. No non-sked could feasibly sustain itself on such a slim diet, and the measure was viewed as a death sentence by leaders of the irregular air industry. Nonetheless, a select group of non-skeds not only persevered but prospered in the ensuing years, though many were far from scrupulous in their observance of the CAB's economic constraints.

One such entrepreneur was the co-founder of Fireball Air Express, Stanley D. Weiss, who early in 1949 formed a ticketing agency called North American Airlines with Ross R. Hart and Jack B. Lewin, the founders of his principal competitor Viking Air Lines. While the individual companies retained their Letters of Registration, and therefore their monthly allowance of flights, North American Airlines sold the tickets, advertised its brand, and arranged their flights. In effect, Weiss created a conglomerate which doubled the number of monthly flights allotted to his company and rebranded the technically disparate components with the North American Airlines logo, such that any passenger would believe they were dealing with a single entity. He then acquired more nonscheduled airlines—Twentieth Century Airlines, Trans-American Airlines, Trans-National Airlines, and Hemisphere Air Transport—to bring North American Airlines' de facto fleet to 14 DC-3s and 1 DC-4, and to ensure the "3 and 8" limit would never again strangle their business.Davies 1987 pp. 87–88. Another non-sked businessman named Irving Herman became Weiss' chief competitor through a similar scheme called Super Skycoach, which comprised Great Lakes Airlines, Currey Air Transport, and Trans Alaskan Airlines held together by the Trans Continental Airlines ticketing agency.Corpening 2015 p. 13. In setting up his evasive business, however, Herman acted with greater caution than Weiss, whose bold maneuver attracted the ire of both scheduled airlines and the CAB.