Southern Air Transport (SAT), based in Miami, Florida, United States, was, in its final incarnation, a cargo airline. However, it started life as an irregular air carrier (later known as a supplemental air carrier), a type of carrier defined and tightly controlled until 1978 by the Civil Aeronautics Board (CAB), a now defunct Federal agency that, at the time, closely regulated almost all US commercial air transportation. From 1960 to 1973, the small carrier was secretly owned by the Central Intelligence Agency (CIA), which used it to support its activities primarily in Southeast Asia connected with the Vietnam war, though SAT continued to function in other regards as a normal charter airline. During this period, SAT was part of a complex of CIA-owned carriers, including Air America and Intermountain Aviation. Having no further use of the carrier, the CIA decided to sell it in the early 1970s, but its ownership leaked in what became a storm of controversy.
The carrier was also known for its role in the Iran-Contra scandal of the mid-1980s, during which SAT transported arms to Iran and to the US-backed anti-communist right-wing rebels in Central America known as the Contras, which were fighting the revolutionary Sandinista government in Nicaragua.
In the mid-1990s, SAT ranked as the 10th largest all-cargo airline in the world by ton-miles carried.
After SAT ceased operation in 1998, many of its assets were used to start another airline, the similarly named Southern Air.
History Early days Southern Air Transport (SAT) was initially a sole proprietorship of F.C. "Doc" Moor, a pilot who had flown for a number of airlines, including Pan Am. The initial period of activity lasted from February 1947 to January 1949, when Moor suspended operations to work for the Venezuelan carrier RANSA. Southern Air Transport was incorporated in Florida on 31 October 1949, Moor being president. SAT flew mostly cargo, but also some passenger traffic. SAT was an irregular air carrier, a type of airline later known as a supplemental air carrier. In 1953, 37% of SAT's revenue was military and it had two C-46 aircraft, producing a break-even financial result.
CIA era
The CIA purchased the airline on 5 August 1960, for $260,000 to Doc Moor and $40,000 to Stanley G. Williams. The CIA purchased SAT after consulting the CAB, driven by a desire to have access to heavy-lift non-governmental aircraft for CIA operational purposes without incurring significant ongoing expense. During the time the CIA owned the carrier, the CAB knew as did appropriate Congressional committees. The CIA provided the carrier with funding, allowing it to acquire larger aircraft and expand.CIA Sale of Airline A Bargain, Miami Herald, 10 March 1975 In the three years 1957–1959, annual revenue averaged $400,000, with the military accounting for zero revenue 1957 and 1958 and less than 25% of revenue in 1959. By contrast, in the first three full years of CIA ownership, 1961–1963, revenue averaged almost $5 million per year, with the military accounting for over 80% in each of those years and profitability much improved. The CIA apparently also influenced a CAB award to provide the carrier with authority to fly civilian charters to Asia to support the Vietnam war. In July 1962, Stanley G. Williams, previously treasurer, became president, with Moor becoming chairman. The airline had four Douglas DC-6s, three C-46s and a C-45. Until his death in 1972, Doc Moor devoted much of his time to hydroplane racing, becoming national champion many times in his displacement class, sometimes delivering his boats to races using the airline.Frederick C. Moor Dies in Hialeah at 61, Tallahassee Democrat, 27 September 1972
SAT was part of group of CIA "proprietary" carriers and related businesses, including Air America, Air Asia, Civil Air Transport and Intermountain Aviation, under the Pacific Corporation parent company run by George A. Doole Jr.. The airline held itself out to the public as just another charter carrier. A 1965 advertisement in The Miami News used the tag line "You can't measure Southern Air's service" and noted its capabilities in shipping livestock, household goods and cars. However, SAT's logo was an eight-point compassSouthern Air Transport advertisement, Miami News, 11 June 1965 — the CIA has a 16-point compass on its seal. Other connections were more obvious. The 1968 CAB annual report to Congress showed Air America as the holder of SAT's debt, and by that time, Air America was widely believed to be controlled by the CIA. As a nearby photo indicates, SAT flew a 727 for which Air America was the registered owner. In 1966, SAT ordered a Boeing 727 (specifically for use on its military transport contract in Asia)Line Buys Boeing 727, Tacoma (WA) News Tribune, 1 February 1966 and in 1968, Lockheed L-100s,Lockheed Freighters Ordered, Los Angeles Evening Citizen News, 10 October 1968 the civilian version of the C-130 Hercules military cargo aircraft. In 1970 the CAB gave the airline authority to use the L-100s for outsized cargo worldwide.
Although SAT was substantially bigger than before it was bought by the CIA, it remained small by contrast to the industry, whatever the size of the overall CIA proprietary aviation business. In 1969, SAT revenues were $11 million, whereas all US supplemental air carriers together were $361 million, against US scheduled carrier revenues of $8.8 billion. In 1969 the Atlantic fleet was six aircraft, operating out of Miami, San Juan and the Bahamas; the Pacific fleet was four aircraft, operating passenger and cargo flights for the militarySouthern Transport Spans Two Seas With Service, Miami Herald, 9 May 1969 out of Yokota, Japan and Tainan, Taiwan. The two regions were semi-autonomous, the Pacific being CIA-centric, the Atlantic operating more-or-less conventionally, though occasionally also assisted. In January 1970, SAT was one of a consortium of airlines carrying relief to Biafra with L-100s.Miami-Based Crewmen Helping With Airlift Miami Herald, 23 January 1970 The L-100s ranged widely, one trip in 1971 traveling over 100,000 miles in 310 flight hours using five separate crews to Europe, Greenland, the Solomon Islands, Australia and within the United States before returning to Miami.Chamber Thanks Eastern for Corporate Shift, Miami Herald, 14 October 1971
Transition from CIA In September 1971, a former CIA officer went public about Air America, accusing SAT of being a CIA front that existed for the purpose of providing the CIA with a way to send personnel and munitions to fight a Latin American clandestine war.A Private Global Army, Miami Herald, 20 September 1971 Moor and Williams denied it. At the time the Asian fleet was two 727s and the Atlantic fleet was two DC-6s and three L-100s.Airline For CIA? 'Not Us' , Miami Herald, 3 October 1971
In April 1972, the CIA decided it had no further need of SAT. It shut down Pacific operations pending a decision on what to do with the company. The CIA consulted with the CAB: sale to another airline required undesirable lengthy public hearings. The CAB preferred SAT not be liquidated so as to retain a potentially useful airline. Sale to management seemed like a quiet alternative. A sale was agreed in February 1973, but anticipated quick CAB approval was derailed by fierce opposition from competitors complaining of past and current competition from a government-owned airline, which reached a crescendo when the still CIA-owned SAT was awarded a contract to fly for an Air Force domestic cargo network known as Logair. A "congressional source" said SAT got greedy. Had it not sought the Air Force contract the sale might have happened.CIA May Liquidate Its Controversial Airline Washington Post via Sarasota (FL) Herald-Tribune, 9 September That the CIA owned SAT was no longer a secret and received wide coverage. Reports came out of past SAT missions to global hotspots in Africa and the Caribbean. The CIA decided to kill SAT, but as an alternative, management agreed to turn in the carrier's certification (making the SAT a so-called uncertificated carrier, no longer a common carrier), which meant foregoing the Air Force contract, but also removed SAT from CAB jurisdiction. The airline was sold to Williams on 31 December 1973 for less than book equity, but, as it was no longer a common carrier, its ability to generate revenue was more limited.
Post-CIA In 1974 and 1975, the largest customer for SAT was Texaco, in 1976 it was the Air Force of Iran and SAT's net income in those years was $418,000, $844,000 and a loss of $303,000. On each of 1 January 1975 and 25 October 1975, Willams sold James H. Bastian a 20% stake in SAT. In 1977, as a result of new legislation requiring any carrier working for the Department of Defense to be certificated, Southern Air Transport applied for, and received, domestic "property" (i.e. cargo) supplemental certification, during which the airline represented that the CIA had no further involvement with the carrier. The CAB noted that certificating SAT would break the monopoly that Trans International Airlines had in the U.S. in terms of certificated carriers with the L-100 Hercules.
SAT was sold again in 1979, this time to James H. Bastian – described by the Los Angeles Times in 1986 as "a top-notch Washington, D.C., aviation attorney who had worked with Doole at the Pacific Corp. from 1961 to 1974, as secretary, vice president and general counsel."Barry Bearak, Los Angeles Times, 26 December 1986, Intrigue Trails Airline Linked to Iran, Contras Under Bastian the company expanded its revenues (from $9.8m in 1982 to $38.m in 1985) and had over 500 employees in 1986.
Iran–Contra affair As part of Oliver North's activities to trade arms for hostages with Iran and to support the contra rebellion in Nicaragua, Southern Air carried four loads of US weapons bound for Iran from the US to Israel, and on the return flights carried weapons destined for the US-backed right-wing Contra rebels in Nicaragua from Portugal. On 5 October 1986, a C-123K, loaded with weapons, failed to return from a scheduled drop to the Contras in Nicaragua. In charge of the operation was Felix Rodriguez. He was the logistics officer for airlifts of weapons and supplies from the Ilopango air base, in El Salvador, to the jungle hide-outs of the Contras. Rodriguez did not notify the Defense Department or the CIA but rather attempted to get word about the missing C-123K to Donald Gregg, the National Security Advisor for Vice President George H. W. Bush. The shooting down of a flight helped expose the Iran-Contra scandal. Logbooks retrieved from the wreckage linked SAT to a history of involvement with the CIA]. The logs documented several SAT flights to Barranquilla, during October 1985.
In the same time period Wanda Palacios told the FBI that SAT was running drugs. She worked in the early 1980s for Colombia's Medellin Cartel and had direct knowledge of the cartel's dealings with the CIA and the Contras. She brought her testimony to US Senator John Kerry. Wanda Palacios had witnessed in 1983–1985 in Barranquilla, the arrival of SAT planes loaded with weapons for the cartel, which would then send them to the Contras. The planes would return to the US loaded with cocaine. Palacio stated that Jorge Luis Ochoa Vásquez himself explained to her the guns-for-drugs deal with the CIA to supply the Contras. Ms. Palacios' story was subsequently established to be false. Southern Air Transport v. Post-Newsweek, 568 So. 2d 927 (Fla. 3d DC 1990).George Lardner: EX-CIA AIRLINE TIED TO COCAINE, The Washington Post, 20 January 1987
While Iran Contra was in operation Southern Air Transport had obtained a hangar at Dover Air Force Base, a United States Air Force base located southeast of the city of Dover, Delaware.
1990 Snapshot