62 STAT.] CHILE-AIR TRANSPORT SERVICES-MAY 10, 1947 The American Ambassador to the Chilean Ministerfor ForeignAffairs 3769 AMERICAN EMBASSY Santiago, May 10, 1947 EXCELLENCY: I have the honor to present herewith a statement of the understand- ing upon which the government of the United States proposes to ex- ecute the Air Transport Agreement entered into with the government of Chile. 1. A unique situation exists concerning the Panama Canal Zone by reason of the relationship between the United States of America and the Panama Canal Zone arising out of certain treaties between the Republic of Panama and the United States of America. Pan American Grace Airways at present operates certain air services which originate in the Canal Zone. It is contemplated that, should an airport suit- able for international airline operations be completed in the Republic of Panama, Pan American Grace Airways might transfer its base of operations to such an airport in the Republic of Panama, provided, of course, that the Republic of Panama should accede thereto. It is understood that such an operation by that air carrier of the United States of America which would originate its services in the Republic of Panama would exist because of the unique situation concerning the Canal Zone referred to above; and, because of the highly unusual situation involved therein, the Government of the Republic of Chile would consider that that designated airline of the United States of America might originate its operations at such time and under such circumstances from a point in the Republic of Panama. The Government of Chile understands that, since Pan American Grace Airways Inc. is 50 percent owned by, and is therefore a part of, the Pan American World Airways system and, furthermore, has been operating under the terms of a contract between the company and the Government of Chile between the Canal Zone and Chile for the past eighteen years, the United States' routes authorized in Annex "B" are expected to be operated as a through airline operation between the United States and Chile. The Government of Chile, therefore, does not regard the fact that Pan American Grace Airways Inc. may be technically originating its services from an airport in the Republic of Panama as establishing a precedent since, as indicated above, by reason of Pan American Grace Airways' close affiliation with the Pan American Airways system and the fact that Pan American Grace Air- ways Inc. has been operating its present routes for many years with a close connection in the Canal Zone with the Pan American World Airways system, the bulk of the originating traffic on these routes will continue, as in the past, to originate in the United States. Until such time as an airport in the Republic of Panama suitable for international air transport operations is completed, airlines des- ignated by the Republic of Chile may serve the Republic of Panama from Allbrook Field in the Canal Zone, subject to the military require- ments referred to in Article 2 of this Agreement. Pan American Grae Airways Inc. Ante, p. 3761. Use of Allbroot Field. Canal Zone. Ante, p. 376 No. 115
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