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1000 v. Civil Aeronautics Board

decided: November 14, 1973.

VOYAGER 1000, PETITIONER,
v.
CIVIL AERONAUTICS BOARD, RESPONDENT



On Petition for Review of an Order of the Civil Aeronautics Board.

Pell and Sprecher, Circuit Judges, and Campbell, Senior District Judge.*fn* Pell, Circuit Judge (concurring).

Author: Sprecher

SPRECHER, Circuit Judge.

Petitioner, Voyager 1000, seeks review of Order 73-3-1 issued by the Civil Aeronautics Board on March 1, 1973, directing petitioner to cease and desist from engaging in "air transportation" in violation of Section 401(a) of the Federal Aviation Act.*fn1 Section 401(a) of the Act states that "no air carrier shall engage in any air transportation unless there is in force a certificate [of public convenience and necessity] issued by the Board authorizing such air carrier to engage in such transportation." 49 U.S.C.A. ยง 1371(a) (emphasis added). The issue presented on appeal is whether the Board's determination that Voyager was operating as an air carrier engaged in air transportation is supported by substantial evidence*fn2 and a reasonable basis in law. Las Vegas Hacienda, Inc. v. C.A.B., 298 F.2d 430, 433-34 (9th Cir. 1962). We affirm the Board's order.

I

In September, 1964, Voyager was founded as an Indiana non-profit corporation.*fn3 The founding members' plan was to organize a private flying club which would acquire an aircraft for recreational travel for a membership limited to 1000. Each member was required to pay an initiation fee of $125 ($200 per family membership) and monthly dues of $4, although in some instances these amounts were waived or reduced. The membership having reached 1,000 within a year, a second club, Voyager 2000, was formed and subsequently merged into Voyager 1000.

In early 1968 when the membership stood at 2,460, the club's cash resources were seriously depleted. The directors decided that a substantially larger dues paying membership was necessary to provide sufficient operating funds to keep the club on a healthy financial footing. The initial goal was set at 5,000 members; in September, 1970, the goal was increased to 20,000.

Membership drive activities included the following:

(a) Familiarization with Voyager programs and facilities was proffered by means of open houses held in early 1968 in Indianapolis, Fort Wayne, Evansville, and Terre Haute, Indiana, and Columbus, Ohio. Newspapers in Indianapolis, Louisville and Cincinnati carried advertisements. When a Boeing jet was acquired, open houses to inspect this craft and "hear the Voyager 1000 story" were also held; these too were widely publicized. From June to September 1970, published announcements included lists of upcoming Voyager flights, stressed that the only initial outlay would be the advance payment of six months due ($36) because the initiation fee was being waived, and stated that application forms would be available at the open house.

(b) Articles describing Voyager activities were prepared for publication in newspapers and magazines such as Time and Travel Weekly. During the last three months of 1970, from three to six commercials per week were broadcast over a Cincinnati radio station. In the spring of 1971, a full page advertisement was placed in Holiday Magazine.

(c) Existing Voyager members were offered the inducement of $10 in scrip redeemable in Voyager services for each "bonus membership" they procured.*fn4

(d) Brochures describing flight programs in detail--dates, flight numbers, departure times, and fares--were mailed to non-members appearing on purchased commercial mailing-house lists and on large organization membership lists such as the Indiana State Teachers Association. For example, in the spring of 1972 Voyager had 100,000 copies of the "Europe '72 Program" brochure printed, more than seven times the then current membership.

(e) In early 1971, college students at Purdue University, Ball State Teachers College and Marion College were offered a one-year membership for $10. Free flights were offered to the individuals enrolling students.

(f) As part of the membership drive, the initiation fee and monthly dues were the subject of some variation, being waived or reduced in connection with particular programs. At the time of this proceeding, the cost of joining was $10 per membership and $7 per month.

(g) Throughout the period of the membership drive, advertisements appeared regularly in eight newspapers in Indiana, Ohio, and Kentucky with a combined circulation in excess of one million copies. These advertisements contained a selected listing of flights available to "Voyager Members Only" detailing dates and price per person. They also invited inquiry about membership, giving a phone number or containing a mail-in coupon. Many advertisements included the cost of membership.

This total effort resulted in approximately 12,100 new memberships, from 2,400 members in 1968 to 14,500 members in December, 1971. Since most memberships are owned by families, this represents an estimated 43,000 individuals eligible for Voyager flights.

As a result of increased membership, Voyager employs over 80 individuals, operates seven aircraft (a Boeing 720 jet, two Lockheed Electras, two DC-7's and two Martin 404's), and maintains its own terminal at Weir Cook International Airport in Indianapolis.

Voyager's flight program is extensive. Flights are announced from five to six months in advance and by flight time are generally filled to capacity.*fn5 Although the Voyager program tends to concentrate on weekend trips and destinations which are novel, longer trips and more customary destinations are also available. Voyager operated 200 flights from March, 1970 to May, 1971 and 156 flights between July, 1971 and April, 1972.

Although concededly secondary to travel, there is also a social aspect to the club. Voyager conducts a series of parties planned around travel themes. Announcements are sent to members sometimes in combination with flight schedules; they include a reservation form and often encourage members to bring guests.

Participation in Voyager flights, parties and corporate elections*fn6 is limited to members whose dues are paid up. Immediately upon payment of the fee necessary to become a member, an individual is eligible for all Voyager activities and could conceivably take a ...


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