Airline Expansion and Innovation (1927 - 1941)

A Visionary Reforms the Airline Industry

Postmaster General Walter Brown helped draft legislation to reform the way airlines were paid, streamline the nation's air routes, and encourage airline growth and innovation.

Walter Brown
National Air and Space Museum Archives

The most important architect of the nation's passenger airline industry, Walter Brown believed that the large holding companies created by the wave of airliner mergers could provide the economic clout to develop the industry, boost passenger travel, and reduce government subsidies.
Brown helped draft the McNary-Watres Act of 1930, which changed how airlines were paid and made subsidies more fair, redrew the nation's air route system, and provided economic incentives to encourage airlines to carry passengers.


Reforming the Air Mail System

Walter Brown reformed the air mail system in four ways:

  • By exchanging 4-year air mail contracts for exclusive 10-year route certificates, Brown gave airlines long-term stability while allowing the Post Office to reduce its payment rates each year.
  • By extending the route network while reducing the payment rates, Brown tripled air route mileage at no extra cost to taxpayers.
  • By providing bonuses for technological improvements, Brown encouraged the creation of larger, faster, safer, and more efficient passenger airliners.
  • By basing payments on space available in aircraft, rather than on the weight of mail carried, the Post Office was able to spread its payments more equitably among all air mail carriers.
American Airways Label

To promote passenger travel and to rescue several airlines from bankruptcy, Walter Brown created two more transcontinental air mail routes. Southwest Air Fast Express and Robertson won the southern route. They merged to form American Airways.


Brown's "Spoils Conferences"

Walter Brown met with airline leaders in May 1930 to implement the newly enacted McNary-Watres Act. When consensus could not be reached, he determined routes and airline territories himself.
To ensure the survival of well-run passenger airlines, Brown encouraged them to merge with air mail lines-a move that saved many airlines from extinction during the Depression. He forced other mergers in the interest of efficiency and excluded small, marginal carriers. Critics later labeled these meetings the "Spoils Conferences.

Ford 5-AT-B Tri-motor
Copyright The Boeing Company

To fly the new central air mail route, Transcontinental Air Transport merged with part of Western Air Express to form Transcontinental and Western Air (T.W.A.).

United Airlines Booklet
National Air and Space Museum Archives

American and T.W.A. competed with Boeing Air Transport and National Air Transport, which combined to begin transcontinental service in 1930 and later became known as United Air Lines.