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This question focuses on how the government shifted air mail responsibility in the 1920s. The Air Mail Act of 1925 opened the door for the Post Office Department to hand over air mail routes to private carriers. In other words, the government would contract out the operation of air mail services to private operators—commercial firms and airlines—rather than running the service directly within the Post Office or using other government bodies. This leveraged private capital and expertise to expand service more quickly while the government retained oversight and payment under contract.

So, the best answer is that air mail service was transferred to private operators. This did not involve moving the work to other federal agencies or to foreign operators. It also encompasses what we think of as airlines, since private carriers operating under contract are the private operators referenced by the act.