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Aviation History
1928
1928 - 0658.PDF
Returning to the subject of the amount of the subsidies, the total contemplated for the next ten- year period amounts to very nearly two-and-a-half million sterling (£2,490,000). To this amount should, of course, be added the sums which Imperial Air- ways, Limited, have already received. Exactly what these amount to we do not know, but it must be a fairly substantial sum. Sir Samuel Hoare's Note states that " the maxi- mum amount for each year will be allocated in definite proportions to (1) the European services, (2) the England-Egypt section, and (3) the Egypt- India section." But what the definite proportion is the Note does not say. Before one can form any idea of the usefulness which the new agreement is likely to have, it is rather essential to know these proportions. Reading between the lines, one receives the impression that the European services are not to receive a -very large proportion. Curiously enough, just as we had obtained a copy of Sir Samuel Hoare's Note on the subsidies we received from a reader in India, a cutting from the Calcutta newspaper, The Statesman, the leading article in the June 22 number of which criticises the Air Ministry and states there is insufficient liaison between the Air Ministry and India. The article claims that the Air Ministry shows an un- desirable tendency to make and publish its own plans regarding civil aviation, and then expects others to conform to them. Especially does The Statesman complain of the purchase of the Short " Calcutta " flying-boats, which it is assumed are intended for the Calcutta-Rangoon service. " Quite apart from the fact," the paper says, " that Imperial Airways can hardly expect the mail contract, we JULY 19, 1928 understand that the Director of Civil Aviation in India has on the ground of expense decided that a flying-boat service is impracticable, and that the service for which tenders will be called, and which by the way is to have precedence in time over a Karachi-Delhi or Karachi-Calcutta service, will be one of overland aeroplanes. It seems almost gra- tuitously fortunate that Imperial Airways have the Southampton-Jersey route available on which to employ the Short-Calcutta boat." On this point at least the Note throws some light by stating that " provision will be made for payment by Imperial Airways for these boats and a corresponding addition to the subsidy for the first year of operation of the England-Egypt section of the through route." That presumably means that the " Calcuttas " are to be used on some section of an England-Egypt route. As The Statesman quite rightly points out, the transportation of mails from Karachi to Delhi and Calcutta is the affair of the Government of India. In his Memorandum on the Air Estimates, Sir Samuel Hoare foreshadowed a change in the subsidy basis, whereby more encouragement would be given to the adoption of new and more efficient aircraft types. The present Note dismisses this very import- ant point with a brief statement that the new scale provides for the application of an average obsolescence rate of not less than 25 per cent, per annum, which will allow for two complete replacements of types during the currency of the new agreement. That may mean a good deal, or it may mean nothing. We shall require to know a good deal more about the details before we are quite convinced that any serious effort will be made in the future to encourage the production of more efficient aircraft. SUBSIDIES TO CIVIL AIR TRANSPORT SERVICES* Note by Air Minister on New Basis THE new agreement with Imperial Airways, Ltd., will comeinto force on April 1, 1929, in substitution of all existing agree- ments and will extend for a period of 10 years from that date. The services to be provided will cover not only the presentdaily services on certain European routes to a minimum extent of 425,000,000. h.p. miles per annum, but also a weeklyservice each way between England and India, to commence on or about April 1, 1929. It is hoped that eventually thislatter service will be operated twice weekly. The through service to India will terminate at Karachi ;but the Government of India have under consideration proposals for civil air transport services operating fromKarachi eastwards which will connect with it. The maximum subsidies in respect of the services to be provided under thenew agreement will be on the following decreasing scale :— For each of the first two years .. .. 335,000For each of the next four years . . . . 310,000 For the seventh year 220,000 For the eighth year . 170,000For the ninth year 120,000 For the tenth (final) year 70,000The maximum amount for each year will be allocated in definite proportions to (1) the European services ; (2) theEngland-Egypt section ; and (3) the Egypt-India section. In view of the importance of securing continuous progressin the design of machines, and more particularly a steady improvement in the ratio of paying load to running costs, thescale of subsidy above mentioned provides for the application of an average obsolescence rate of not less than 25 per cent,per annum, unless in special circumstances the Secretary of State shall otherwise determine. This will allow for twocomplete replacements of types during the currency of the Agreement, at the expiration of which period it is hoped that,given a reasonable increase in the volume of traffic, a fully- paying type of machine, with consequent low obsolescencerate, will have been evolved and that subsidies from the Exchequer wiil no longer be required. In effect, as the result of experience gained to date under • Cmd. 3143, Price \d. net. the old agreements, the period of 10 years, by the end ofwhich it was originally hoped that commercial air transport would have become self supporting, is extended to 15 years ;and the new agreement accordingly provides for the subsidy in respect of the European services being maintained in 1928at the same rate as in the past four years, and thereafter tapering towards extinction over 10, instead of 5, years. In regard to mails, the surcharges per ounce of mail carriedwill be fixed in agreement with the Postmaster-General, but provision will be made in the agreement for carriage of mailsat such rates as will enable the surcharge, in the first instance at any rate, to approximate to 3d. per ounce between Englandand Egypt, Egypt and Iraq, Iraq and India ; and 6d. per ounce between England and Iraq or India. The conditions in regard to the England-India serviceinclude the handing over to Imperial Airways, Ltd., of the two experimental " Calcutta " flying-boats recently completedunder the Civil Aircraft Experimental programme ; but provision will be made for payment by Imperial Airways forthese boats and a corresponding addition to the subsidy for the first year of operation of the England-Egypt section. Under the existing agreements, one-third of the profits ofthe company available for distribution after a dividend of 10 per cent, on the paid-up capital is to be applied to repay-ment of subsidies received by the company under the agree- ment of May 15, 1924. In the new agreement, this provisionwill be abandoned and, in lieu thereof, the Government will receive an allotment of deferred shares carrying rights to halfthe excess over 10 per cent, on the ordinary shares which (1) may be distributed as dividends in any year during the10 years' subsidy period ; (2) may be earned as distributable profits in any year thereafter. The deferred shares will alsohave special rights in regard to participation in any surplus assets in the event of a voluntary winding-up of the company. The right of the Secretary of State to nominate twoGovernment directors upon the board of the company is retained, and apart from the special provisions above quoted,the general terms and conditions of the agreement will be similar to those embodied in the former agreements (Cmd.2010 of 1923; 2574 of 1926 ; and 2758 of 1926). 606
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