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Aviation History
1938
1938 - 1517.PDF
MAY 26, 1938. FLIGHT. SUBSIDIES In the FUTURE "Implementing" the Cadman Committee's Recommendations : A Pleasant . ,!•' Surprise for Internal Airline Operators : The New Licensing System THERE is no doubt that Sir Kingsley Wood's promisein the House on Wednesday of last week that ourinternal airlines should receive a proportion of the additional subsidy for civil aviation came as some- thing of a surprise to the majority of those not intimately concerned with the political side of air transport. The Cadman Committee had recommended an increase of £1,500,000 in the maximum sum to be made available for the assistance of civil aviation, but had rejected the idea of subsidising internal airlines. The Government has gone one better and offered a fifteenth of the total for the first year—a matter of £100,000—this subsidy decreasing during the next five years. In this way it is hoped that develop- ment will be stimulated, yet not by impairing the will to self-support in the years to come. The rest of the total sum will be divided into two portions, one of which, approximately ^1,000,000, will be allocated to Empire and other routes outside Europe, while the remainder, a matter of £400,000, will go to help the much-neglected European routes. Some of the ex-European subsidy will go to help the New Zealand extension of the Empire service to Australia, the development of a trans-Pacific service on competition with that which has already been experimentally operated by Pan- American Airways, and, possibly, towards the development of new services in the West Indies. In Europe it was hoped that new services would be operated to Berlin, Amsterdam, Prague, Vienna, Budapest, Oslo and Lisbon, and that the present service to Switzerland would be run throughout the year. Eventually it was expected that few of the European capitals would be outside the British airline network. Sir Kingsley explained that all foreign civil aviation to-day was heavily subsidised, and that more money would be needed if we were to keep our place. One of the primary objects of any aviation subsidy, of course, is to provide the necessary incentive for the manu- facture of civil machines in sufficient quantity and of a suffi- ciently advanced design to interest the foreign and Dominion market. Sir Kingsley said that the Government desired that British machines should eventually be used on all the services, and he mentioned that a promising type of all-metal medium- sized liner would be on the market early in 1939, and the possibility of assistance for the development of this machine was being considered. The Air Ministry had also invited definite proposals from constructors, after consultation with our two major operating companies, for a ten-passenger machine with a range of r,8oo miles for use on such services as those to Berlin, Copenhagen and Lisbon. A type of land- plane to succeed the Albatross was also being considered for use on long-distance oceanic and other services. Temporary Assistance In his statement about the £100,000 subsidy for internalairlines, he said that assistance was being given on the clear understanding that the companies must establish themselveson a sound paying basis during the five assisted years, and that thereafter no subsidy could be expected. Another con-dition of the subsidy was that at least 75 per cent, of the pilots employed on these services should be in the Royal AirForce Reserve. When he rose to make his first speech as Secretary of Statefor Air in moving that the Air Navigation (Financial Pro- visions) Bill should be read a second time, Sir Kingsley Wasduly applauded, and after he had-spoken members from both sides welcomed both his appointment and that of ,Capt. Bal-four as his Under-Secretary. . In the course of the debate which followed; general satis-faction with the arrangements were shown, and practically the only criticism came from the Socialist benches with the sug-gestion that civil aviation should be nationalised. MR. MON- TAGUE was the first member to put this argument forward,and he said that the principle of giving Government aid to firms operating for private profit was illogical. He referredto the " monopolistic character" of the industry, and said that the business of civil transport was recognised by the Government as a virtual monopoly. He stressed the pointthat only one or two companies obtained public money while others v^ere left out. Such discrimination, he thought.Strengthened the case for public ownership. • , SIR HUGH SEELY said that, although the Bill was a directoutcome of the Cadman Report, he did not think that the Committee could, in the short time taken,"have gone fullyinto the whole subject, and he hoped that the Air Ministry would not be bound by its report. He wanted the new AirMinister to go into the whole question of civil aviation in order to see whether greater co-ordination was possible andwhether new services could be given additional powers for expansion. He did not want civil aviation to,be tied to theold methods of subsidy. There was a danger that the vested interest in Imperial Airways and various other companieswould be able to push out any new undertakings. Private enterprise could not be defended in "such circumstances. LT.-COL. MOORE-BRABAZON came a little nearer to Mr. Mon-tague's suggestion when he said that, while he was not in favour of the nationalisation of air transport at present, theconditions in the industry made it one of the border-line cases since it was not yet paying for itself. There would be noappreciably greater difficulties in taking over civil transport in years to come than there were at present, and in the mean-time its development would best come about under the fire of private competition. He made a special plea for the de-velopment of the technical side, which was inclined to suffer, since the industry concerned had a very limited market. Hecited the case of the compression-ignition engine in this con- nection, and went on to describe rather luridly the conse-quences of the fire risk. If this country could develop a successful compression-ignition engine British civil aviation, hethought, would be supreme throughout the world. ' ' Imperial Criticism .'..'" ~ - MR. GARRO JONES, referring to the question of State con-trol, gave broadcasting as an example of its success. Although there had been a departure from the principle under whichImperial Airways had been made the chosen instrument, this was only a nominal departure because the monopoly had reallyonly been broken down in the case of a few internal airlines. He did not see why it was necessary that the shareholders ofsuch a private concern as Imperial Airways should be bene- fited by a subsidy increase, and he spoke at some length inexplanation of the financial and subsidy arrangements of this company since it was formed in 1924. He explained how ameteorological organisation had been placed at the company's disposal, how diplomatic facilities had been given to them,and how they received special grants for fleet modernisation and from the P.M.G. for the carriage of mails, yet no lessthan £46,000,000 would be received by this company and British Airways during the next fifteen years. It would bedifficult, he thought, for the Air Ministry to prove that Im- perial Airways had been a shining example of efficiency inthe realm of private enterprise, and went on to explain where he thought this company had failed in its methods, particu-larly those relating to propaganda. He thought that if we were to obtain a place in the world's civil air transport Im-perial Airways would need to be taken out of the hands of the small body of private individuals who manage the com-pany to-day. MR. R. ROBINSON agreed with Sir Hugh Seely that theGovernment should not be tied down to the recommendations of the Cadman Committee and that they should not takeup an attitude of complacency. Since good money was being paid to Imperial Airways and British Airways, he hoped thatit would be seen that they gave equally good value for it, and asked whether other companies, who have done a greatdeal of pioneering work, would be allowed to come into the picture, He wondered whether the welcome internal subsidy,though small, would be given only to one licensed operating company. COL. ROPNER simply asked whether the Under-Secretary ofState would make a clear and definite statement in the matter of Government policy concerning the subsidy for external air-lines. He had been told that it was the policy of the Air Ministry to limit subsidies on such services to one companv,
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