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Aviation History
1939
1939 - 1827.PDF
5oo Commercial Aviation ©Kfi? JUNE 15, 1939 THE NEW CORPORATION IN November of last year Sir Kingsley Wood announced that a public Cor poration would be established to acquire and operate the two major national air transport companies, Im perial Airways and British Airways. He explained that '' in the light of the opinions expressed by the Cadman Com mittee that dividends of subsidised air transport companies should be restricted to public utility rates and of the Govern ment agreement an principle that public money should not be used for raising divi- . dends to undue levels, it appears desirable to take steps to ensure that the large addi- : ' tional capital needed for development should be raised on terms which would not prove unduly ex pensive to the Exchequer. The rapid expansion of overseas services, coupled with the great technical advances which are being made in this sphere, moreover, call . . . for the pooling of resources and the strengthening of administrative and oper ating organisations to the fullest possible extent." The necessary Bill was published last Monday and the new concern will be known as the British Overseas Airways Cor poration. With the need for Parliamentary procedure and for giving the shareholders of each company twenty-one days in which to consider the Bill, it is unlikely that the Corporation will be in action before October. So far, the prices to be paid for the two undertakings have been fixed and the terms have already been approved by the companies' shareholders. These, in the case of Imperial Airways, permitted a payment of 32s. 9d. for each ordinary share of £i. This sum will amount to £2,659,086. Interest will be allowed on the purchase price at the rate of 4 per cent, per annum (less income-tax) as from March 31, 1938, to the date of payment. To British Airways, the Government was prepared to approve the payment of £262,500. Advances which had been made by the principal shareholders (amounting to £311,000) will also be repaid and interest will be allowed on the purchase price and on such advances at 4 per cent, per annum (less income-tax) from Sep tember 30, 1938, to the date of payment. The shares which British Airways held in two internal airline companies were not included. It was estimated that the shareholders would receive a total of approximately 15s. od. for each £1 share. Since voluntary settlements have been reached, the Bill con tains no provisions for compulsory purchase or arbitration. Terms of Reference Under the new Corporation, the national interest and pres tige will come first. Its statutory duty will be to secure the fullest development, consistent with economy, of efficient over seas air transport services. The Corporation will have a monopoly of subsidy for overseas air services, but it will have no monopoly of flying The Bill provides for subsidy to be payable until December, 1953, though the total amount in any year may not exceed £4,000,000—less £100,000 earmarked (until the end of 1943) for the assistance of internal airlines. Between the day when the Corporation takes over and the end of March, 1941, it will be paid a subsidy based on the actual deficiency resulting from the operation of services, old and new, but after this initial period the financial arrange ments will be based on three-year periods, so as to enable the Corporation to plan ahead. The Corporation will be able to Details of the "British Overseas Airways" Bill : A Permanent Committee for Civil Aviation Development to be Appointed place to the credit of its own general reserve account any excesses of revenue 01 savings in expenditure achieved as a result of efficient administration. The members of the Corporation, who will be appointed by the Secretary of State, will consist of a chairman, a deputy chairman, and a varying number of other membeis, not exceeding fifteen. They will, of course, be free to select their own management, upon whom will fall the main burden of administration. There will be complete independence in the ad ministration of the Corporation's affairs, and commeicial control will rest with the management, so as to give responsibility and incentive, though the Corporation is required to submit to Parliament an annual report on its operations. Certain responsibilities which involve the ex penditure of public money remain with the Secretary of State. Provision has been made for the interests of the staff of the existing companies, and the staff can retain membership of any existing superannuation fund. With the formation of the new Corporation an adequate development of new types will be especially necessary. From a national point of view it is important that British transport machines shall be available which not only meet the needs of the Corporation, but also find a market abroad. This question was referred to a small committee, with Mr. Harold G. Brown in the chair, which was appointed last February. The other members were Sir Charles Bruce-Gardner and the Hon. W. L. Runciman, with Mr. K. T. Spencer as secretary, and their report has just been issued. The committee received written and .oral evidence from many of the leading personalities in British civil aviation. A Committee They advise the setting up of a permanent Civil Aviation Development Committee, its main function to be that of co ordinating the needs of airline operators for new type aero planes, so that construction can be concentrated upon a relatively few types for which there should be a good chance. The Committee should have a high status and comprehensive terms of reference, and would advise the Air Ministry as to the types of civil aircraft needed and how best their construc tion could be fostered. The new Committee should, it is recommended, be independent of the Air Ministry, but work through the staff of the recently formed Directorate of Civil Research and Production. It should have an independent salaried chairman, and three other members representing the new Corporation, the Air Registration Board, and the Society of British Aircraft Con structors. Other airline operators, British and Colonial, should be co-opted by the Committee from time to time as necessary. The idea behind the Committee would be to assist the Brit ish air transport industry to obtain British civil aeroplanes of outstanding merit at competitive prices, and to ensure that any necessary State aid is applied to the best advantage. Airline operators would be expected to take their problems to the Committee. The Government has accepted, in principle, the proposal, and regard the Committee as a valuable means of securing an international as well as a national outlook for British civil aviation.' In the Pacific PAN-AMERICAN AIRWAYS may eventually operate a ser vice between San Francisco and Sydney, as well as Auck land. This is suggested by the arrival in Sydney of six of the company's technicians who are on their way to establish a flying-boat base in New Caledonia, The base is to be used for the projected San Francisco-Auckland service which will be run via Canton Island and Noumea. The choice of New Caledonia suggests a later extension of the South Pacific service to Australia. New Caledonia lies off the direct line of flight and is almost as near to Australia as it is to New Zealand. Canton Island, in the Phcenix Group, the first stopping place between Honolulu and Noumea, was originally claimed by Great Britain. It will be shared by Pan- American Airways and any British service across the Central Pacific route to Canada. New Equipment for China A NEW civil air fleet is being built up in China to cope with the commercial expansion in the south-west provinces. A Douglas D.C.2 recently arrived in Hong Kong for the China National Aviation Corporation, while an 18-passenger D.C.3 is expected shortly. It is thought that more Douglases will be ordered in the future. These machines will he added to the three D.C.2S which are now operating the Burma-Chungking and Chungking-Hanoi services. Three similar planes are also under repair, including the ill-fated Kweilin, which was shot down a few miles from Hong Kong on August 24 last year. The C.N.A.C. and Eurasia operations are now the heaviest since the Sino-Japanese war broke out—and in spite of the fact that the services to and from Hong Kong can only be operated in safely at night time.
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