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Aviation History
1945
1945 - 0180.PDF
98 CIVIL AVIATION FLIGHT JANUARY 25TH, 1945 Air Transport Economics FIVEPENNY SINGLE FARE PER PASSENGER-MILE MAY PAY ON SHORT RUNS WITH GOOD LOAD FACTOR : SUBSIDIES NECESSARY FOR LONGER STAGES MANY optimistic forecasts have been made by allsorts of people in all sorts of places of the tremen-dous future for commercial aviation. That it will forge ahead and will be of inestimable value, particularly to the British Empire, no one would deny. However, nothing but disappointment can result from prophecies which bear little relation to realities. The day may come when everybody who has to travel more than 100 miles will go by air, but that day is some way off, and a more useful approach, for the present at arfy rate, is the examina- tion of aircraft and economics as they exist to-day, or at least as they may be expected to exist when commercial flying can be resumed. In the January 10th issue of The Shipping World, Major R. H. Mayo makes such an examination, and his conclu- sions are .illuminating, although they do not make par- ticularly cheerful reading. The Atlantic crossing, with its long stages and consequently small payload, Major Mayo considers to be in a class by itself, and he confines himself to an examination of two other classes of service, a short-haul service of 500 miles average stage lengths and a longer-haul service with 1,000-mile stages. One of the important items in running an air service, although by no means the only one, is the amount of work got out of an aircraft in a given time. Major Mayo points out that, contrary to a fairly commonly held belief, ' the aircraft operator does not have complete control of this. Geographical and political considerations have a great in- fluence on the number of flying h&urs which an aircraft can put in during a year. Figures of 4,500 hours have been achieved by American operators, but that is in war- time, when the public has been willing to travel at any time during the da)' or night that suited the operator. In the case of British services radiating from Great Britain to the Continent, and taking into account the fact that a considerable proportion of aircraft must be held in reserve, Major Mayo concludes that the operator will be doing very well if he can approach a 2,000-hour per annum standard for his whole fleet. Cost per Ton-mile Taking an average stage length, for the short-haul ser- vice, of 500 miles, using moderate-size aircraft, under fairly favourable conditions. Major Mayo arrives at an overall expenditure of about 2s. per capacity-ton-mile. This figure represents actual cost only, and does not include any allowance for interest on capital or other form of profit for the operator. Luggage which the passenger must be permitted to take with him free of charge must be taken into account. The figure arrived at, for the short-haul service, brings the average weight of a passenger and his luggage up to 225 lb., which gives approximately ten passengers to the ton. Major Mayo gives the following table of revenue for dif- ferent fares and load factors. SHORT-HAUL SERVICES. d.Basic single fare per mile < 4 Net revenue per passenger-mile .... 3.4 Net revenue per ton-mile 34.0Net revenue per capacity-ton-mile at Load Factor: 40 per cent. 13.650 per cent. 17.0 ' 6p per cent. 20.4 70 per cent. 23.8 The net fare received by the operator is considerably lower than the actual fare paid by the passenger because d. 5 4-25 42-5 17.0 21.2 25-5 29.7 d. 6 51.0 20.4 25-5 30.6 35-7 an allowance must be made for reductions on return tickets and for agents' commissions. The assumption is made that the net revenue to the operator will be aboujt 85 per cent, of the basic single fare paid by the passenger. At a basic single fare of 4d. per mUe the traffic does not pull its weight even at a load factor of 70 per cent., which is higher than can be expected. At 6d. per mile the traffic pulls its weight at 47 per cent, load factor, but this fare is too high for the general public, and 5d. per mile seems to offer the best compromise. But it should be noted that this requires the fairly good load factor of 56.5 per cent. A concrete example is provided by the London-Paris route, which is about 215 miles. The single fare, at 5d. per mile, will be ^4 10s., and the return fare perhaps £y 17s. 6d. Major Mayo points out that this may seem high, but that actually it compares reasonably well with the pre-war fares for this service under subsidised conditions; it also bears a reasonable relationship to pre-war fares by surface transport. Passenger Weight Increase Turning his attention to the longer-haul service of 1,000- mile stages, Major Mayo finds a somewhat sombre picture. For these longer flights the passenger will expect, and must be allowed, a greater luggage weight. This brings the weight of passenger and luggage up to 275 1b. and the num- ber of passengers per ton down to eight. On this basis the fare /load factor table works out as follows: — LONGER-HAUL SERVICES, d. Basic single fare per mile 5Net revenue per passenger-mile .... 4.25 Net Revenue per ton-mile 34-O Net revenue per capacity-ton-mile atLoad Factor: 40 per cent. 13.6 50 per cent. 17.060 per cent. 20.4 70 per cent. 23.8 Major Mayo's estimate of expenditure per ton-mile for the longer-haul service is 2s. 6d. As in the case of the short-haul service, this figure does not include interest on capital nor any other profit for the operator. The grim fact is disclosed that even at 7d. per passenger-mile a load factor of, 63 per cent, must be achieved if the operator is to break even. Unfortunately this fare of 7d. per passenger mile is coupled with long distances. From London to Sydney is about 12,000 miles, so that the single fare must be £350. More, if the operator is to show any profit on the route! As Major Mayo says, a few heads of firms on urgent busi- ness, and a few very wealthy globe trotters, might be able to afford it, but an average load factor of 63 per cent, at fares of this order is a forlorn hope. And he comes to the conclusion that if it is decided as a matter of state policy that long-distance air travel must be brought within reach of a reasonably wide public, some form of direct or indirect subsidisation is inevitable. On this question of subsidies Major Mayo says: "It seems to me that there is nothing whatever to be ashamed about, in paying or receiving a subsidy, provided it is fair payment for services rendered to the State. Anyway, if it is decided to run such long- distance air services by State enterprise, they certainly will be subsidised, so why should free enterprise be expected to achieve a miracle by making them pay without subsidy? " The somewhat gloomy picture painted by Major Mayo of the cost of passenger transport is relieved by a more d. 6 5-i 40.8 16.3 20.4 24.4 28.5 d. 7 5-9547.6 19.0 23.8 28.5 33-2
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