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Aviation History
1945
1945 - 0557.PDF
MARCH 22XD, 1945 FLIGHT 3*7 THE CIVIL AVI (CONT not be excluded. In such a cast the pre-war operator will IK;afforded an opportunity of participating in the capital of the sub- sidiary company instead of ot in addition to taking up shares in thenew Corporation. As stated previously, it is an essential part of the Government'splan that tht new Corporation shall be responsible for all the British air services on the scheduled routes Its right to run on these routeswithin the United Kingdom will be exclusive. Its services to Europe will be run in parallel or, it is hoped, in some cases in conjunc-tion with the services of other European countries to the United Kingdom. These exclusive rights are clearly necessary to give ^ economical operation and the running of a maximum number ofair services. The plan will, therefore, provide for the Cor- poration to run some services,both in the United Kingdom and in Europe, which willinitk Uy be run at a" loss and some of which may never showa profit. Services of this kind are necessary in the public interest and a comprehensive scheduleof services will be settled which will serve the public interest as well as fulfilling pureiy commercial traffic needs. g. By bringing into the Corporation those interests which are con-is cerned with land and sea travel in the United Kingdom and to P Europe, arrangements will lie made for mteravailab'iiity of ticketsfor the different forms oi travel on all stages of the routes, for the use of the existing offices and agencies of the various participantsboth at home and abroad, and for the most convenient adjustment of times and frequencies of services in the interest of air travellersto facilitate through connections with other forms of transport. The European and internal air routes are likely to be more..lucrative than some of the Commonwealth routes which are to be ^ aligned to B O.A.C as the direct operating Corporation. TheGovernment therefore think it right that the financial interest of B.O.A.C. in the new Corporation which will operate the Europeanand internal air routes should be assessed in the light of* this con- sideration as well as of the technical contribution which it canmake to the new Corporation. While it is not proposed that B.O.A.C. should have a majority holding in the new Corporation,it is intended that its interest should be substantial. South American Route.—The South American route will beassigned to a new company in which the majority participants will be those British Shipping Lines operating to South Americawho have associated together for this purpose as British Latin American Airlines, Limited. Here again it is proposed that B.O.A.C.should participate in the capital and management of the new Cor- poration, but its share in the capital will be smaller than thatwhich it will receive in ihe Corporation responsible for the European and internal services. The British Shipping Lines which have forso many yeais carried a large proportion of the passengers and trade between Europe and South America and have their wideconnections and organisation and their goodwill in the areas to be served by the new air route are, in the view of His Majesty'sGovernment, in the best position to make the service a. success. They have expressed their willingness to risk their own capitalin operating the route without subsidy. . Transfer of Shares in the Air Transport Corporations.—The trans-port and travel organisations which have been invited by the Government to participate in the new plan have been selected byreason ot the positive contrinution which they can make in skill and experience to the new Corporations. That they are preparedto invest their own money without any Government guarantee is an indication of their belief in the future of civil air transport andan earnest of their intention to operate efficiently; but they have not been invited merely as investors. They will take a permanentstake in the enterprise; and the Government has accordingly laid it down that there shall be no transfer of the shares in the capitalof the new companies which are allotted to the participants. This will apply not only to the two new main air transport Corporations,'• but also to the subsidiary companies which may be formed by jljfc B.O.A.C. to operate specific Commonwealth or Atlantic routes inwhich Shipping Lines may participate, and to any other subsidiary companies which may be formed by the other main air transportCorporations to operate particular services, such as those to the Channel Islands or the Isle of Man, where constitutional or otherconsiderations make the formation of subsidiary companies desirable... No Vested Interests Payment for Goodwill.—His Majesty's Government do not regardanyone as having a vested interest in the air. Although the new aif transport Corporations will be entitled to acquire at a fairvaluation from existing air line operators any physical assets which are needed for the new services, the Government do not feel theywould be justified in approving an allowance or issue of shares to participants in respect of goodwill of "development expenses" pre-,viously incurred. The whole of the capital of the new Corporations and their subsidiaries will thus be represented either by physicalassets acquired or cash subscribed. Overhaul of Aircraft.—In order to ensure the maximum of effi-ciency and economy, the three air transport Corporations will join in the creation and management of a combined organisation for•, the overhaul of aircraft. Training of Air Crews and Ground Staff.—The highest standardsof skill and reliability must be achieved for air crews and ground staff. For this purpose the three Corporations will maintain a com-bined training establishment at which their flying and technical staffs will be trained, and at which refresher courses will be available. Rccmittnent of Staff.—The constituent elements of the three ATION CHARTER I N U ED) Corporations have expressed their keen desire that every possibleopportunity shall be given to officers and men of the Royal Air Force to take servic" with the Corporations. Close relations willbe maintained with the Air Council, through the Minister for Civil Aviation, in order to give full effect to this intention. It will, how-ever, be appreciated that openings for employment in civil air- transport will not be large compared with the wartime strengthof the Royal Air Force. Welfare of Staff.—His Majesty's Government will also make it acondition that the terms of service of these Corporations shall be those of a "model employer"; and in particular that special pro-vision shall be made for pilots and other members ol air crews in the event ot death or disable-""""""" ment while ont;;tged on Hying duties, and for tin- giantiux ofsuperannuation allowances to tlio^c classes lor whom suitablypaui t;ro!niil employment cannot be piovided when they are pastHying age. The participants in the Corporations have expressed their ready assent to tiiis condition. A scheme of this kind, which was stttled in agreement with the appropriate employees' Unions, is already in operation in thecase of B.O A C. Relation of Mtnister for Civil Aviation to the Air Transport Cot-porations.—Tho appointment of members of the British Overseas) Airways Corporation will be vested in the Minister for CivilAviation; and he will also approve the appointment of the repre- sentatives ot B.O.A.C on the Boards of the other two main operat-ing companies Th:- appointments of Directors upon the Hoards of the other two main operating companies will be subject toapproval by the Minister, as will the representatives ol the Shipping Lines upon the Boards of the subsidiary companies ol I! O.A.C.The approval of th" Minister will also be required to the Memo randurn and Articles of Association of all the companies, both mainand subsidiary, which play a part 111 the si In me. Cardinal Principles Once the Corporations and subsidiary companies have been estab-lished and the members of their Boards appointed or approved by the Minister, as the case may be, it is a cardinal principle ofthe plan that the Corporations and the companies should be responsible for the operation and management ol the aii set vicesunder their control. While management must vest in ihe Corpora- tions and companies, the Minister must have a general controlover broad aviation policy. Thus all companies must conlorm to the policy laid down by International Convention or by bilateralor multilateral agreements entered into with other States by His Majesty's Government. Further, it is part of the plan that theCorporations shall operate, either directly or through their approved subsidiaries, all the air routes which are assigned to them. Asstated above an agreed schedule ol routes so assigned to each, of the Corporation will be settled. These routes the iCorporaiionswill undertake to operate They will not have the power to cease operation on any scheduled route without the consent ol theMinister; but such consent will not lie unreasonably withheld if events should prove that one or other of the agreed routes is neithercommercially practicable nor required for the public interest. The general policy of His Majesty's Government is that bothinternal and external air services should operate as far as possible without subsidy.Internal Services.—So far as internal services in the United King- dom are concerned the participants in the Corporation to whichthese routes will be assigned—and who are investing their own money therein—are willing to run without subsidy the agreedschedule ol routes which will include, as well as the remunerative services, tho?e routes which the Government regard as desirable inthe public interest, although some of them, if they were dealt with in isolation, could not be run at a profit. International Services.—In the international field the Governmenthave already declared that it is a cardinal aim of their policy to reduce wasteful competitive practices and, in particular, to controlsubsidies with the object of ultimately eliminating them altogether. To this end, they proposed in the White Paper on InternationalAir Transport (Cmd. 6561), and later expounded at Chicago, their considered plan for avoiding uneconomic competition in internationalair services, by maintaining a broad equilibrium between transport capacity and traffic offering a fair division of services between thenational air lines engaged on international routes, and an agree- ment as to freight and passenger charges. His Majesty's Governmenthad hpped to secure this by multilateral convention. This did not prove to be possible, but the broad principles laid down in theWhite Paper on International Air Transport remain the policy of His Majesty's Government. In any reciprocal arrangements whichthey make with foreign countries, the Government "will stipulate for the reasonable application of these principles. In this way it ishoped that wasteful competition and subsidies may be largely eliminated upon the international routes in which Great Britain isinterested. It is the intention that the agreed schedule of services on the European routes and the Latin American service should beoperated without subsidy; provided always that services which the Government regard as essential to maintain are not faced withhighly subsidised competition. Commonwealth Services.—In the past the operation of certainof the Commonwealth routes has required a subsidy. These routes are so essential in the interests of Commonwealth communicationsthat His Majesty's Government will be prepared to afford the necessary financial help to enable B.O.A.C, to operate them. New Routes.—It is intended that the agreed schedule of routes to
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