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Aviation History
1948
1948 - 1679.PDF
OCTOBER JJH, 1948 FLIGHT 435 Some Economic Factors in Civil Aviation The Annual British Commonwealth and Empire Lecture by Peter G. Masefield Before the Royal Aeronautical Society INTRODUCING his paper, Mr. Masefield said that, afterthe Crown, long-range transport was the most significantof all ties which bound the British Commonwealth and Empire into a community of free peoples. Of all theforms of transport which thus enlaced the Commonwealth, air transport was at once the swiftest and the most capable ofdevelopment. He quoted Paul McGuire's description of the Commonwealth: "The nearest man has yet approached toachieving a world community. It offers a framework on which a system of world order could be built." That wasthe great conception in which air transport was privileged to play a dominant part. Mr. Masefield had chosen his subject" because he believedmost sincerely that operating economics must be the founda- tion of all our progress in commercial aviation. To succeed,civil aviation had to be able to support itself financially. The purpose which air transport should be designed to serve wasall too often confused or ignored. The essential contribution which air transport had to make was improved communica-tions, which led to traffic robbed from older and less con- venient forms of transport, -and new traffic created by thenew need. In order to attract traffic on which its revenue depended, air transport must aim, he said, to offer superior,that is, more- convenient, carnage of passengers and goods than any competitive means of transport. To be fully effec-tive in its underlying purpose of improving communications, air transport must be safe, swift, regular, frequent and cheap.It must provide those three Rs of all means of transport: Reliability, Regularity and Revenue. Discussing subsidies and the profit and loss account, Mr.Masefield remarked: "Precisely how much civil aviation is costing the world at present is difficult to estimate, althoughwe do know that the total turnover of the airlines of the world has now reached about ^1.5 million per day and thatthey provide employment in one way or another for some 500,000 people. The profit and loss account of British civilaviation shows that there is a gap estimated at about -£28 million a year between the direct income and expenditure.This £28 million (2|d. on the income tax) is the real subsidy price which we are having to pay for the building up of anational Civil Aviation which will mean as much to the nation, in. the future as the mercantile marine has done in the past. On the subject of safety, the lecturer said that although air A NATIONAL BALANCE SHEET(Estimated Figures) Debit 1. Operating Costs 2. New Civil Aircraft Pro- duction 3. Research and Develop- ment (Including new pro- totypes) 4. Technical Ground Ser- vices (Air traffic control, lighting, navigational aids. etc.) 5. Airport Construction and Maintenance 6. Administration (Salaries and accommodation) Total Annual Debit... Deficits :— Millions £30 £17 £9 £8 £5 £2 £71 (42%) (24%) (13%) (11%) (7%) (3%) (100%) (a) Airport construction and maintenance gramme plus technical services (b) Operational Loss on Air Services (c) Research and Development . (d) Administration ... Total Deficits 1. 2. 3. 4. 5. Credit Millions Operating Revenues ... £23 (32%) Aircraft Sales (Home) ... £13 (18%) Aircraft Sales (Export) ... £5 (7%) Charges for Technical Services £2 (3%) Credit to be made nation- ally against : (o) Provision for future^ revenues 1 (b) National trade and I communications 1 £28 (40%) (c) Political and diplo- matic services (d) National prestige and security Total Annual Credit ... £71 (100%) pro- £11 Million *The difference between £7 Million the sum of the deficits and £9 Million the amount by which the £2 Million revenues fall short of ex-penditure is accounted for £29 Million* £1 million on aircraft sates. transport must be made much safer yet, the problem was oneof economics and not of sentiment. The same applied to the other factors, since the most economic aircraft in the worldwas of little value unless it attracted traffic. Major civil air- lines had never yet operated at a profit if all concealed andunconcealed subsidies were deducted. The reason for the un- economic nature of long-range operations had been that profitsfrom excess of revenue over direct operating costs.had never been sufficient to meet overheads. The two contributoryreasons for this were that aircraft had not been able to carry- sufficient payload to show an adequate margin of revenue overoperating costs, and that overheads had tended to be high because of pioneering and development, and the relativelysmall scale of business hitherto. To achieve the purpose of improvement in communicationseconomically there were four basic requirements : efficient ait- craft—economic to operate ; efficient operators—devoid of„ crippling overheads ; an efficient ground organization—mean- ing adequate airports, and adequate air traffic control ; andan airfaring outlook—on the part of the public which has to support civil aviation. The lecturer considered the last tobe probably the most important of the four. One of the best ways of achieving it effectively was through the nationalencouragement of light aeroplane flying, gliding and aero- modelling. Given the four requisites, air transport could con-tribute to national prosperity and wellbeing through the revenue derived from air travel and increased trade throughimproved communications; security as a result of the manu- facturing potential; and through them to internationalsolidarity. Referring to the status of air transport, Mr. Masefield men-tioned that the traffic carried on British airlines in 1947-8 was 40 per cent greater than that of the previous year, grow-ing to 41.6 million aircraft-miles and 627,000 passengers carried for 470 million passenger-miles. In the United Statesbetween 1938 and 1946 passenger-miles flown on domestic air services had increased by 990 per cent, and passenger-milesflown on international services by 1,780 per cent. This was a healthy sign, but the progress of commercial aviation hadnevertheless been retarded by one factor above all else. This was the so-called safety standard. Quoting American statis-tics as evidence, it was pointed out that for the year 1946 a passenger would have had to travel 560 million miles on U.S.airlines before he would have been killed, i.e., 1.8 deaths per thousand million passenger-miles. Ona comparative basis with other forms of transport, the statistics for the two-year period 1944-46 perthousand million passenger-miles were: omnibuses, 1.9 deaths; passenger trains, 2.1 deaths; scheduledairlines, 17 deaths; motor cars and taxis, 27 deaths. Of all the fatal accidents to scheduled transportaircraft in 1947 (a bad year) 1 per 50 million air- craft-miles—40 per cent occurred during approachand landing in bad weather. A concentrated attack on the problem of bad-weather landings and of producing a non-spinnable private aircraft, combined with a campaignagainst low- flying, would have most valuable re- sults in improving the safety record. "My ownview," said Mr. Masefield, " is that we shall have to come to a system of automatic landings for alltransport aircraft." On the table (overleaf) of the operatingstatistics of six international airline companies, Mr. Masefield remarked that even in these difficulttimes there are airlines which can show a surplus of revenue over operating costs, although admit-tedly a portion of the revenues are in the form'of mail subsidies. The best margin of profit was9 per cent of the turnover, whereas one airline showed a loss of 40 per cent. The average figurecame out at a loss of about 6d per aircraft mile
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