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Aviation History
1959
1959 - 1952.PDF
28 August 1959 UP WITH FARES— FARES charged by American domestic carriers should now befixed at 12 per cent above those in effect before the date ofthe last temporary increase, February 10, 1958. This has been recommended by Mr. Ralph L. Wiser, C.A.B. examiner, as thefirst result of the long drawn out General Passenger Fare Investigation. This story goes back to 1957 when a group of domestic airlinessought immediate fare increases varying from 12 to 20 per cent. These demands were a sign not only of rising costs but more par-ticularly of the financial loads imposed by the heavy jet purchasing programmes of 1955 and 1956. The "G.P.F.I." was charged withthe task of examining the situation thoroughly and calmly. Since then, of course, die airlines have climbed out of America's seriousbusiness depression, of which the nadir was in April 1957. And, indeed, they have enjoyed "temporary" fare increases amountingto 10 per cent: an increase of 4 per cent plus one dollar per ticket (awarded in February 1958) plus the elimination of certain pro-motional-fare discounts—all this amounted to a general increase of the order of 10 per cent. The C.A.B. examiner also recommended that fares should bedetermined not so much as a profit percentage of revenues, but as a return on capital investment. For the big carriers he foundthat a reasonable rate of return would be 10.25 per cent and for the other trunk carriers 11.25 per cent (the difference was due tothe different ratios of "debt-to-equity" for the big four and the other trunk lines, respectively 45 : 55 per cent and 50 : 50 percent). This makes an average for the 12 trunk lines of 10.6 per cent. On the crucial question of depreciation (which the airlines havealways felt should be for management and not the C.A.B. to determine), the examiner proposes: (1) piston equipment shouldbe depreciated on a seven-year basis; (2) jet and turboprops over ten years; (3) jet and turboprop engines over five years; (4) 15 percent residual value for all flight equipment except for jet and turboprop engines, which would have zero residual value. During the final stages of the G.P.F.L., which were devoted tooral argument, it appeared that most U.S. carriers favoured a raising of fare levels by 15 per cent above the February 1958levels—as compared with 12 per cent recommended by Mr. Wiser. The only voice raised against any increase at all came from theCA.B.'s own Bureau of Air Operations, which argues that fares should be reduced from present levels by 4.6 per cent now, andby a further 4.75 per cent on July 1,1960. —DOWN.WITH FARES THE Air League of the British Empire proclaims that cheap air-•• fares are practical now on most routes. This statement is the result of the deliberations of an Air League committee of four:Sir Archibald Hope, a director of D. Napier & Son; Mr. Peter Masefield, managing director of Bristol Aircraft; G/C. DouglasBader, managing director of Shell Aircraft; and Mr. P. LI. Hunting, chairman of the Hunting Group. The advantages of low fares as seen by the committee are:(1) The stimulation of traffic; (2) the opportunity to employ exist- ing aircraft; (3) the promotion of more British air transport; (4) the provision of new markets for British aircraft; and(5) creation of more employment in die manufacturing and operating industries. The committee proposes that lower fares—-pi the order of 3d or 4d per passenger mile—could be achieved with fully depreciated, slower aircraft for scheduled operations, afare differential of 20-25 per cent, and the use of economic modern aircraft by low-cost operators. The League do not propose a break-away from I.A.T.A. toachieve fares of this order, but recommend that a "strong line" is taken at I.A.T.A. rate-fixing conferences. Introducing thepolicy, Sir Archibald Hope and Mr. Masefield repeatedly empha- sized that if a sufficiently rigid attitude was taken within I.A.T.A.it would prevail, but in any case the Government must back up low-fare demands made by British airlines within the Association.And they might make a start (as die Minister of Transport and Civil Aviation has already twice warned that he may) byauthorizing cheap fares on British colonial routes. Resulting threats to traffic rights could, say the League, be largely ignored;the U.K. "controls such a large volume of traffic that even if foreign airlines object, a firm line by Her Majesty's Governmentwill prevail." Diversion, the League considers, is just a bogy —the new low fares will create new traffic. Can these low fares (about half of present-day rates) be obtainedwith reasonable comfort, reasonable frequencies and reasonable load factors? Yes, says the League, by using written-off aircraft.Mr. Masefield suggests that a fully depreciated Viscount, on a stage length of 1,000 miles, could break even on a 50-55 per centload factor even selling its seats at 3d per mile. Domestic services need to be made very much less expensive (in terms of spendingpower European operators charge four times more than American domestic carriers over similar distances) and a start could be madeby removing the fuel tax which costs B.E.A. £lm annually on domestic services alone. BREVITIES The annual conference of the Aerodrome Owners' Association will be held at Bristol on September 24 and 25. * * * Maximum weight of the Handley Page Dart Herald has been approvedat 39,000 lb, an increase of 2,000 1b. Most of this will be used as payload which, say Handley Page, will be boosted by as much as 25 per cent. * * * United are to start U.S. transcontinental services with DC-8s onSeptember 18, a month ahead of the original schedule for the start of services. Delta's DC-8 operations are to start on October 15 betweenAtlanta and Miami. * * * The 1959 Branker Memorial Lecture to the Institute of Transport willbe read by Capt. Eddie Rickenbacker, chairman of Eastern Air Lines, at 5.45 p.m. on September 14 in the Jarvis Hall, 66 Portland Place, London,W.I. His subject will be "World peace through air transportation." * * * To date, B.O.A.C. have dismissed 40 stewards and two navigatingofficers for the alleged smuggling of precious stones and gold on the Corporation's Far Eastern routes. Whether or not the dismissed staffwill face civil charges would, a B.O.A.C. spokesman is reported to have said, be a matter for the authorities of the countries concerned. * * * Boeing have announced that Pratt and Whitney JT3-D1 turbofanversions of the Boeing 707-120 will be designated 707-120B and will include wings modified "for higher maximum cruising speed andlessened runway requirements." All of American Airlines' 707s will be to 120B standard by 1962 and both American's 720s and Qantas' 707sare also to be turbofan equipped. A.R.B. have issued further Civil Aircraft Inspection Procedure sheetsdated June 15, 1959. * * * In the six months ending on May 31 this year Douglas lost £5,360,000 and have increased the price of the DC-8 from £1.78m to £1.95m. * * * The Cornell-Guggenheim Aviation Safety Center of New York isto undertake a study of aviation safety research in Europe. The study will be conducted by W/C. B. R. Stanojlovic. * * * Aer Lingus made a net operating surplus of £119,673 in the financialyear ending March 31, 1959, compared with an operating deficit of £43,674 the previous year. * * * Suidwes Lugdiens (Edms) Beperke—South West Airways (Pty.) Ltd.of Windhoek, South Africa, have been admitted as the tenth associate member of I.A.T.A. There are 80 active members. * * • Sir Roy Dobson has said that A. V. Roe Canada is "investigatingthe possibility of producing civil aircraft," possibly in conjunction with U.S. manufacturers, at the Malton, Ohio, factory. * * * The outcome of recent talks in London between the U.K. and Israel was that El Al will now run a third weekly Britannia service from London to New York. * * * The Vanguard 951 has now completed all its flight resonance testing.Maximum true airspeed reached was 460 kt (in a dive) and maximum I.A.S. 403 kt, in contrast with the design speed of 370 kt Vanguardshave now completed 358 hr in 206 flights on three aircraft. * * * A new Italian helicopter airline called Elipadana, Societa Aha ItaliaTransport! Elicotteri (SAITE) was officially formed in Milan during July. Services will start next year, but experimental services with aSikorsky S.62 will be run this month between Milan, Elba, Venice, Trieste and Turin. Representatives of Britain's three turbine airliners were recently photo- graphed together on the apron at Havana airport, Cuba: a Bristol Britannia 318 of Cabana, a Wickers Viscount 755 of Cubana, and a de Havilland Comet 4 of Aerolineas Argentines
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