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Aviation History
1960
1960 - 0012.PDF
12 PLIGHT, 1 January 19&0 THE KEY TO "VLF" . . . "we, EAA, want a share in it. But the Government will have tobear the loss which we will make even at a 100 per cent load factor." He explained that Airwork and Hunting-Clan had, over a yearago, said that there was no room for the proposed Colonial coach service which EAA had wanted to introduce with Canadairs. Thethen UK Minister of Transport, Mr. Watkinson, had given it his approval for a period of seven years, though the East AfricanGovernment had given it approval for only one year. He explained that EAA's pool agreement with BOAC did not include theCanadair Colonial coach service. "We don't care two hoots whether VLF is granted," he said, but he emphasized again that, if it wasgranted to anyone, EAA must have its share on the conditions that he had outlined. I hope to refer in a later article to EAA's present position andfuture prospects, but on record in this context must go Col Mostert's remark that the bulk of the traffic moving betweenthe UK and East Africa originates in East Africa. "We contend that traffic should be shared on a fifty-fifty basis," he said. "Atthe moment we carry about a tenth only, and we are not being com- pensated for the loss of the rest." He could not discuss the poolagreement with BOAC, which was a private commercial arrange- ment, but "it is all money going out of this country." He explained that he had four masters—the Air Authority andthe three Governors, so "I have to be careful what I say. But the VLF issue was "a political matter which rebounds on us, andwe do not advise them to let anyone run us out of business. We operate the sort of services which carry the goats and the cabbage—no one else wants to carry these tilings. Sometimes all that is left when you get to the destination is the goats." From the airport I drove back into the city (Nairobi, with itscathedral and fine new buildings, is a city and not a town), to see Mr. Denis Mathews, who is general manager of the East AfricaTourist Travel Association. This organization is similar in its constitution and terms of reference to the British Travel andHolidays Association. About 60 per cent of its reyenue comes from the Government, 30 per cent from commercial interests, and thebalance from publications, advertising and so forth. It looks after the promotion of tourist and travel interests in all the East Africanterritories. Mr. Mathews is also a member of the Air Transport Licensing Advisory Board. The VLF Recommendations I asked him whether he could say what had been the recom-mendation of this Board to the Air Authority. He could not, because the matter was still being considered. But "we renderedour recommendations to the DCA on May 8, and not a word has been said since then officially," though the Minister of Commerceand Industry, Mr. Hope-Jones, had said that he was in favour of VLF. [see later my report on a conversation with Mr. Hope-Jones]. "We have protested, with the Press present, at the long delay. Our job on the Board is to represent the public. We canbe briefed by the Governors, but they will say that we have got to hear the evidence first before we can make our recommendations." Mr. Mathews cautioned that "V.L.F. is not all the beer andskittles it is thought to be," but he agreed to my suggestion that a carefully controlled VLF arrangement, say one service a fort-night, would not damage the existing carriers. Kenya had had 58,000 tourists in 1958, over 34,000 of whom had come by air, thebalance by sea (15,500), and surface (8,500). His Association had welcomed Hunting-Clan's applications to operate inclusive toursto East Africa, applications which had been submitted more than a year ago. "We have been promoting package tours for sevenyears," he said, and he proposed to investigate the possibilities of their development in a forthcoming visit to the United Kingdom.But, so far as VLF was concerned, "I say that East Africa should have given some indication of its views one way or the other, yeaor nay." The "dithering" had stopped a lot of potential traffic from travelling, and it had "most certainly caused a recession."Asked whether the established coach-class carriers Airwork and Hunting-Clan, or the pioneer VLF applicant Eagle, should bechosen to operate VLF services, Mr. Mathews said: "I don't see why Eagle, who are the pioneers, should be excluded mpreference to the established carriers." From his 11 years' experi- ence of the business, he considered that "75 to 80 per cent of VLFpassengers would be new travellers." Next I went to the Kenya Legislative Council, the beautifulnew Parliament building in the centre of the city which, though it would look out of place in Westminster, most surely set anunsurpassed standard in British Africa's civic architecture. Here in the lobby I was received by Mr. W. E. Crosskill, Ministerof Tourism. He emphasized that "we welcome cheap air fares provided there is no disruption of the established services." Hispersonal view was that "unless there is a substantial reduction, well below the proposed economy services, we won't get thetraffic." He would give no opinion of the degree of new traffic which would be generated by VLF: he would "not be justifiedin attempting to put a figure" on that crucial matter. But he hcd given a lot of thought, as Minister of Tourism, to the developmentof package tours. Many people did not like to be herded in big conducted parties; they would prefer to travel in smaller partieson the scheduled services. If properly handled, package tours could be carried on the existing scheduled services by the partchartering of seats in the manner introduced by BEA in Europe, The airlines would get many more tourists "if they were ableto package them up in smaller groups rather than in big whole- aircraft groups of, say 50 to 100 people." But this would not bepossible unless lower fares were made available on the existing scheduled services. At the moment tourist agents were perforcedriven to charter whole aircraft, but if they could do it on scheduled flights they could expand their business enormously.This was his answer to the VLF problem. He threw into the dis- cussion a bit of air transport economics to illustrate his point."Let us say that a Britannia costs £1 a mile to charter. Over the distance to the United Kingdom and back, say 8,480 miles, thereturn fare would be £77 with a 100 per cent load factor. With a more realistic 80 per cent load factor the fare works out at lessthan £100, which was the proposed fare to East Africa. Doubling the Tourists The value of tourism to East Africa, Air. Crosskill estimated,was about £7m a year. Kenya's share of this, £5m, worked out to the accepted international formula (money spent per tourist, etc.),was 3 or 4 per cent of Kenya's national income. This was "far too small," but it could be doubled in a year or two, and increasedstill further thereafter with VLF. The problem was not only one of air fares: like the British Travel and Holidays Association, hecontended that there was a need for many more hotels. "But my view is that BEA's system could be applied here, by offering onscheduled services block allocations of scheduled seats at times when there is a surplus of capacity." He felt that it was "a goodprinciple for EAA and BOAC and the established carriers to con- sider." He could not say whether it was a good thing to allowindependents or the chosen instruments to apply the principle. I also asked how his principle would satisfy the VLF needs of EastAfrica's resident population who, unlike tourists, wanted to travel home, or to bring out their relatives, or to send home their childrento school. How would they be able to benefit from package tours? Mr. Crosskill said that the principle could be visualized both on apackage tour basis and as an airline direct-to-the-public basis. He reverted to his contention that a 20 per cent reduction in faresmight not be as profitable as a reduction of, say, 40 per cent. This was a figure given to him by authoritative people in the travelbusiness here and in the United Kingdom. And he emphasized that this was the only way to introduce VLF without disruptingthe existing services. He agreed that ordinary people would be most disappointed if all that they got after all the raising of VLFhopes was a 20 per cent reduction in fares. And he agreed that the idea of introducing VLF in the form of mixed freight-pas-senger services was worth considering. He felt that people would be prepared to put up with some discomfort providing the fareswere low enough. Business Might be Lost Mr. Crosskill warned that if the airlines did not soon solve thelow fares problem, they might find that business would pass out of their hands. "Supposing the Kenya Farmers' Association,which accounts for 12,000 fanners and their iamilies, ran their own airline?" He did not mean that literally, but he had heardthat the West African Chamber of Mines were chartering aircraft to operate their own leave services, and the Cameroons Develop-ment Corporation was doing likewise by chartering 56-64 pas- senger Viscounts at 12s 6d a mile. He was not sure of the effectof these operations upon the established carriers, and he did not know many of the details. But this was one of the possibilitiesthat had to be taken into account by the airlines. Mr. Crosskill was joined in his conversation with me by Mr.M. N. Evans, his permanent secretary. The next call I made was at the offices of the East AfricanStandard, whose editor, Mr. Kenneth Bolton, is respected for his comment on the low air fares issue.He felt that the next move might be a compromise agreement on a fare level somewhere between the new proposed economyclass fare to Nairobi of about £190 return and the proposed VLF fare of £100 return. The compromise might work out at a figureof about £150. The independents and BOAC/EAA might settle for a new Colonial coa~h standard with Viscounts or Britannias atthis compromise fare, while BOAC and EAA would operate their Comets at the higher first class and tourist fares. It was indeed hisguess that if Eagle had not weighed in with the £100 VLF application, a fare level of the order of £150 might have been underconsideration today. "If £100 is regarded as operationally un- economic," Mr. Bolton remarked, "there may be no reasonable (concluded on page 30)
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