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Aviation History
1960
1960 - 1817.PDF
PLiGHT, 9 September 1960 405 Tk • is t"e '/rs* "nPress/on t0 ^e published of Avro's short-range jet, thc^lh teferred t0 elsewhere in this issue. Engines selected are two 85° i turbofans; maximum weight is 52,0001b; and a maximum of 60 economy-class passengers will be carried at up to 570 m.p.h. AIR COMMERCE SKYWAYS AND THE ARGOSY ^ fEGOTTATTONS are taking place between British EuropeanI Airways and Skyways with a view, Flight understands, to the independent airline operating three Argosies for BEA onEuropean all-cargo services. Under BEA's original tentative arrangement with Hawker Siddeley (Flight, April 8), threeArgosies were to have been operated under a lease arrangement. It is clear from BEA's 1959-60 report that the corporation, mindfulof the very large amount of cargo capacity that will be available in its Vanguard and D.H.121 fleets, has been having second thoughtsabout equipping itself with a specialized new all-cargo aircraft. "It has become apparent," says BEA, "that the factor which willdominate BEA's freight policy in the next five years is the vastly increased dead-load capacity which will be available on passengerservices . . . Our freight policy must therefore be aimed primarily at maximizing the sale of this by-product." Explaining that arequirement for an all-cargo aircraft nevertheless still arises, BEA's report goes on: "We are giving serious consideration to theArmstrong Whitworth Argosy. The capacity of this aircraft may, however, prove to be too large for BEA requirements and it maybe more economical for the corporation to convert a number of V.800 Viscounts to a cargo configuration." The statement explainsthat no decision has yet been reached about future freight aircraft, but that "we have thought it desirable to report fully, at this stage,on the factors which will shape BEA's freight policy in the next few years and thus give the logical background to the decisionwhich is eventually made." If the proposed arrangement with Skyways materializes it willmean that this airline will be the most up-to-date of all British independents, being an operator of both the Avro 748 and theAW.650 Argosy. It seems logical that Skyways would be entrusted with the job, their freight partnership with BOAC having workedwell. Trans Arabia Airways, whose provisional order for two aircraft is now understood to have lapsed for the time being, hasmeanwhile ordered three converted DC-6Bs. According to a US source, Riddle's order for five Argosies, foruse on MATS "Logair" work, is firm and delivery of all five aircraft has been promised by February next. Price paid byRiddle exclusive of spares is $1.31 million (about £468,000) per aircraft. BEA AND THE HERALD A SURPRISING omission from BEA's 1959-60 annual report**-was any mention of the corporation's plans to operate the Herald on its Highlands and Islands services—or, indeed, of anyreference to the Herald at all, although it has been flying for a year or more in the corporation's colours. It will be recalled that, as long ago as June 1959, the thenMinister of Supply, Mr Aubrey Jones, said that three Heralds were to be ordered by the Ministry from Handley Page, for aprice of £750,000, for operation by BEA. A corporation spokes- man said last week that, so far as BEA is concerned, the Heraldarrangement still stands; but he could give no indication as to when operations were likely to begin. It is not clear what is holding up the BEA Herald programme,the speedy implementation of which is obviously in Handley Page's interests. But it is reasonable to speculate that the contractbetween the Ministry of Aviation and Handley Page could not reasonably be finalized by the Minister during the course ofdiscussions about HP's association with one or other of the major airframe groups. The fact that one of these groups, Hawker Siddeley, is pro-ducing the competitive—though less far advanced—Avro 748 is obviously a matter that has to be taken into consideration. QANTAS PROFIT PUZZLE TAST spring Flight came under fire from Australia for suggesting (December 11, 1959) that Qantas makes a profit largely as aresult of extraordinarily high mail rates. Our friends on Aircraft sairt that we were "up a gum tree." Although disputed, the validityot our suggestion is undeniable, and it is confirmed bv the latest Santas report. This shows that operating profit doubled in 1959 to exceed £A1 million, or £A85O,OOO net. -' remains true to say that generous mail rates are the backbone of the Qantas economy. But to pinpoint the reason for last year'sremarkable improvement is entirely another matter—a matter upon which, alas, the report gives no guidance. The chairman'ssingle-sentence explanation is to the effect that the improved profitability was thanks to the competitive advantages of Qantas'searly introduction (July 29, 1959) of the Boeing 707. The fact is that the key to the airline's profitability in 1959 lies in a rise intraffic revenue of 19 per cent (to £A26 million) over a period when traffic rose by only 12 per cent (total revenues rose evenmore sharply, by 23 per cent, to reach £A29£ million). The normal reason why revenues rise more sharply than trafficis that average revenue rates have increased. Yet here lies the mystery of Qantas's increased profit: every item of evidence inthe report suggests that revenue rates have in fact fallen. The only explanatory clue is a statement that the yield per mail ton-milewas less in 1959 than in 1958. When this is taken against a fall in mail ton-miles of 4 per cent and a rise in mail revenue of8 per cent it is obvious that the airline is being paid for mail which it does not carry. In other words, perhaps, that the pool agreementwith BOAC is working out to the advantage of Qantas. It is fair to deduce, in the absence of any information about pool agree-ments, that the same situation obtained in respect of passenger and freight traffic. Although costs rose by 20 per cent to £A28^ million, capacityincreased at a slower rate (14 per cent) to 148 million c.t.m. Thus cost level might have been expected to rise. However, the report'sclear statement that cost level has fallen very slightly (to 39.6d per ton-mile) can only mean either that Qantas is incurring a largevolume of expenditure on activities other than aircraft operation, or that the airline's definition of cost level differs from that whichis commonly accepted. In the current financial year the Qantas fleet of seven Boeing707s will be in full service, and this should mean a further rise in profits—unless, of course, the terms of the BOAC/Qantas/Air-India pool prove to be particularly disadvantageous to the Australian airline. Two factors will tend to offset the Boeing'sprofitability. In the first place, the airline will have to adopt a more rigorous obsolescence policy with the jets than it hasapparently in the past with its piston aircraft. And secondly, the astronomical recent rise in Qantas' capital (nearly doubled overthe past two years) will result in much heavier financial charges. Indeed, net assets valued at £A41 million stand so high in rela-tion to revenue that an accountant might be forgiven for thinking that the Qantas balance sheet, like so many others, depicted thebusiness of a "heavy industry" rather than an airline. WALK UP, WALK ON THE effect upon Allegheny Airlines of the no-reservation("walk-on") ticketing system introduced in October 1959 has been remarkable. Allegheny's main competitor on the routeconcerned (Philadelphia - Pittsburgh) is TWA, who operate Super Constellations in competition with Allegheny's Convair 440s andturboprop (Napier Eland) Convair 540s. Allegheny's 540 has a slight edge (lOmin) on speed, but this cannot entirely account forthe big rise in their business. Last October, when the experimental commuter scheme wasintroduced with the approval of the CAB, i'WA's share of the market was 122,000 passengers compared with 3,000 for Allegheny.Eight months later the shares were 114,000 and 44,000. Allegheny now reckon that next year their traffic will be 91,000 comparedwith TWA's 150,000 passengers. The new system was described in a Flight report from Phila-delphia in the issue of May 27, 1960, pages 738-739. The airline has applied to the CAB to use the system on other routes, and itcan be assumed that in this country BEA are watching events closely with a view to introducing a similar scheme on UK trunkroutes, possibly in the spring of 1962. .#
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