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Aviation History
1961
1961 - 0713.PDF
T, 25 May 1961 723 Men bt'-'ind the application for transatlantic air services are (left) Mr Harold Bamberg, chairman and man- ning Mrector of Cunard Eagle, and.(right) Sir John Brocklebank, chairman of the Cunard Steam-Ship Co TRANSATLANTIC TEST MATCH: FIRST INNINGS A LOAD FACTOR of more than 100 per cent was achieved inthe court room at Therese House in the City on May 16,the opening day of the Air Transport Licensing Board's hearings of Cunard Eagle's transatlantic application, which wasbeing opposed by BOAC. It seemed likely, as this issue closed for press that the proceedings would continue beyond the two-and-a-half days allocated—to be resumed yesterday, May 24. The contestants' places directly in from of Professor Jack and theother seven members of his Board were occupied by Cunard Eagle and by BOAC. Mr Norman Ashton Hill, director of Cunard Eagleand the applicant's main advocate, was flanked by Mr Harold Bamberg, his chairman and managing director; by Sir JohnBrocklebank, chairman of the Cunard Steam-Ship Co, and by Mr Donald, deputy chairman of this company. At the BOAC tablesat the corporation's counsel, Mr Henry Fisher, QC, flanked by BOAC legal people. Behind each contestant's table sat a formidable array of CunardEagle and BOAC executives, ready to be called upon to give evidence when required. These people included, for Cunard Eagle,the directors of operations, finance and engineering, and their US lawyer; and for BOAC, Mr Basil Smallpeice, managingdirector, and Mr Kenneth Staple, secretary and legal adviser. Mr Ashton Hill appeared to be rather slower and more hesitantthan usual, and those who expected robust batting in the opening overs was disappointed; he played rather a dull and unaggressivegame. Cunard Eagle's experience in scheduled and charter oper- ations was recited, and so were the resources and experience of theparent shipping company. Mr Hill recounted the history of Cunard Eagle's offspring in Bermuda and the Bahamas, how these had ledto the existing mid-Atlantic services in association with BOAC, and how this year his company expected to perform 426 Atlantic crossingscompared with 230 in 1960 and 65 in 1959. He spoke of Eagle's Boeing 707 order, adding that VC10 "may" be bought for 1964. Indiscussing terms and conditions of employment, he said in effect that Eagle's 707 pilots would get the same pay as BOAC's 707 pilots. He then came to the essence of his case—traffic. He produced adocument with a stylish red cover containing tables and graphs of North Atlantic passenger growth, copies of which had previouslybeen supplied to the Board and to BOAC. From then on everyone else was rather in the dark. Mr Ashton Hill would say to the privi-leged few with copies: "If you turn to Table 12 in the green section, and refer to the last column, you will see that in 1960 . . ." Therewould be an impressive rustle of pages on the top table as figures were recited and notes importantly made. Those without copieswere clearly feeling rather out of things. Plenty of Traffic The document itself was, in essence, a statement of facts aboutpast traffic growth between Europe and USA/Canada and the UK and USA/Canada—an annual average growth rate of 20 per centsince 1950 with an average load factor of 65 per cent. It showed each carrier's share of the Europe-North American market—though not of the UK-North American market, as figures could not be obtained. It was estimated that BOAC's 1953-60 share ofthe UK-US market was 37 per cent, and of the UK-Canada market 38 per cent, with load factors respectively of 64.5 and 65 per cent. Mr Ashton Hill hit the words "material diversion" and "wastefulduplication" for six. He thought this bit of the Act was a "hotch potch"—"where wasteful duplication begins or material diversionends," he declared, "is very difficult to determine." (Even BOAC's counsel was later on to say that "there is perhaps some argumentabout what is meant by material diversion.") It is obvious that arguments provoked by these old bogy words, which should neverhave got into the new Act, are going to waste a great deal of the Board's time. Mr Ashton Hill then stepped from the relatively firm wicket of'acts to the notoriously sticky one of forecasts. He assumed that UK-North American traffic in 1962-65 will grow each year by 20 peram, that BOAC's share will be 40 per cent, and that BOAC's load 'actor will be 65 per cent. This would mean that BOAC wouldcam 295,000 North Atlantic passengers in 1962, rising to 509,000 •n 1%5; Cunard Eagle's estimated traffic would be 39.000 in 1962a"a bout 62,000 in 1963, 1964 and 1965—assuming a "highly optirMstic" load factor, for a new carrier, of 65 per cent. The'-iffiijvd Eagle share would be 5 to 7 per cent. Then came the key statement: "/« no year does the applicant's estimated passengerscam ! exceed the balance of traffic increase over the previous year available for other operators after allowing BOA C its estimated share(40 per cent) of the increase over the previous year." This was as near as Mr Ashton Hill got to saying there will be sufficient trafficgrowth for Cunard Eagle to have what they want without materially diverting traffic from BOAC. It was indisputable, he said, that of all routes the North Atlanticwas the densest, carried the most traffic and had shown the biggest increase of any in recent years. Britain had only one passenger-carrier on the North Atlantic, BOAC, but there were two American passenger-carriers—Pan American Airways and Trans WorldAirlines. So that there should, he submitted, be British dual participation. The Second Day Wednesday morning opened with a submission from BOAC that the Board "should pay very little attention" to a UnitedResearch Inc report Competition Among US International Air Carriers, from which Mr Ashton Hill had quoted the previous day.Mr Ashton Hill then proceeded to sum up. "The North Atlantic route for which we have applied," he said, "is the densest in theworld; the increase of traffic the most rapid." The 3m passengers on the North Atlantic in 1960 were just "a drop in the bucket" ofthe potential among the populations at either end of the route. The figures which Cunard Eagle had presented, he went on, werenot scientific figures but estimated figures taken over a number of years—and it was not the first time that Cunard Eagle had had toestimate traffic potential on a route. "If we had always been wrong, we would not be here today." Mr Ashton Hill concluded, "Ifthere is any route in the world which admits dual participation, it is this one—and it does so at the present time." The bowling now passed to Mr Fisher, who asked the Board'spermission to cross-examine Mr Ashton Hill. He found his length at once. "If you are granted a licence," he asked, "you say thatthere would be no material diversion from BOAC and pure gain to British aviation—including BOAC?" "Yes." "There would be nopassengers diverted from BOAC?" "I didn't say that," said Mr Ashton Hill. "I said that there would be no material diversion,which I submit is not the same thing." There then began a long period of defensive play, BOAC'scounsel probing every aspect of the Cunard Eagle application, from the exact routes for which they had applied to—figure byfigure—the data on which Cunard Eagle presented their case. Statistically better equipped, BOAC were able, on detail points, tochallenge some of the assumptions on which Cunard Eagle's figures were based. But the impression remained that the bowlingnever really got past Mr Ashton Hill's bat. Questions About 707 Order Was the order for Boeing 707s, BOAC wanted to know, condi-tional upon this licence being granted? When were the Boeings ordered? And was there an escape clause if the application wererefused? Would Mr Ashton Hill produce the written contract? "Yes." was the reply, "the contract would be produced for theBoard if required." But it was a confidential document which Cunard Eagle did not wish to be made available to BOAC. Therewas a slender escape clause but this expired on June 7, probably before the result of the hearings was known. It was not the com-pany's intention to exercise it and thus to accept the heavy penalties involved. "So it is true to say," Mr Fisher asked, "that your com-pany has got to find £6m before the end of June next year?" "Yes," Mr Ashton Hill replied, "that is our commitment and some of ithas been paid already." "How was it," next asked BOAC, "that Cunard's forecast oftraffic until 1965 had been based only on figures for four years?" "They were the only ones available." Did not Cunard Eagleagree that the longer the period over which figures were studied the more accurate the forecast could be.—"Not necessarily. It dependsupon the factors which had influenced traffic during that time." A very close study had been made of the figures for the four yearsconcerned. On no occasion had the increase fallen below 25 per cent so that the annual increase estimated by Cunard Eagle of only20 per cent could be regarded as being conservative. Mr Fisher went on to test and probe every detail of the Cunard Eagle traffic figures. (This review of the hearing will be continued next week. Leading article: page 685 this issue.)
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