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Aviation History
1961
1961 - 0924.PDF
24 AIR COMMERCE . . . FINNAIR'S FORMULA MOST European airlines find that their intra-European servicescan only be made profitable by arranging pool agreementswhich allow load factors to be hiked up into the high sixties. Yet Finnair, operating to a large extent on its own on an economicallyinhospitable network, and consistently failing to fill its aircraft more than half full, continues to return a regular profit to itsshareholders. Examination of the company's recent annual report for 1960reveals that the secret of Finnair's formula is high staff-productivity. It is probable that no airline outside the US does so much short-haul business with so few staff as does Finland's national carrier. In 1960 the company's 1,413 employees extracted an output of36m c.t.m. from their fleet of three Caravelles, six Metropolitans and nine DC-3s, equivalent to an average rate of about 27,000c.t.m. per employee over the year. For an airline with an average passenger-haul of only 272 miles this is quite remarkable. Anotherindex which reflects the economic use of manpower is the relation- ship of salaries and wages to total costs; whereas most Europeanairlines show a proportion of about one-third, in the case of Finnair the proportion is as low as one-quarter. The airline'ssuccess in keeping down staff costs apparently results from the exercise of rigid control over recruiting, coupled with extensiveresort to sub-contracting. Another factor that helps Finnair in attaining solvency is anabove-average revenue rate. On its international services this is because of the relatively high levels at which overwater fares arepitched in northern Europe. Domestic services, on the other hand, are believed to be subsidized, but no hint of this is given in theannual report. Bearing in mind the effect on capacity on introducing threeCaravelles into such a small fleet, the company's ability to retain load factors at the 1959 level of 47 per cent was highly creditable.This was only achieved by a 38 per cent increase in traffic. Because of the greater emphasis on high-rated international traffic, revenueincreased even faster—by 43 per cent. This growth took Finnair's passenger total over the half-million mark for the first time—theI960 figure being divided into international scheduled services, 186,000; domestic scheduled services, 310,000; charter services,20,000. Because of the longer passenger haul on the international services (425 miles as against 181 miles on domestic routes), thisclass of traffic yielded the bulk of Finnair's revenues of Mk 4,117m in 1960. The major problem facing the airline continued to be the highseasonal variation and low density of traffic on its services. Despite Finnair's concentration on a restricted network—unduplicatedroute distance only 8,000 miles (international 5,200 miles, domestic 2,800 miles)—the average loadings were only 27 passengers oninternational services and 19 on domestic services. These low figures reflect Finland's lonely situation off the air tracks of Europe.The country's enterprising efforts to stimulate tourism, and the closer integration of the national economy into Western Europe,will both lead in time towards a thickening of Finnair's routes. In the meanwhile, however, Finnair is showing how to make thevery best of a bad job. FLIGHT, 6 July 1961 TWOPENCE A MILE TO SCOTLAND BEA intend, subject to ATLB approval, to offer off-peak faresbetween London and Scotland this winter that are cheaperthan the existing second-class rail fares (although British Railways do run special excursions at lower rates). BEA's proposed fares toScotland are £3 3s single and exactly twice that amount return; the corporation claims that these are the cheapest scheduled airfares in the world. A second-class single rail ticket to Glasgow costs £3 12s, and a shilling less to Edinburgh; average rail time toGlasgow is eight hours. BEA's 139-passenger V.953 Vanguards will leave London (Heathrow) nightly at 11.40 p.m. and arrive atRenfrew 85 minutes later, flying on to Turnhouse Airport, Edin- burgh. The new fares are a pound cheaper each way than existingrates, and the passenger will be able to fly back any night without his ticket being subject to excursion date restrictions. BEA's announcement is well-timed politically, for the corpora-tion can present a strong case to the Board that independent competition on domestic routes (Cunard Eagle has applied forEdinburgh and Glasgow) will jeopardize the public's chances of being able to travel cheaper than by rail. Last year's Select Commit-tee report on British Railways made the interesting point that the average number of passengers per train has ranged from 102 in 1948to 91 in 1950, and was 98 in 1959, or in other words a good Van- guard load. Dr Beeching had better take a good look at how theFrench have solved the problem of rail/air competition with Air Inter if he does not want British Railways to suffer from air com-petition to the extent that the American railways have done. UP-TO-DATE WITH RIDDLER IDDLE AIRLINES, INC, which not so many months agowas in poor financial shape—almost certainly the only carrier in the industry to have described a year's financial results as "lousy"in a report to shareholders—is now well on the way to prosperity following the award of military contracts totalling SI5,410,679.These contracts, running from July 1, 1961, to June 30, 1962, provide $7,571,180 for Logair work with Argosies, $3,329,991for similar work with C-46s, $4,290,008 for MATS international work and an Alaskan C-46 fuel contract worth $219,500. Riddle'sArgosies and DC-7Cs are now flying to Japan, the Philippines, Alaska and across the Atlantic on contract charter work and toPuerto Rico, the US east coast and the mid-west. A net profit of $90,000 was made in May, and current efforts are directed towardsgetting a more economic route structure. The Domestic Cargo-Mail Service Case, now three years old, isexpected to be settled at any time. From it Riddle hopes for a permanent certificate, operating rights in the New Orleans, Birming-ham, Atlanta and New York markets, cargo service from Atlanta to Los Angeles and San Francisco and eligibility for subsidy.Further markets in Latin America are expected from the proposed merger with Aerovias Sud Americana Inc (ASA Internationa]Airlines), which serves Central America, Colombia and Ecuador. ASA's chairman, F. S. Buchanan, has testified that if the proposedmerger with Riddle is not approved ASA would probably be unable to continue common carriage operations, and "it appears thatwith ASA's limited resources it would not be possible to stem the recurring losses which are being sustained from the operationsbetween Florida and Latin America." The withdrawal last August of permission for ASA to serve Guatemala City had been a bigblow to ASA's financial position. ASA had also been troubled by changes in management which had proved detrimental to thecompany's operations. CUTTING THE RED TAPEP ERHAPS the world's least troubled tourists, according toIATA, are Europeans travelling in Western Europe and the United Kingdom. Almost all their governments, either individuallyor through such groupings as Benelux and the European Commu- nity, have now reached reciprocal agreements dispensing with visasfor one another's citizens. 1ATA considers that this year's tourists will have less trouble with government red tape than at any timesince the war. This country has now waived visas for about 54 nations. Japanhas simplified entry formalities for 16 countries by similar means, and currency declaration forms have also been dispensed with.Brazil is the first South American country to do away with the passenger manifest, and she has accepted the standard Embarka-tion/Disembarkation card for passengers. As Sir William Hildred has said, "The best argument for less redtape is the overwhelming logic of steadily increasing traffic. No government agency can hope to handle the masses of tourists whichwe are carrying in the jet age by old-fashioned processing methods and documents which date from the days of the quill pen." Pilot on the Carvair's maiden flight, recorded in our issue of June 29, was Mr D. 6. Cartlidge (left), one of Aviation Traders (Engineering) Ltd's two senior pilots. Captain R. Langley (right), managing captain of Channel Air Bridge, acted as first officer and standby pilot
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