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Aviation History
1961
1961 - 0961.PDF
FLIGHT, 13 July 1961 61 dents could operate routes at lower cost than the corporations. MrLaker replied that they could do so, with the same routes and similar aircraft.Mr Marking asked Mr Laker to confirm a press conference state- ment, at the time BUA announced their order for jet aircraft, that tenwere unconditionally ordered and an option on a further five would be taken up if the licences were granted (Flight, May 18); Mr Laker re-plied that the continued use of Viscounts meant that BAC One-Elevens would be enough for BUA's existing commitments. Further questioned,Mr Laker said that if the licences were not granted, BUA would use some of the BAC One-Elevens ordered and get rid of the others. Mr Laker was questioned about BAC's estimates of operating costfor BAC One-Elevens, which Mr Marking, using a BAC advertise- ment in Flight for June 15 to support his argument, suggested might beoptimistic, since manufacturers' claims were seldom pessimistic. Mr Laker said that he thought BU A's estimates were conservative; althoughthe company had never pioneered the operation of a new type, they had considerable experience and had operated the Britannia 317 at lessthan the manufacturer's figures. Unfavourable to Britain Finally, Mr Marking referred to the agreement between the UK andPortugal, which provided that total capacity should be shared equally between the carriers of the two countries. Mr Laker said that thisagreement was unfavourable to Britain as it meant that the Portuguese would have 50 per cent of the traffic on a route where they producedonly 16 per cent of it. This would mean British passengers travelling on and helping to finance a foreign airline. Mr Marking then com-mented that the agreement had been made as the only means of securing routes to Portugal, and Mr Laker agreed that the passengers were beingcarried in British aircraft in any case. The Board asked Mr Laker to clarify the position regarding BUA'sorder for BAC One-Eleven aircraft. Mr Laker said that only ten air- craft were on order, five for existing services and five intended for useon scheduled services. This concluded BUA's general case, and Mr Marking next cross-examined Mr Ashton Hill, of Cunard Eagle Airways. Mr Marking asked whether Cunard Eagle held any route licences otherthan those for routes which they were currenty operating. Mr Ashtqn Hill suggested that the question was not relevant. Mr Marking saidthat the Board should have some assurance that Cunard Eagle, if granted licences, would operate services. He asked Mr Ashton Hillabout ix number of routes for which Cunard Eagle were licensed. Mr Ashton Hill said that one, from Manchester to Oslo, was being operatedto Bergen; Manchester - Innsbruck was being operated via London but not direct; Manchester - Brussels would be operated; about Manchester-Rotterdam he was not sure; Cunard Eagle were not operating the other six. Asked why the licences for these routes were not being used, MrAshton Hill said that they had withdrawn from the Manchester - Goth- enburg route because they did not want to operate to Helsinki. BEAhad taken over the route and had not operated it. Questioned about Cunard Eagle's choice of routes now applied for,Mr Ashton Hill said that they had not applied for any of the uneconomic domestic routes because they had to satisfy the Board that there wouldbe no material diversion of traffic. To suggestions that Cunard Eagle were trying to take the cream of the profitable routes, Mr Ashton Hillreplied that they were seeking a percentage of the future growth of traffic. The Board asked what percentage and Mr Ashton Hill saidabout 7 per cent. Asked by Mr Marking to comment on the suggestion that the Cunard Eagle revenue 1962-63 would represent 55 per centof BE A's planned growth from 1961-62 to 1962-63, he said that this depended on the frequency to be operated. Cunard Eagle would notoperate to the maximum frequency until 1965-66. Mr Ashton Hill was cross-examined by Mr Oswald, for the BritishTransport Commission, who asked him to confirm his statement that Cunard Eagle had chosen routes on which there would be no materialdiversion from BEA, which Mr Ashton Hill did. Mr Oswald asked whether diversion from the services of the British Transport Commis-sion had been considered; Mr Ashton Hill said it had not and. to the suggestion that BTC had the right to appeal to the Board, replied thatthe Board would be guided by the Act which instructed them to "exercise their functions in such a manner as to further the development of Britishcivil aviation." Mr Porter, of Tradair, was the next to be cross-examined and, reply-ing to questions from BEA's advocate, stated that Tradair had not yet ordered aircraft for the proposed services but were confident that theywould be able to acquire them when necessary. They had not wanted to advance as an argument orders placed in anticipation of a successfuloutcome to their applications. Control of the block bookings would be effected on a system similar to that used by BEA. Agents would acceptblocks of seats", to be released back to Tradair on set dates. The ser- vices would not be advertised as schedules to the public, only to thetourist trade. Mr Marking then began BEA's general objection to the applications.He said that BEA had not sought any accommodation with the applicants; it was for the Board to decide, in such a way as to "furtherthe development of British civil aviation," and added that the Board was not there, as had been suggested, "to give the independents a faircrack of the whip." Seven applicants were making applications for 58 European and 11 domestic routes, but were so little in agreement thatthey had made over 200 objections to one another's applications in "'this greedy struggle for plum routes." At the Guild of Air Pilots and Air Navigators recipients of Meteorological Office awards in London on July 4 were, left, Capt A. L French of BEA and, right, Capt E. H. Jones of BOAC. Presenting the awards (brief cases) was Dr A. C. Best, centre, director of services of the Meteoro- logical Office. The awards are given for outstanding service in providing weather reports The cumulative effect of the applications must be considered, saidMr Marking, and he quoted from Mr Duncan Sandys' speech on the second reading of the Air Transport Licensing Bill, in which he had saidthat the corporations, as the country's main flag carriers, deserved, and would get, the Government's full support and encouragement.That was what Parliament had had in mind when passing the Act. BEA's evidence would stress the great importance of economic factors,which were being clouded by emotional play on the virtues of competi- tion. BEA did not deny that, in general, competition led to better serviceat lower prices, but this theory was not applicable to international civil aviation. If economic damage to BEA resulted from the Board'sdecision, the taxpayer and the national interest would suffer. The deal between Cunard Eagle and British United Airways showedthat what they wanted was not competition but a protected share of someone else's business. The applications represented attempts by ship-owners to extend their operations to the air; they must not be allowed to damage the British flag carrier. International law meant that permission must be sought to fly intoforeign countries, hence bilateral agreements with general provision for "fair and equal opportunity" which had generally been taken to implyequal frequency and capacity. The proportion of the total capacity which BEA could offer was therefore restricted, and was now being used to thefull. A second British operation on any route would destroy the balance. The chairman of the Board here intervened to ask to what extentBEA's case was relying on pool agreements, in view of the dispute over the admission of these agreements as confidential documents. Had theBoard directed that the pooling agreements be produced BEA could have pleaded their confidential nature, but the corporation had put themin voluntarily. Prof Jack suggested that a statement of the general principles of the agreements might be acceptable and asked the views ofcounsel for BUA. Mr Gardiner pointed out that Mr Marking had referred to the poolingagreements in a way which conflicted with the Portuguese bilateral agreement, which provided for more than one foreign airline operatingto Portugal. Mr Marking promised that pools would be referred to in general terms only. He went on to say that a second operator couldnot increase the British quota, as would be shown by the evidence of Sir George Cribbett. In fact, he said, the British share might be dimi-nished by a reduction in the solidity of the British effort. BEA's Domestic Services Mr Marking then spoke of domestic services. These caused no inter-national complications, but competition must be on terms of equal obligation. Because of their mixed status as commercial and welfareundertakings, nationalised undertakings had special responsibilities. BEA's included the operation of some routes which were unprofitable,but the independents had not applied for such routes. The Board must keep in mind the possible effect on the inhabitants of the Highlands andthe Islands of Scotland, remoter districts and the Isle of Man if the licensing of other carriers on good routes made it necessary for BEA towithdraw these unprofitable services. The alternative would be to support them by subsidy, the cost of which would be borne by thetaxpayer. Case law had yet to be built up and. with reference to the decision onthe recent Cunard Eagle Atlantic applications, Mr Marking agreed that diversion alone was not a mandatory reason for refusing a licence, butthere must be some compensating gain. In Europe there was none. Mr Marking invited the Board to note the experience of the USA.Canada, Australia and New Zealand with unrestricted competition on air services. With reference to Section 2(2) (g), BEA had £140m capitalcommitments in jeopardy. The Board must be satisfied that there would be a balance of advantage if the applications were granted. Summing up, Mr Marking said: (1) A second operator would notincrease the British share of the traffic; (2) The gain to the applicants would be at the expense of BEA, causing severe economic damage andloss in power to compete on European routes; (3) Domestic routes could not support a second operator and the licensing of one mightimperil the continuance of unremunerative routes. Therefore the appli- cations were not in the best interest of British civil aviation. [To be continued]
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