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Aviation History
1961
1961 - 1028.PDF
130 AIR COMMERCE . . . FLIGHT, 27 July 1961 was contrary to the evidence of the last ten years, said that he thoughtthat BUA, being based in the UK, would probably operate on a similar pattern of routes and timings to those of BEA. BUA, with its head-quarters in the UK, would probably concentrate even more than BEA on the UK market, rather than on traffic originating abroad. Therefore,quite apart from any consideration of bilateral agreements. BUA would be more likely to divert traffic from BEA than from other carriers. Mr Gardiner suggested that BUA would be very willing to co-operatewith BEA in arranging that the two daily flights of BUA to Paris, for instance, would be fitted into ih; pattern of 20 flights per day operatedby BEA, or the 40 daily flights operated jointly by BEA and Air France on the Paris route. Mr Gilbert said that, in brutal truth, BEA would beoperating only seven Vanguards daily to Paris next winter. He added that he did not believe the BUA would create any new traffic unless theycould offer the public some new facility or more of an existing but inadequate one, and there had been no evidence that they would beable to do so. At peak periods, extra flights could be added to schedules by BEA, but the effect of BUA would only be to reduce the load factorsin the troughs. Mr Gardiner suggested that the independents had always created newdemands by going after traffic in which BEA was not interested. Mr Gilbert replied that, as far as ITX flights and air trooping were con-cerned, it was well known that Government control of BEA's aircraft procurement had always prevented the corporation having aircraftavailable for work of this kind. Mr Gardiner asked whether Mr Gilbert was aware that BUA had alarge sum of money invested in plans to build a hotel on the island of Madeira, and were considering undertaking further expenditure toprovide a modern ferry service to Funchal? Mr Gilbert said that he had not been aware of these plans, but BEA had their own plans forimproving amenities, including the provision of a helicopter service. Initial Load Factors Mr Gardiner made another brief attack on BEA. 61, asking why a60 per cent load factor had been used in estimating the diversion which would result from BUA's services; he commented that no one outsidea lunatic asylum would expect 60 per cent within the first three years. He then said that he would leave this subject until BEA had producedthe revised figures and estimates. He asked that these should include 1965 estimates for the routes applied for by BUA. The Board pointedout that the only BEA figures they had for estimated growth of traffic did not cover all traffic, but only BEA's, nor did they cover the fullyear. Mr Gardiner asked that the new figures should be based on the calendar year, and on passenger-mile, not passenger, totals to permitcomparison with BUA's figures. Mr Ashton Hill, for Cunard Eagle, asked that the new figures fromBEA should show routes separately. He then started his cross-examina- tion of Mr Gilbert. He asked the witness whether his suggestion thatBUA's traffic would come principally from the UK applied also to Cunard Eagle. Mr Gilbert said that it did. Mr Ashton Hill then askedMr Gilbert to comment on the chart (CEA. 4) in which Cunard Eagle had projected the BEA chart No 8 (showing the proportions of Euro-pean traffic carried by BEA and other operators) up to 1965. and had taken Cunard Eagle's estimated three per cent of the traffic from thecolumn representing the other operators instead of from BEA. Mr Gilbert said that, apart from the BEA figures quoted, he disagreed withit entirely. It did not cover all the applications, only those from Cunard Eagle; also, he did not agree that Cunard Eagle would take their trafficfrom other operators. He could not elaborate on this point without the promised details of Cunard Eagle's operating plans. Mr Porter cross-examined Mr Gilbert on behalf of Tradair. Referringto Mr Gilbert's reply to Mr Gardiner, in which he said that the indepen- dents would not create any new traffic unless they could offer the publicsome new facility, or more of an existing but inadequate facility. Mr Porter asked whether Mr Gilbert would agree that BEA had not filledthe demand for block booking facilities. Mr Gilbert said he did not agree; BEA had had numbers of blocks of seats returned by agents towhom they had been allocated. Mr Porter suggested that either the seats had been allocated in blocks too small to be of practical value, orthey had been allocated on days which could not be fitted in with inclu- sive tour arrangements. Mr Gilbert disagreed. Mr Marking re-examined his witness.Asked to explain his statement that the independents might increase RUA's telling comparison between European and N. Atlantic fare levels \ 1 •sf— -1 1 m inri • -if -I i_ JL J ii i i_ EURO L. i i i i i NORTH ATLANTIC 1 1 1 1 1 1 1 1 60% £ 50*(> t 3O"/o \ ,0, 10% 0 NORTH PASSENG AIR TRAP ATLANTIC ER TPA , ' AIR FFIC _~ ' .- • - — \I .. —-». 1951/52 1952/55 1953/54 1954/55 1955/56 1956/57 1957/58 1958/59 1959/60 1960/61 North Atlantic and European air penetration of the market: a BUA chart traffic by providing new facilities or more of existing but inadequatefacilities, Mr Gilbert said that there could be occasions, on peak days of peak traffic periods, when another operator might accommodatetraffic which could not otherwise be carried. He thought that this could only be done most uneconomically, however. Mr Marking produced acopy of Flight for February 10, 1961, and, with reference to the use of a 60 per cent load factor in estimating the diversion which would beproduced by BUA, asked whether Mr Gilbert had read a letter written to the Editor by Mr Laker. Counsel for BUA protested that this wasmost improper; this copy of Flight had not been produced in evidence, nor had Mr Laker been questioned about his letter when he was cross-examined by Mr Marking. Mr Marking was allowed to read an excerpt from which it appeared that Mr Laker had himself used a load factor of60 per cent in estimating the traffic which BUA might carry. Mr Mark- ing askec! whether Mr Gilbert considered that this justified the use byBEA of the same load factor in estimating BUA's future traffic. Mr Gilbert said he thought that it did. Mr P. Brooks, fleet planning manager, BEA, formerly assistant to thechief executive and to the chairman, was the next BEA witness. Asked by Mr Marking to explain how diversion of traffic would cause under-employment of aircraft and consequent redundancies in aircraft orders, he introduced document BEA. 62, a chart of BEA actual and forecasttraffic from 1948 to 1968. The rate of growth on which this chart was based decreased from 17 per cent over the next four years to 11 percent in 1966. These estimates were those used, after scrutiny by the Ministry, as a basis for ordering aircraft. Accuracy of BEA's Forecasts As an example of their accuracy in the past, Mr Brooks mentionedthat estimates prepared in 1957 to justify ordering new jet aircraft had given load ton-mile figures for 1960 which had proved to be onlyone per cent high, and capacity ton-mile figures which had proved to be exactly right. Mr Brooks introduced document BEA. 63, a chart on which wereplotted BEA's passenger miles up to 1965-66, based on three assump- tions: (1) That BEA's planned developments continued unchanged;(2) that BEA's planned new routes were not approved; and (3) that all the applications from independents for scheduled services were approved. The difference between (1) and (2) was equivalent to three Tridents,and the gap between (2) and (3) was equivalent to a further 13 Tridents. The total difference, equivalent to 16 Tridents, would represent severedamage to BEA's financial results brought about by under-utilization of aircraft, the BEA maintenance base and other assets. Mr Brooks was questioned about Mr Laker's examination by BUAcounsel on operating costs, and the suggestion that BUA operated Viscounts more economically than BEA (£192 per hour against £232).Witness said that the comparison was highly misleading because: (1) BEA Viscounts were mixed-class aircraft—this added £5 per hour tothe operating cost; (2) BEA's costs included interest on capital at £8 per hour; (3) BEA's operations on short-haul routes added about £10 perhour over BUA's longer haul route costs. In addition, the cost of BEA's operation of Viscount 806s in 1960-61 had been only £205 perhour. Adjustment of this figure in the same way gave a lower cost than BUA's £192. Mr Laker had suggested that new types would reducespecific costs. BEA's costs would be similarly reduced; the Trident would cost no more than the BAC One-Eleven on routes up to 600miles, and less on longer routes. On a cost per seat-mile basis, the Vanguard was 12-17 per cent cheaper than these jets. Mr Brooks later volunteered that he had been mistaken in assumingthat BUA's Viscount costs did not include interest, but he confirmed that the evidence he had given showed there was no significant differ-ence between the operating costs of BEA and BUA. The Trident would be comparable to the BAC One-Eleven, and the Vanguard to bothaircraft. Mr Gardiner, cross-examining on behalf of BUA, questioned MrBrooks about the method used by BEA to compute the landing cost factor in working out operating costs and pointed out that BUA'sfigure had been calculated on the basis of a stage distance of 400 miles. He suggested that BEA's comparison was wrong on three counts: theinclusion (or exclusion) of interest, stage length and handling costs, in which respect the differential was excessive, if admissible at all.Witness did not agree. Counsel for BUA went on to suggest that the reduced cost of operating BEA's Viscounts in 1960-61 provided a goodreason to reduce fares. Witness said that would be the case if the whole fleet were Viscount 806s. Mr Gardiner asked further questions about thecost of operating Tridents and Vanguards, claimed to be cheaper than Viscounts, and asked why BEA supported a five per cent "across theboard" fare increase. Witness said this was not the general policy of BEA. [To be continued. 1957 1958 1959 1960 1961 MIN EUROPEAN TOURIST FARE (YEAR-ROUND) MIN EUROPEAN AVAILABLE FARE (TOURIST AND EXCURSION) 1962 1965
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