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Aviation History
1961
1961 - 1170.PDF
272 FLIGHT, 24 August 1961 AIR COMMERCE . . . their contention that an enormous traffic potential for air servicesexisted. He suggested that there was general agreement on the desirability of licensing a second air operator on domestic routesand quoted the opinion expressed by Mr Wheatcroft on the fifth day of the hearing to this effect. He submitted that a secondoperator would be desirable on these routes in view of the fact that there were no bilateral agreements to be considered and of thebeneficial effects of competition in stimulating traffic and promoting efficient operation. Restriction to one operator alone was justifiableonly on routes where the traffic was very thin. Air traffic in the United Kingdom was very backward: accordingto an article in Flight for April 8, I960, it was only one quarter per cent of the nation's passenger traffic. Mr Ashton Hill submittedthat the Board was not required to consider the possibility of material diversion, but only whether the route was capable ofsupporting two operators. The Chairman asked whether Mr Ashton Hill meant that the Act differed in this respect with regard toforeign and domestic operations, Mr Ashton Hill suggested that the Act was deliberately inexplicit so that the Board might be able toformulate policy and permit diversion of traffic if they thought that desirable competition would result on routes with high traffic poten-tial. He cited BEA's own statistics and the annual report for the year 1959-60 in support of his contention that domestic traffic wasincreasing lapidly. and referred particularly to charts introduced by BEA earlier in the hearing to illustrate the enormous expansion forwhich, he said, BEA claimed that they were catering. Mr Marking questioned Mr Ashton Hill about the Bristol survey,suggesting that this had been prepared primarily to sell aeroplanes, and asked why no Bristol spokesman had been called as a witness.Mr Ashton Hill thought that this was because Bristols did not want to associate themselves with one particular operator and risk offend-ing others. After further probing by Mr Marking into the credibility and accuracy of the figures in the Bristol survey a member of theBoard suggested that the margin of error which obviously existed might be more important than the figures. The Objections To CEA's Applications Mr Oswald cross-examined on behalf of the British TransportCommission. Mr Nance, for Starways, next cross-examined Mr Ashton Hill; Starways were objecting to the Liverpool - Londonsector of CEA's proposed services. Asked whether there was any demand that Starways could not meet, Mr Ashton Hill said hethought that competition would be beneficial to the development of the route. Mr Marking proceeded with a statement of BEA's case in generalobjection. Mr Marking's statement consisted mainly of references to theevidence which Mr Milward had given in support of BEA's general objections at the opening of the Meeting, before the internationalapplications were heard. He referred to the profitability of BEA's operations over the last seven years, stressing the fact that theprofits from the more remunerative routes helped to maintain other desirable but uneconomic routes. He said that the Board must con-sider this factor even if they did not approve of cross-subsidization, and referred to Mr Milward's statement that the loss of profits fromgood routes might make it necessary for BEA to withdraw from the unremunerative routes or ask for a subsidy to support them infuture. BEA had built up their services by all the year round operationon many routes and there had been a sudden upsurge of traffic in 1960. Three million pounds had been spent between 1947 and 1958on the development of the domestic trunk routes which had shown a profit in 1959 and 1960. Mr Marking recalled that Mr Milwardhad suggested that it would be stupid, at this stage, to deprive BEA of the fruits of their past investment of effort and money. MrMarking considered the possibility of wasteful duplication of BEA's services to be verv important and, with reference to Mr AshtonHill's opening remarks on material diversion, said it was quite clear that the Board should give particular consideration to this. Finally,Mr Marking commented that Mr Ashton Hill, when quoting Mr Wheatcroft on the desirability of licensing a second operator ondomestic routes, had failed to quote the rest of the opinion which made it clear that this was not considered desirable until suchtime as the traffic would be sufficient to support two operators in parallel. The Board asked Mr Oswald to speak to the general objection bythe British Transport Commission. The Board then heard the evi- dence of the representative of the Liverpool City Council, MrHolmes, who said that he had the full authority of the Liverpool City Council to speak in support of the CEA applications. MrHolmes was cross-examined by Mr Marking and by Mr Oswald. Mr Nance, of Starways, also questioned Mr Holmes about theadequacy of the existing air service and suggested that his com- pany's application for increased frequency on the Liverpool -London service, would, if granted, provide a satisfactory solution. Mr Holmes agreed that Starways could probably satisfy the demand,but without the incentive towards efficiency which competition would provide. Mr Holmes called as his witness Mr Andrews,manager of Liverpool Airport. He believed that Starways had carried 26,000 passengers between London and Liverpool in 1960;in the year ended June 8, 1961, they had carried 39,600, an indica- tion of the startling growth of traffic on this route. Similarlythough to a lesser degree, the Liverpool - Belfast service failed to satisfy the demand; the service was inadequate and did not operateat the best times. The Board proceeded with the hearing of Cunard Eagle's threeapplications which were being dealt with as a group. Mr Ashton Hill introduced Cunard Eagle document CEA.17 and quoted fromit statistics for trafbc on the three routes. Mr Marking began his cross-examination by suggesting that BEA might modify theirobjection to application A.I 120 (Gatwick - Liverpool - Isle of Man - Belfast) if they were assured that there would be no fare undercutand the intermediate stops were mandatory—would CEA accept the latter condition? Mr Ashton Hill said that CEA wanted the stopsto be optional while they were building up their services. The first BEA evidence in objection was given by Mr Gilbert,who explained fhe statistical documents which had been put in by BEA. BEA's next witness was Mr Grumbridge. who agreed withMr Marking that the introduction of low fare rates would probably be the last step that BEA would be able to take to generate a largeamount of extra traffic. Mr. Grumbridge gave details of the BEA capacity London - Belfast in the summer and winter seasons of thecurrent year—55 per cent more than last year in the summer and 80 per cent more in the winter—and confirmed that the capacityoffered was related to the fares proposed. Capacity had been increased 20, 12 and 37 per cent in the pre-vious three years and high load factors had been maintained, the traffic increases keeping pace with the increased capacity. BEAexpected traffic increases of 35, 27. 20. 18 and 18 per cent in the years 1961-2 to 1965-6. If the traffic increases were up to expecta-tions BEA would be able to handle all the traffic; there was no existing or potential need or demand for the proposed CEA service.The service provided by BEA was adequate and tariffs had been developed by a progressive differential fares policy designed toencourage traffic at off-peak times. The rate per mile London - Belfast averaged 4.4d for all classes compared with an average forall European airlines of 6.95d, 5.1 d on US domestic routes, and 4.5d on Australian domestic services. The BEA London - Belfastrate was therefore the lowest ottered anywhere in the world. In re-examination Mr MaiKing asked whether the capacity in-creases planned by BEA would cover any existing inadequacy; Mr Grumbridge confirmed that they would. He also agreed, withreference to the Northern Ireland Advisory Committee's support of CEA and their suggestion that competition might lead to lowerfares, that the evidence he had given suggested that a second operator would increase costs and lead to fares being raised. Mr Grumbridge then made way for Mr Gilbert, whom MrAshtqn Hill wished to cross-examine about the statistics he had compiled for BEA. This cross-examination followed very closelyrhe lines of Mr Ashton Hill's earlier efforts to upset BEA's figures produced in connection with Continental applications. The nextstage was 'he presentation of the evidence for the objection by the British Transport Commission. The evidence in objection by Starways was next presented, thewitness being Mr Wilson. Examined by Mr Johnson, commercial manager of Starways. Mr Wilson outlined the history of the com-pany's Liverpool - London service. This had been started in 1956 (after BEA had been unsuccessfully approached by Liverpoolinterests) and had operated with low load factors and no profits until 1958. Starways perseverance and development of the route,on which they had offered steadily increasing capacity, had then begun to produce profits. Starways were awaiting a decision on anapplication they had made to the Board for unrestricted frequency on this seivice and could meet any foreseeable demands. TheViscount at present used on the route was under-utilized and could cover three times the flying hours represented by the permittedfrequency. The licence at present covered 20 unit flights per week but Starways could easily provide the capacity of 250 seats per daysuggested by Mr Andrews and could, in fact, cover 290. If Star- ways were granted the increased frequencies for which they hadapplied they would implement them at once. Mr Ashtqn Hill cross-examined for CEA, followed by MrBarron of Silver City, who said that their objection was concerned with the Isle of Man - Belfast sectors. Starways Present Their Case Mr Wilson next presented the case for Starways' own applica-tions, numbers A.1118 and A.1117, for services Chester - Isle of Man and Chester - Belfast. These two applications were similar, he said,except that the Isle of Man service would cater principally for holiday traffic while the Belfast traffic would be both holiday andbusiness. Starways proposed to rely on the evidence which had been given in respect of Hawarden (Chester) in the Dublin applica-tion heard earlier. The four remaining applications from Cunard Eagle Airways werethen heard. These were A.1048 (London - Edinburgh). A.1049 (London - Renfrew), A.1050 (London - Manchester) and A.1047(London - Birmingham). Mr Ashton Hill submitted CEA's tables of actual traffic and estimates for the four routes and dealt withthem one by one. Mr Marking began his cross-examination by en- quiring whether CEA were calling other witnesses, and asking whatevidence of need had been produced; only on the London - Manchester route had there been a suggestion that the service tothe public might be improved—no other advantages had been men- tioned. Mr Marking asked why CEA should be granted the routes.Mr Ashton Hill suggested that competition and improved timings would both be beneficial to the public. Mr Marking asked in whatway, with specific reference to these routes, competition could be beneficial. Mr Ashton Hill suggested that BEA might have dis-satisfied customers, improved cabin services might be offered and there would be wider timings and an alternative operator in theevent of a BEA breakdown. Asked what timings CEA proposed Mr Ashton Hill said that these would depend on BEA timings and,when pressed to be more specific, gave no further details. Mr Oswald then cross-examined on behalf of the British Trans-port Commission, the Scottish Omnibus Co., and West Scottish Motor Transport. The first objection to be presented was BEA's and their only
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