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Aviation History
1961
1961 - 1417.PDF
FLIGHT, 28 September 1961 521 CHANGES ON THE US HORIZON FOR those who shape Britain's air transport policies, perhapsthe most interesting passages in the Project Horizon report,*presented to President Kennedy by the FAA (Flight last week) relate to the Bermuda Agreement. Without mentioning anynames, the report concludes a 16-page review of US air transport relationships with other countries with the words: "The ever-increasing numbers of foreign carriers attempting to secure foot- holds in US markets makes it clear that in the future the US mustbe more sensitive to the relative economic benefits resulting from route exchanges. This involves a more careful trading of routes, aswell as better policing of the capacity provisions of our bilateral agreements. Perhaps it is time to raise the question as to whethera bilateral exchange of routes, and hence traffic rights, under Bermuda-type principles any longer affords a valid basis forinternational air carrier negotiations." This of course is basically the view expressed by the CAB,whose demand to foreign carriers for traffic statistics has, according to the report, been "unsuccessfully contested" by foreign carriers.But now a firm recommendation for a change in policy is on the desk of the President. Of particular interest are a series of tablesshowing the declining percentage of US traffic carried in relation to that carried by other countries; Table 5 shows, carrier by carrier,the number of passengers carried to the US by foreign airlines over the decade 1950-60. Equally significant are hints of a possible major change in thetraditional US outlook on pooling. "The US as a matter of policy should continue to rely mainly on the creative power of competi-tion," says the report. "However, the proliferation of pools among foreign airlines makes it necessary to search for effective ways todeal with the resulting shifts in competitive relationships. For example, we might be prepared to recognize the existence of apool among foreign carriers operating their services to the United States. On the other hand, when a small country suggests poolingof its services with that of a US competitor, we might seek first a substitute arrangement which would support that country's opera- * The Report of Task Force on National Aviation Goals, Project Hori- zon, September 1961, The White House, Washington DC. Price not quoted. tion. In some other circumstances, participation of US carriers inpools might be permitted on a case-by-case basis and upon a show- ing that the total effect would be in the public interest." The report contains figures and statistics that sum up theproblems of present-day US air transport: Boeing, Douglas, Convair and Lockheed have so far written off more than S800min their jet and turboprop airliner programmes; the 58m passengers carried by US scheduled airlines in 1960 still represents no morethan about 10-15 per cent of the US population; the return on total investment was only 2.86 per cent for the US domestic trunks lastyear, compared with a desirable rate of return postulated by the CAB in its General Passenger Fare Investigation of 10.5 per cent.The ratio of debt to net equity (stockholder ownership in the company) for the eleven domestic trunks. Pan Am and Panagraaveraged 1.5 to 1 last year, which contrasts with the more usual debt-equity ratio of about 0.5 to 1 during the 1950s. "Earningpower—past and present—is the fulcrum upon which the financial fortunes of the airlines rest." declares the report. The CAB isurged to give "prompt and sympathetic attention" to merger proposals necessitated by multiple competition. The report alsourges a refusal to certificate new competition except where clearly justified on economic grounds. The CAB, it is considered, has notbeen successful in solving the problems of competitive balance between the US domestic carriers; these problems, says the report,"were inherited and then compounded by lack of thoughtful planning." The point is also made that much of the excess capacityproblem now facing US carriers may stem from the fact that levels of competition which were perhaps economical with smallerpiston-engined equipment cannot be profitably maintained with large jets. By this reasoning the supersonic airliner becomes moreclosely equated with monopoly in air transport. The report is adamant about the need for a more elaboratepromotional fare structure to reduce off-peak losses (BEA's pro- motional fares, it will be recalled, have been of great interest toUS carriers). The study concludes that a subsidy for all-cargo carriers would not be justified, partly because it would divert trafficwhich surface carriers could carry more economically and for which they are vigorously competing. SAFETY AND PUBLIC ACCOUNTABILITY ONLY rarely are British air transport operators brought beforea magistrate for misdemeanours. Such is English law,standing as it does above Government, that the Ministry of Avia- tion has to be absolutely sure of a case before handing it over tothe Director of Public Prosecutions, who even then may decide that the evidence is not strong enough to justify legal action. TheMinistry's safety people, notwithstanding their respect for the independence of the judiciary, must often feel frustrated by anundoubted weighting of the scales of justice in favour of the un- scrupulous operators, few though they may be, who persistentlysail close to the wind of safety and get away with it. The difficulty of punishing offenders, notwithstanding theMinister's power to revoke licences, means that the administration of safety is largely a private matter between the Ministry and theoperators. Offenders may receive stiff warnings from the Ministry but their offences are only rarely made public. Safety in air transport does not sort well with secrecy, for tworeasons: firstly, public accountability is a deterrent to the bad operator; secondly, safety experience must be shared as widely aspossible throughout the air transport industry. No one really disputes that safety and secrecy do not go together; the problemalways is that the rights of the individual must be protected. Unfortunately, so weighted is the system in favour of the sharpoperator that, all too frequently, the wrongs or mistakes of a company or of an individual are protected too. For example, nearly a year ago a serious accident occurred to aBritish aircraft in which, fortunately, there was no loss of life. It is unbelievable that the causes and circumstances of this accidentwere not established within days; yet, nearly a year later, the Ministry declines to say anything other than that "the investigationis not yet complete." If an individual is to be blamed for an accident, then of course the Ministry must allow him to state hiscase. If in this case an individual was at fault, his case must surely by now have been heard. But it is extremely unlikely that the causesand circumstances of the accident will ever be published; informa- tion which might enhance the safety of air transport, which mightprevent a recurrence of a similar accident, is for ever locked away in a Ministry filing cabinet. Again, when two jets nearly collided near London Airport lastFebruary, the Ministry declined to reveal the full causes and cir- Two of BOAC's Britannia 312s are now flying with British United, under a 33-month lease-purchase arrangement first discussed earlier this year. One is seen here at BOACs London Heathrow base before deliv- ery. The aircraft will be used for trooping flights, replacing British United's two Britannia 317s which have been refurbished for the operation, in place of Viscounts, of the Safari routes to Africa in pool with BO AC. See also page 519
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