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Aviation History
1961
1961 - 1493.PDF
FLIGHT, 12 October 1961 597 pointed out that traffic forecasts for seven years were in dispute and thatso far only 8 per cent of the American population had travelled abroad while currency restrictions had prevented U K residents visiting Americain any numbers. He suggested that next year might reverse the recent trend and Sir Basil said he thought that would be a wonderful thing. Mr Fisher began his short re-examination of his witness by goingover the "cleaning" processes applied by BOAC to traffic figures to establish that the forecast for 1960-61 had borne a reasonable relationto the actual traffic achieved and formed a sound basis for forecasting future probabilities. He also established that the more promisingfigures for North Atlantic traffic, which had been quoted by Mr Gardiner and agreed by Sir Basil, included traffic to all destinations inNorth America and that the figures for January to March 1961 had covered certain services not operated in 1960. Questioned by Mr Fisherabout orders placed by independents for new British aircraft Sir Basil did not think that an independent company like Cunard Eagle wouldhave the resources to place a development order, as had BOAC, for an aircraft such as the VC10 or Super VC10. Cunard Eagle's Case Mr Gardiner then began his presentation of the case for CunardEagle Airways. He said that the British Overseas Airways Act of 1939 and the Civil Aviation Act of 1946—to which Mr Fisher had referred—had both been repealed by the Air Corporations Act 1949 on which he would base his initial argument. Before the ATLB Mr Fisher andSir Basil Smallpeice had strenuously maintained that BOAC had a duty to operate certain routes. Under Section 3 of the Act of 1949they had powers to operate; the only duly laid on them by Section 3(3)(i), was to exercise their powers to the best of their ability and developservices to the best advantage and at reasonable charges. The Board had therefore been quite right to hold that BOAC had no duty to flyany particular route. Referring to the play which he said had been made before the Boardon Mr Duncan Sandys' statement that he did not intend to allow others to reap where the corporations had sown, Mr Gardiner said that theMinister had found himself faced with the necessity to honour an elec- tion pledge to set up a body to adjudicate on licence applications, beforewhom the independents would have the same rights as the corporations. This was necessary because the independents could not continue tosurvive on scraps, as the Minister had explained in outlining the pro- visions of the Bill, stating that it was intended to permit them somesecurity in forward planning and to allow them to continue the valuable service they had rendered to British civil aviation in the past. In short,the Minister had reassured the corporations while seeking to honour the election pledge to the independents and, having spoken fair to bothparties had left the Board to sort things out. The only real direction given to the Board was in Section 1(1) of the 1960 Act—that it shouldfurther the development of British Civil Aviation. Cunard Eagle, continued Mr Gardiner, were the obvious choice for atrans-Atlantic licence and they had been granted one in such restricted terms that BOAC would continue with a complete north Atlanticmonopoly except for one flight daily to the east coast of America, The effect of this licence would be that, in six years" time, CunardEagle would have the right to compete for less than a quarter of the increase in traffic on the route over the period. If. after 15 years ofcoddling and subsidies. BOAC could not face a 25 per cent competitor for traffic which did not yet exist, they could not be much good. MrGardiner was about to deal with BOAC's points in objection when Mr Fisher intervened to say that BOAC would not persist in the objectionin so far as it applied to Manchester and Prestwick and to points other than New York in the USA. Mr Gardiner resumed with a reference to what he said had beendisrespectfully referred to as the gramophone record of the corporations. This, he said, went "we have entered into commitments to buy all theaeroplanes required to carry all the traffic which we envisage on this route for so many years and nobody else should therefore be allowed onit." The Board's problem was that if the record was right no licence could ever be granted. It was one thing to protect existing traffic but totake account of all past and future aircraft orders would mean protecting all future traffic for ever. The orders for VClO's on which BOAC wererelying were not based on the estimates which had been produced but on estimates for all routes. The licence granted was equivalent to twoBoeings and that was all that should concern the Commissioner. Cunard Eagle were not relying on the order they had placed in March forBoeing 707s. Yet BOAC in the middle of the hearing by the Board, had ordered three additional Boeings and were thus in exactly the same posi-tion as Cunard Eagle. The f 100m orders for VClOs was irrelevant. Mr Gardiner quoted from the transcript of the hearing to show thatcross-examination of Sir Basil Smallpeice at that time, and his answers to questions from the Board, had shown that, although BOAC hadmaintained that the three Boeings were not ordered for the Atlantic, their aircraft were pooled for all routes. Further questions from thetranscript showed that BOAC expected to operate 600 Atlantic charter flights in the current year in addition to their scheduled services. TheBoard. Mr Gardiner submitted, were in error in taking BOAC's com- mitments for aircraft procurement into consideration, but right to saythat they were not grounds for refusing a licence. Turning to "the rather tedious subject of intergovernmental agree-ments," Mr Gardiner said that Cunard Eagle contended these were not a matter for the Board's consideration as they had been intentionallyomitted from Section 2(2) of the Act of 1960 and reserved to the Minister under Section 2(3). In this case the Minister had not directedthe Board to refuse a licence and there the matter should end. How- ever, if the Board were to consider this aspect of the objection, theirdecision had been right. The evidence of Mr Beckman (US Attorney to Cunard Eagle) andextracts quoted from the direction of the US Secretary of State to the Civil Aeronautics Board on the designation of a second British opera-tor on the Bermuda-Bahamas route, made it clear that the US Govern- ment was obliged to permit multiple designation of British operatorsuntil such time as the agreement with the United Kingdom was de- nounced or revised. Mr Gardiner opened the fourth day of the hearing by revertingbriefly to the question of financial commitments. He suggested that it might clarify the issue if the Commissioner were to assume that BOAChad pleaded some quite astronomical commitment—say £500m—on air- craft for the Canada route. If the Board had wrongly understood thisto be only £5m it would be irrelevant as the Board had refused a licence on that route. The only aircraft relevant to the present hearing werethose of capacity equivalent to the licence issued—two Boeing 707s. Both BOAC and Cunard Eagle had. quite reasonably, taken the riskof ordering aircraft while the outcome of application A.1000 was unknown; Cunard Eagle were not relying on that commitment, norshould BOAC. Mr Gardiner then reverted to bilateral agreements, and suggested thatthe evidence of both Mr Ashton Hill and Mr Beckman had indicated that it was most unlikely either that the CAB would refuse CunardEagle a permit, or that a third American operator would be designated on the route. Even Sir Basil Smallpeice's evidence, Mr Gardinersuggested, had indicated that the CAB would not recommend refusal of a permit, that the US President would not refuse one. that there waslittle likelihood of a third carrier being designated and that there was no control of capacity under the Bermuda agreement. Mr Gardinersubmitted that the Board should not have ruled on this matter but. in any case, had reached their decision after hearing all the evidence and,as their findings showed, after consulting with the Minister; what, therefore, was the point of an appeal to the Minister against the decision? Here the Commissioner interposed the comment that the situation wasreminiscent of W. S. Gilbert in that BOAC seemed to be appealing to the Minister, in his judicial capacity, to reverse a decision taken bythe Board after receiving advice from the Minister in his administrative capacity! In any case the Board's decision was in Cunard Eagle'sfavour so why, in effect, was Counsel for Cunard Eagle making such a fuss about it ? Mr Gardiner pointed out that his arguments were directedagainst the appeal by BOAC from the Board's decision; the decision was. he maintained, wrongly given but right in substance. Dealing next withBOAC's claim that no need for the service had been shown, Mr Gardiner suggested that this was a route on which the need was manifest. Infive years' time there would be one million additional passengers for whom no aircraft at present existed. If. in showing need, you had toconsider additional capacity which BOAC might provide, you were back to the "gramophone record." Need had to be demonstratedonly if there was no existing service or if the traffic was stationary. Will Diversions be Material ? On material diversion, Mr Gardiner said Cunard Eagle concededthat there would be diversion but did not agree with the Board that it would be material. Mr Ashton Hill had not agreed, as suggested byMr Fisher, that proof of no material diversion was a precedent require- ment to the granting of a licence and Cunard Eagle maintained that thiswas not the case. While Cunard Eagle had claimed only that no material number of passengers would be diverted from BOAC, Sir Basil Small-peice had claimed that all Cunard Eagle's passengers would come from that source; it was for the Board to decide between the claims. Onthe BOAC claim of "wasteful duplication" Mr Gardiner submitted that duplication would only be wasteful if it meant the operatorsrunning their services at a loss; where there was traffic to support more than one the duplication would not be wasteful. On the subject of the so-called "British share" of traffic, it was nottrue that Mr Ashton Hill had agreed this was 43 per cent of the total, although he had suggested this as the percentage likely to be carriedby BOAC in demonstrating how much would remain. BOAC had never approached 50 per cent of the British/American traffic and theAmericans would not have a leg to stand on if they objected to the designation of a second British carrier. Mr Gardiner maintained thatthe true traffic figures showed a sharp increase over the last two years. The Board had to decide whether traffic was likely to decline, staysteady or increase, and. if it was likely to increase, by how much". There was little final difference between BOAC's estimate of an aver- Lord Douglas, BEA chairman, lays the foundation stone for the corpora- tion's new £3.5m London Air Terminal; on the left is Mr. E. R. Hale, chairman of Holland & Hannen and Cubitts (Great Britain) Ltd, builders of the terminal. There will be a basement garage for 140 cars
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