FlightGlobal.com
Home
Premium
Archive
Video
Images
Forum
Atlas
Blogs
Jobs
Shop
RSS
Email Newsletters
You are in:
Home
Aviation History
1961
1961 - 1691.PDF
Passenger Miles FLIGHT, 23 November 1961 AIR COMMERCE... Two illustrations from Lord Douglas's paper: left, corre- lation between percentage of traffic on intercontinental routes and European laod factor, I960. Right, intra-European passenger traffic by carrier, 1955-60 795 100* 60% I « ' 2O5fc ,Aer BEA Jngus giber '~Sw 10 ssairAlitol G* c r Fra ice ena° iKLK. to SO 3O *0 50 «O 7O BO 90 100 Percentage ef traffic on Intercontinental (long-haul) routes 4OO 2OO 1955 1956 1957 1958 1959 196O Why is the load factor of so many European airlines uneconomic-ally low ? The answer is (a) because the airlines concerned are look- ing at their European routes as feeder services for long haul trafficand b) because they appear to base their economic outlook on spurious arguments about the marginal costs of operations. Fig. 3supports these contentions; airlines which get the majority of their traffic from long haul operations are the ones which operate theirEuropean services at low load factors. The argument is that the marginal cost of operating an additional service will be more thancovered if a few extra long haul passengers are attracted by that additional service. An extra service can then be justified at anextremely low load factor, thus reducing the average load factor. There are two possible fallacies inherent in this argument. The firstis that some of the so called additional passengers may well have travelled anyway. The second is that the argument that additionalcosts specifically incurred as a result of operating a particular service are only a very small percentage of total airline costs is ashort-term view. Men and materials can be redeployed to other activities. And the scope for such redeployment increases when wetake a long term view in airline planning. Hence marginal costs tend to get closer to average costs the longer ahead we look. Intergovernmental air agreements—bilaterals—have undoubtedlycaused more frustration for airline managements than any other problem. Whatever we think about them these national policyfactors are part of the facts of life of the air transport business. I can see no useful purpose in arguments, like those we heardrecently before the Air Transport Licensing Board, which said in effect "Wouldn't it be nice for the airlines if the world were adifferent place." It is the tacit adoption of a philosophy of minimizing the adverseeffects of economic and political nationalism in air transport which explains the degree of co-operation which the airline industry hasachieved. Then there is the general movement in Europe towards closer political and economic integration. These moves towardsEuropean integration may change the views of individual nations about protecting the interest of their own airlines. Anotherinfluence is that the whole airline industry throughout the world is faced by new problems caused by the jet revolution. As a conse-quence, economic pressures towards technical and commercial co-operation are particularly strong at the present time. [To be concluded] THE INDEPENDENTS DINE USUALLY at the annual dinner of the British Independent AirTransport Association the traditional guest of honour, the Minister of Aviation, drops the first public hint about some majornew policy. In 1959, Mr Sandys hinted at the desirability of inde- pendent mergers; the year before Mr Watkinson dropped a hintabout the need for licensing. Last year Mr Thorneycroft made his famous remark about airports not being run "as a branch of theWelfare State"; this year he chose to say little—except, signi- ficantly, that the "future [of the independents] will lie with thestrong." In the context in which he spoke this was taken to mean more mergers, though the manner in which these would be made,he told his hosts, "are for you to decide." Mr Clive Hunting, president of BIATA. paid tribute to theAir Transport Licensing Board. Decisions not lightly taken had been arrived at—"not always as quickly as some of us might like,but at least with a forthright clarity that we all applaud ... in all sincerity we say: You're all right, Jack." He agreed wholeheartedlythat the board should consider the financial resources of appli- cants, but it would not be in our interests if this became a way ofinadvertently letting in foreign competitors. He felt he would be shirking his responsibility if he did not touch on the "difficult and delicate subject of safety and aircraft acci-dents." He thought that the three aircraft belonging to BIATA members that had suffered fatal crashes during the past threesummers had not been an accident rate worse than the world average, but that was not good enough. He refuted categoricallyany implication that older aircraft were unsafe. He could not rule out the possibility of further mergers amongmembers of BIATA, nor could he rule out the possibility of some members finding it impossible to carry on. But it was surely healthythat new aggressive managements rose to take up the running and the weaker give up the race. He hoped that this would not bethought a ruthlessly unsentimental outlook. Air transport was a hard task-master, gobbling up capital in re-equipment programmes,and unforgiving of commercial mistakes. Finally, Mr Hunting called for a closer co-operation betweenBIATA and the corporations. The time had come when it might be sensible to put existing experience of working together on to a morefirm footing. He was not talking of anything like a Chamber of British Aviation, though he had little doubt that this would come(quicker than many realized); but "I believe it might commend itself to all parties if we were to meet at infrequent but regularintervals purely as airline operators so that we can then speak as one—perhaps even producing a united British front at IATA"[laughter]. He noted that for the first time the BIATA report included ordersfor jets and perhaps in the foreseeable future a BIATA president might draw attention to the first orders for supersonic transports.For his part that date could not come too slowly. Mr Hunting concluded with a tribute to the work of BlATA's secretary for thelast ten years, Mr A. M. Blakemorc, who has since taken up an appointment with British United Airways. His best wishes went tohis successor, Mr Dick Cleaver. This is a DC-4 of Syrian Arab Airways, the new government airline established in Damascus following the revocation, on October 16, of Syria's association with UAA. Also in the fleet are two DC-6s, another DC-4 and a DC-3
Sign up to
Flight Digital Magazine
Flight Print Magazine
Airline Business Magazine
E-newsletters
RSS
Events
