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Aviation History
1962
1962 - 0269.PDF
FLIGHT International, 22 February 1962 AIR C SIR BASIL ON BOAC'S COSTS IN a recent message to BOAC's staff, published in the corp oration's house newspaper BO AC News, Sir Basil Smallpeice, managing director, has some firm things to say about costs. "We cannot allow ourselves," he says, "to relax our efforts to keep costs down all round. In fact, there is need to intensify them." As soon as the corporation saw how things were going last summer, he says, recruitment was reduced substantially. By the end of 1961 BO AC were employing 990 fewer people than would have been needed had traffic come up to expectations. Moreover, certain expenditure that would be normally reasonable has had to be ruled out. For example, says Sir Basil, "we have already taken steps to restrict spending on office redecoration and equipment and on other aspects of administration; some capital expenditure and some building developments have been postponed; the buying of consumable materials and stores has been reduced; and so on." Meanwhile, says the corporation's managing director, "I have recently instituted an even tighter control of staff recruitment and all departments have been asked to examine their expenditure critically to see what more can be cut or postponed without im pairing our efficiency or our ability to earn revenue." BEA TIGHTEN THEIR BELTS IF independents are licensed to operate BEA routes, the corpora tion would have to reconsider the continued operation of its social services. This has been one of BEA's arguments before the Air Transport Licensing Board, and it applies particularly to the social services in Scotland. These services were operated at a loss of about £280,000 in the last financial year, or £15 per passenger; and although three years ago the corporation was in favour of a subsidy, by 1960 it had changed its policy. BEA would probably not dissent from the argument that, as a state corporation with a monopoly of domestic services, it has a moral obligation to cross- subsidize social services. The Air Transport Licensing Board recognizes this; but has said that, where competition exists, "there are good arguments why one operator should not be expected to provide unremunerative services by cross-subsidy if similar obligations cannot be put on other operators." Although the Board has not actually said so in as many words, in its report on the big European route hearings (Flight, December 7), it hinted that the right solution might well be for BEA to receive a Government grant. The Board noted that this was a matter of Government policy, but added: "We have not felt it right to allow BEA's operation of these unprofitable services 271 O M M E R C E to influence us ..." In other words, the Board gently discounted these BEA arguments as constituting a valid objection to inde pendent applications. The news last week that BEA have decided to reduce the fre quency on some Scottish social services has to be viewed in this context. As from April 1, the corporation announces that the daily frequency between Glasgow, Edinburgh and Aberdeen will be cut from three to two; services between Aberdeen and the Orkneys will be reduced from thrice to once-daily, and between Glasgow and Inverness from twice to once daily. In terms of capacity, however, the situation will remain much the same, since Heralds and Vis counts are replacing DC-3s. But the Shetland Council of Social Services has protested to BEA about the reduction in frequency, and Lord Douglas has replied that the programme cannot be altered. In addition, BEA are to withdraw completely, as from April 1, their international services to Budapest, Belgrade and Ajaccio, all of which have proved unprofitable. BEA have said that the cuts have been made necessary by the granting of licences to independent airlines allowing them to compete on 22 of BEA's more profitable routes. These ATLB awards are to be the subject of an appeal, and it is possible that, if BEA's appeals are upheld, the cuts will be reconsidered. The first Handley Page Dart Herald 200 for Nordair of Canada was handed over at Radlett on February 13. The handing-over was done by Mr R. S. Sowter, HP sales manager, to Copt K. J. Skrajer of Nordair. The airline's second aircraft is due [to be delivered this month. It has been fitted with long-range fuel tanks for the ferry flight to Canada
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