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Aviation History
1962
1962 - 0965.PDF
963 FLIGHT International, 21 June 1962 agreement in "major respects" with the CAB transatlantic report though it does not go into detail; TWA has endorsed the CAB's "area concept," although it objects to certain of the proposed changes in the points served.) The power of the CAB does not stultify airline initiative: far from it. But this power has been conferred by Congress in recog nition of the fact that airline competition must be firmly regulated if competition is not to be abused and its advantages defeated. The power given to the CAB also recognizes the fact that airlines are not always the best advocates of the public interest. The follow ing excerpts from the Transatlantic Route Renewal Case illustrate this point: "This critical competitive situation denotes an urgency for action and suggests that Board guidance and leadership would be desirable . . . Our own on-balance analysis raises a question in our minds as to whether point-to-point competition between US flag carriers in transatlantic services should be eliminated, and the second US-flag-round-the-world service terminated . . . Although there is a growing round-the-world market in terms of passengers and revenue it nonetheless is doubtful whether two such US-flag services can each operate with sufficient frequency to effectively penetrate this highly competitive market. BOAC, Qantas, the Commonwealth pool carriers, and Air France/TAI may provide enough competition for Pan American. These foreign flag carriers are equally as able to provide single US carrier with the necessary competitive spur in this market as they are in the London, Paris, Rome and Frankfurt markets . . . "Our carriers' relative participation has now hit an all-time low . . . In 1961 our carriers moved only 37 per cent of the total passengers, a three per cent decrease from what they carried in 1959 and 1960. TWA's international operation had a net loss of almost S3m and its operations over the past 11 years have resulted in a net loss after interest of $475,000 and an average return on invest ment of 2.17 per cent. Although Pan American has operated pro fitably during this 1951-1961 period its rate of return has averaged only 6.44 per cent. For the year ended September 30, 1961, Pan American showed only ?1.8m profit, a decided drop from 1959 and 1960 . . . The basic route pattern may now be assessed with the results of 16 years of aggressive competitive all-purpose carrier operations." Britain's Air Transport Licensing Board does the best it can with the powers that it has; all real power, as everyone knows, is vested in the Minister. Whilst no American airline can merge or change its ownership without the approval of the CAB (whose objectives might otherwise be defeated), the ATLB is not even con sulted when, for example, BOAC merges with Cunard, or when British United Airways takes over Silver City or Jersey Airlines. British air transport is faced with a choice. The industry must be regulated by the Air Transport Licensing Board or by the Minister of Aviation. The present dichotomy is good for nobody. Britain has an Air Transport Licensing Board, and it is the best we have got; but it cannot properly regulate the industry unless it is given more power to initiate policy and to have a say in inter-air line deals that could undermine its objectives. How absurd if British United, supposing they are finally granted their European licences, were to do a deal with BEA which vitiated the principles advocated by British United before the Board. Such a deal, morally supported by the Minister without reference to the Board, is not inconceivable. The danger is that the Board may wither into an agency which does little more than issue inclusive-tour licences. The Act enjoins the ATLB to "further the development of British civil aviation." It cannot do this without power. We suggested two and a half years ago, before the Board was formed (Flight, February 5, 1960, page 191), that "it must be so constituted that it can be entrusted com pletely with the expansion, promotion and economic licensing and regulation of British air transport. Just as the ARB is the nation's brains trust in matters of airworthiness and design, so should the Board be the repository of national knowledge and expertise in the commercial and economic aspects of air transport." These suggestions, we believe, have acquired new validity. Unless the industry is to be regulated by decree of the Minister, the ATLB must be given more power. And if anyone wants an example of how such power can be used effectively to regulate air transport in the national interest let him read the CAB's Transatlantic Route Renewal Case, Order No E-18301.
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