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Aviation History
1963
1963 - 0267.PDF
FLIGHT International, 253 i] February 1963 Above right, three Pratt & Whitney ]T8D turbofans thrust the 727 on its maiden flight from Renton (Washington) Municipal Airport. With triple- slotted wing trailing edge flaps fully extended, the aircraft MS airborne after about 3.000ft. Boeing expect to have the aircraft certificated and 25 available for delivery and airline service by the end of the year. Below, making the best of bad flying conditions, de Havilland Trident 03 carries out slush-drag tests at Hatfield. Trident 02 left for Malta on kbruory 8 to escape from the iritish weather. Four aircraft hove now completed more than SOOhr. The first round of tropical trials was completed last November and the next round is due to take place in April. An aircraft will be delivered to BE.A for route- proving and familiarization flying in the early autumn «-*^*«rp ?#i &MsMttaiMM&anm*> HOW GOES SEABOARD NOW? TWO years ago, when Seaboard were on the eve of introducing a fleet of Canadair CL-44s on to transatlantic scheduled freight operations, many people in the air transport business—including a number of air freight pundits—thought that the airline, already in financial difficulties, would finally lose its shirt. What has been the record? When final figures are available for 1962, the first full year of CL-44 operations, Seaboard will show a gross profit of nearly $lm on total sales of about S23m. This compares with the five previous years when losses totalled $ 15.5m on gross revenues of $ 105m. What is behind this dramatic reversal of fortune? According to Mr Richard M. Jackson, president of Seaboard World Airlines, in a speech before the New York Society of Security Analysts Inc, the operating profit and the $5.6m improvement in the profit and loss account is half due to the CL-44's low operating cost and half to building revenues and cutting controllable costs. Seaboard began 1962 with a fleet of four CL-44s, later increased to seven; these Rolls-Royce Tyne powered, 30-ton payload swing- tail freighters have the same cost per mile as the airline's Super Constellations, but a 66 per cent greater load capacity. Seaboard were therefore able to obtain more revenue on fewer flights at less cost, at the same time reducing overheads to the point where they form only 40 per cent of the total cost as defined by the CAB. The company is confident that the CL-44 fleet earnings and operation or sale of the Constellations will meet the heavy capital repayments looming ahead. These will peak to about $7.6m in 1963 (including $4m on the CL-44 debt), gradually reducing to about $2m in 1969. With a tax loss of about $14m distributed through the next seven years Seaboard do not anticipate paying any income tax for some years to come. Mr Jackson said that Seaboard's objective is to reduce its re liance on military charter revenues, which are at present equal to those from scheduled services, by concentrating on expanding the existing scheduled air freight link between New York and 17 cities in seven countries of northern Europe. In 1962 Seaboard Airlines carried the most transatlantic air freight, accounting for 21 per cent of the traffic carried by mixed and all-cargo scheduled services. Second were PanAm with 20 Per cent, third KLM with 12 per cent, fourth TWA with 8 per cent, fifth Air France with 7 per cent, and sixth BOAC with 6 per cent. The profitability of Seaboard's Atlantic services can be gauged from the load factor, which for the last six months has been 86 Pc cent eastbound and 75 per cent westbound, with a good average revenue rate. On the subject of the proposed Pan Am/TWA merger, Mr Jack son says it is "sheer bunkum" that such an arrangement would rate the participation in the market by US flag carriers from 34 per cent to about 60 per cent, i.e., to the percentage of travellers that is American. His argument is: "If these poor misguided Americans are flying on the airline of their choice, which apparently half the time does not mean PanAm or TWA, is it reasonable to argue that the Government must reduce the American travellers' choice of US airlines to one in order to increase the number select ing a US carrier?" Furthermore, commercial history had shown that the merger of competing firms generally produced less total sales than the sum of the previous two (e.g., the mergers of PAA and American Overseas Airlines and of United and Capital). The two companies might be more profitable due to cost reductions, but the revenues were usually lower. Mr Jackson also severely criticized the merger plans from the "public interest" angle on three points:— (1) If the merger is to realize its stated purpose, that of conveying the majority of US travellers, this would produce a classic mono poly situation leaving nearly two-thirds of the world market with only one choice of national airline; (2) Approval of the merger as now proposed (Flight International, January 3, page 5) is not in the public interest because the Govern ment would be without a measure of performance and efficiency for judging the merits of awarding subsidies, mail services, defence needs, etc, and international rate setting. These are vital issues on which the Government cannot pass judgment by observing the performance of foreign airlines. (3) The merger would not be in the public's interest for the serious impact it would have on Seaboard World Airlines—a profitable and efficient airline doing a great job in expanding international air cargo. SWISSAIR'S PROFIT ALTHOUGH no figures are yet available Swissair announce that they made a "very satisfactory" profit in 1962. Emphasizing that the Swiss carrier is private enterprise, receiving no state subsidies, the airline reports that passenger traffic went up during the year by 24 per cent. Swissair made a profit even though overall load factor fell from 54.8 per cent to 51.9 per cent. Says the airline: "The shareholders will, of course, be paid a dividend." Extra money has been allocated for depreciation, Swissair's policy here being a ten-year period. North Atlantic Subsidies According to Mr Charles Tillinghast, president of TWA, foreign airlines flying the Atlantic in 1962 lost more than £3 5m "but were kept in operation by subsidies from their governments."
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