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Aviation History
1963
1963 - 0271.PDF
fLIGHT International, 21 February 1963 Another passage reads:— "If they are reasonably efficient, operators should enjoy a tariff which enables them to cover costs and make a reasonable profit." The Board sees this as "the only major objective test we can apply-" There is nothing objective about this test unless the Board adopts suitable standards for measuring efficiency. What standards does the Board insist on? None. Instead it accepts completely BEA's own cost-comparisons with other operators selected by ; BE A and concludes: "BEA's operating efficiency is above rather than below average." This may well be; but the Board makes no attempt to examine other operators for itself, and accepts revenue-rate figures in pence per mile without any adjustment for the relative value of money in the different countries—and without regard to the difference in load factors (e.g., US domestic trunks, 56 per cent; Australian domestic carriers, 60 per cent; BEA domestic, 68 per cent). The Board does not use its own criteria; it accepts the evaluations of the applicants. Its complete acceptance of an applicant's cost level is most unfortunate, because its job should be to needle improvement in a sphere where the airlines themselves would always admit there is room for improvement. The Board goes on to say:— "Unfortunately for the general health of our civil aviation, losses on domestic routes are the order of the day." No one would suspect from this the evidence which emerged in hearings before the Board about the profitability of the independents. BKS agreed that they were asking for "more profits," which were presently marginal. British United (CI) recorded profits in the last three years which, as a percentage of turnover, were 18 per cent, 13 per cent and—last year—5 per cent. Cambrian's percentage profit has, over the last three years, been 15 per cent, 8 per cent and 6 per cent. Derby Aviation said that even thin routes "keep our noses clean." Starways made no application for increases on their principal routes, which are already priced well below BEA levels, from which it is reasonable to assume that Starways are profitable too. Only Dan-Air's west country routes, which are in the development phase, were said to be losing money. Only publication of the independents' financial results can ever reveal the complete truth, and perhaps one day their costs will be published for all to see, like those of British motor bus companies. Public hearings into fare-increase applications, which are always based on allegedly rising costs, are a farce unless everybody knows what the true costs are. Battle for UNTIL last week the Minister of Aviation had been non-commital about BOAC and BEA being allowed to tender for trooping. The idea, he said last November, was "worth careful study." It depen ded, he said, on the extent to which the independents' new scheduled services were taken up. Now he has told the House of Commons, through his parliamentary secretary, Mr Neil Marten, that BOAC and BEA are contemplating (1) putting proposals before the Air Transport Licensing Board for the carriage of troops on scheduled services at fares more than 30 per cent below normal tourist-class rates; and (2) applying for long-term trooping contracts. Trooping has always been almost exclusively the preserve of the independents; it has been Government policy to award—on a highly competitive basis—contracts to the independents while the corporations have concentrated on the job of developing Britain's civil scheduled air services. Last year trooping accounted for about 40 per cent of the inde pendents' total passenger-miles and, at about twopence a mile, perhaps a third of their revenues. The main contractor is British United, whose trooping to the Far East and African garrisons probably comprises (no figures are published) at least a half of their revenues. In the case of Eagle, second-largest troopers, at least a quarter of their revenues are derived from flying soldiers, sailors and airmen and their families to the Mediterranean garrisons. Naturally, the independents are extremely worried at the prospect of losing trooping business to BOAC and BEA—just as the corpor ations were, and are, perturbed at the prospect of losing civil scheduled business to the independents. But if the independents now have a right equal to that of the corporations to apply for scheduled services, then mutatis mutandi he corporations should now have a similar right to apply for rooping—particularly as they have idle capacity available. 257 How can the Board say, on the evidence before it, that the in dependents' proposed fare increases "represent no more than an attempt to minimize losses ?" On the number one question of judging how fare increases will affect the market, the Board says :— "We are content to rely on BEA's commercial judgment; and even if we had any ready means of forming an independent commercial judgment we might find ourselves seeking to impose greater increases than those for which BEA have applied." This is a most remarkable statement by an independent authority with the statutory power to fix the fares of a great transport indus try. It is so extraordinary that it must be a mistake. It reads like an admission by the Board that it is not up to its job. If the Board really does feel that it has no ready means of forming an indepen dent judgment on commercial matters, then it should at once take steps to form a secretariat, as the CAB has, to help it in its delibera tions. And what is one to make of a fares-regulating tribunal which as good as invites the industry to apply for higher fares? The Board implies that its concern must be to approve fares that do not "retard traffic growth," and one imagines that it has made considerable research into this point. But the decision records no research, and it must be presumed that the Board relied on BEA's judgment:— "The chairman: Do you anticipate that the new rates for which you are asking will slow down the rate of traffic increase substanti ally? Mr Marking: Not 'substantially.' 1 think it will slightly, and as you will see from the figures which we have given you, the rate of increase is slightly less as a result of the fare increase; but certainly not 'substantially.' The Chairman: You would expect that to be temporary? Mr Marking: I think so, yes." Tariff decisions should not really be based on questions and answers like this, however good BEA's commercial judgment may be. From the Board's statement that it would have granted higher fares if it could have done, it is clear that the airlines will get a warm welcome from the Board when they go back for higher in creases. Footnote BEA's stand-by fares application (which, as reported last week, was heard in private) is approved by the Board as this issue goes to press. the Troops On the other hand, it would obviously not be fair if the indepen dents' trooping business were not to be at least as protected as are the corporations' scheduled services. What is particularly interesting is that BOAC and BEA are to ask the ATLB for these ad hoc trooping fares on scheduled services, because strictly speaking troop ing has nothing to do with the ATLB; all an operator needs to en able him to do trooping is a Government contract. What the inde pendents must be really concerned about is the prospect of the corporations bidding for long-term charter contracts. Far East Interest in the 748 Thai Airways are understood to be negotiating the purchase of three Avro 748s. Northwest 720B Crash A Northwest Airlines Boeing 720B with 35 passengers and a crew of eight crashed into the Everglades swamps 46 miles west of Miami about eight minutes after take-off for Chica go on February 12. Some 30 hydroplanes were used in the difficult job of reaching the wreckage, and as this issue goes to press it was feared that all the occupants of the aircraft had lost their lives. Non-Scheduled Flights to France. The French Government has issued new requirements for non-scheduled services to France by foreign companies. These are outlined in French Information Circular No 3, February 5, 1963, published by the Secretariat- General of Civil Aviation, International Affairs Division, DTA/E, 93 Boulevard de Montparnasse, Paris 6. The new procedures call for the completion in triplicate of forms which must reach the Secretariat General 2-15 days before the proposed flight. The French warn that if any foreign government imposes a "less favourable regime" on French aircraft, any necessary steps will be taken by the French authorities.
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