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Aviation History
1963
1963 - 0656.PDF
TZ-iBE e •_•_ * » AIR MALI • 9 & ••••-•^Mis^:i'l m m mi •*»• ilium m^mm^^mmm Three llyushin //-/88s are operated by Air Mali. They are based at Dakar AIR COMMERCE . . . MR BOYD IN TOWN CENTRAL figure in last week's North Atlantic fares talks at the Mo A in London was Mr Alan Boyd, chairman of the CAB. Mr Boyd explained the American position in an inter view with Flight International. The meetings took place on April 26, 27 and 28, ending in deadlock. There were no official news confer ences, though a short communique (see leading article) was issued at the end of the meetings. The CAB, said Mr Boyd, was "constitutionally opposed" to IATA, which was "a cosy private cartel." At Bermuda after the war the US had made known their reservations about fare-fixing by IATA. They had agreed to it on the basis that fares should be related to the most efficient airlines. Since then the Board had viewed with a "jaundiced eye" the way the general fare level had gone up. In 1956 the Board opposed an IATA proposal to increase North Atlantic fares by 10 per cent. In the face of strong diplomatic representations the CAB had backed down, though declaring that the increase was not in the public interest. But, recalled Mr Boyd, the CAB had then made it clear that, in future, carriers must provide the Board in good time with the necessary minutes to give the CAB the opportunity to examine the justification for fares changes. Otherwise IATA would have to take responsibility for any resultant chaos. The CAB had expressed concern in 1957, 1958 and 1959 that it did not seem to be getting the information. Why had the CAB's disapproval come so late in the day? Neither the CAB, nor the US carriers, said Mr Boyd, had been expecting a fare increase. The Board received IATA's Chandler resolutions in late November, in the form of the proposed new fare. "I don't believe I have ever physically seen the agreement," said Mr Boyd, "and I am advised by the CAB staff that no justification for the fare increase has been given." So the CAB asked its own carriers for the justi fication, on December 15. Pan American submitted their comments in mid-January, saying the increases would be in the public interest. The CAB then wrote its tentative disapproval (though approving a S10 increase, to $310, in group fares), and this was published as a green paper on February 14. The basis of the disapproval was that the US airlines had being doing well; PanAm's rate of return on investment on the Atlantic in 1962 had been 5.7 per cent; TWA's international return had been more than 12 per cent. IATA then filed a paper with the CAB about the way some carriers had been losing money. The CAB was not impressed, and issued its firm order of disapproval on March 18. "Wc agree that this is causing an awful lot of trouble," said Mr Boyd. "We don't set ourselves up as having more responsibility for the public interest than anyone else, but we do say that the airlines' interest is not necessarily synonymous with the public interest, and we do have a different view of the public interest. We can't go on, year after year, substituting expediency for principle. We are not in a position to sit in judgment on other carriers, and we can't supersede IATA. There are rather too many prima donnas in governments—and we can be just as obstinate as anybody —for us to sit down and talk about fares. We're tired of arguing about everything that comes up. Perhaps we're as responsible as anybody else; I'll make that statement anyway." Mr Boyd explained the compromise solution that the CAB had proposed. Some governments had said it could not, for practical reasons of tariff-mechanics, be done before June 1. The CAB felt it could. The position now is for a freeze on the pre-Chandler fares to be extended until May 15. The situation, as explained by Mr Boyd, is perhaps best put in the form of a table:— London - New York Economy Fares Single Existing fare .. .. S270 IATA Chandler proposal $270 CAB proposal .. .. $260 Return $486 $513 S494 Thus the CAB proposal calls for a $10 reduction in the one-way fare, and a smaller increase in the roundtrip fare. Asked what the US would do if other governments imposed the final sanction on American carriers and withdrew traffic rights. Mr Boyd said: "We would do what is within our legal right in order to protect our carriers. We certainly wouldn't issue any inflam matory statements. If it gets to the stage of an ultimatum we might say to US carriers; Right, charge Chandler, but it will not be approved by the CAB. They've got their fare, we've got our prin ciple.' I don't think they would go to such lengths to get a fare increase." Mr Boyd said that there was something wrong with airlines who could not make a profit on the Atlantic with present fares and traffic. As President Truman used to say: "If you can't stand the heat, you'd better get the hell out of the kitchen." If the US carriers were the only ones who were efficient, said Mr Boyd, "maybe we wouldn't feel so strongly." But TCA, though State-owned, was "in the same range"—and though there had been no collusion with the Canadians the CAB had been glad to have Canadian support: "it's comforting to have company in this situation." And there were "the little outfits like Swissair and the Irish" who made their way— if not them, why not others? Asked what was the Europeans' reply to the CAB, Mr Boyd said: "They argue that the difficulties are caused by overcapacity, for which Pan American are responsible. and that the Americans are always trying to run everyone out of business." J. M. R TOBa^SfflBPSS'^^"^" Boeing hove appointed Mr G. W. Taylor as their international sales director for Australasia and the Far East. Until recently director of Boeing's Sydney office, he will be based at Renton, Washington
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