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Aviation History
1963
1963 - 1019.PDF
988 FLIGHT International, 20 June 1963 AIR COMMERCE (continued from page 953) about the outcome of public policy. His conclusions are interesting. He suggests that the economic performance of the US domestic airlines has been quite creditable and that it compares favourably with unregulated industries operating in similar market conditions. He further concludes that the Civil Aeronautics Board has been reasonably successful in achieving certain goals of national aviation policy by its regulation of the airlines. But, despite these conclusions Professor Caves ends his book by suggesting that the time has come for the regulation of US domestic air transport to be sub stantially relaxed. The reason for this apparent contradiction is that he is not convinced that the national goals which can be achieved by airline regulation are sufficiently important to justify the penalties needed to secure them. This judgment, as he acknow ledges, is a political decision and not a matter of economics. But it is not easy to see how Professor Caves supports his personal political judgment in the face of the facts which he presents in his book. One of the goals of US aviation policy has been the sound economic development of air transport. This has been interpreted by the CAB to require a high degree of stability in the provision of air services, a condition which is unlikely to be achieved without regulation. Professor Caves notes that the natural conditions of relatively easy entry into air transport necessarily also imply ease of exit. Hence, without licensing of entry there would probably be a rapid turnover of firms and this would certainly be regarded as contrary to the public interest. This, surely, is the basic justification for continuing route licensing and the other features of economic regulation which follow from this control of entry? Disagreement on this final judgment does not, however, detract from the profound respect which one must feel for Professor Caves' fascinating analysis of airline economics. THREE GENTLEMEN OF VERONA BOTH BEA and British United appealed against the ATLB's decision to award Air Ferry a licence for a service from Manston to Verona, and the appeal was heard in London on June 11 before Sir Arthur Hutchinson. This was British United's first appeal, and it was also one of those rare occasions on which an independent appeared with a corporation in an appeal against an independent —though the two appeals were quite different. Mr Henry Marking, BEA's secretary, submitted that the BEA service to Verona using coaches from Milan or Venice would com pare favourably with that proposed by Air Ferry. He said there was no evidence of need or demand for the service. Referring to the Genoa case, in which British United's competing claim with BEA was upheld by the Minister and the traffic rights secured at BOAC's expense, Mr Marking produced evidence to show that BEA could have flown London -Genoa without charge to the tax payer. "BEA could have operated between London and Genoa for no price at all," he said. "The cost to BOAC will be £50,000 a year or possibly £75,000 a year. It need have cost the nation nothing." (Mr Marking produced a letter from Gen Santani, the Italian director-general for civil aviation to a senior official in the Ministry of Aviation, which confirmed that the Italian authorities were ready to grant BEA permission to fly London-Genoa.) Mr Mark ing asked if a similar thing was going to happen in the case of the Verona route. Was there, he asked, going to be more selling out of the air corporations in order to buy new international services for the independents? For British United Airways Mr A. M. Blakemore said that there was no real evidence of a demand for the proposed service. He pointed out that though the Board had limited inclusive-tour capacity on the route because of adequate existing supplies of IT seats, the Air Ferry service would put a further 13,000 seats on the market. He also reminded the commissioner of the difficulty of obtaining Italian traffic rights, _BUA still not having been granted rights for their new service to Milan. Mr Allan Orr, QC, appeared for Air Ferry, who propose to use DC-4s or Vikings from March 15, 1964, on their Verona service. RESIGNATION FROM IATA "TEMPORARY cancellation" of Aerolineas Argentinas' member ship of IATA, announced on June 8, is perhaps more of a setback for IATA than it is for the Argentine national airline. Whether or not Aerolineas has been involved in the extensive South American rate-cutting war, and if so whether this has exposed it to hefty IATA fines or even expulsion, is known only to IATA's private in vestigators and to the Argentine airline's competitors. But if Aerolineas is "guilty" of fare-cutting, it is a question of when the bell tolls, it tolls for other airlines—and IATA—too. Just as difficult a problem for Argentina's airline has been the currency malaise so prevalent in South America; the peso's value is less today than it was yesterday, and more today than it will be tomorrow—both in the airline's markets and in the IATA clearing house in London where interline transactions are settled. The commercial advantages of belonging to IATA, not least of which is the multilateral interchangeability of tickets, will now no longer be enjoyed by Aerolineas Argentinas, who will have to make new arrangements on a bilateral basis. This may not be too difficult, since Argentina represents an important market for many of the leading national airlines. And there is no reason to suppose that the Argentine Government will be any less protective towards its flag airline's interests. The Argentine airline states that it will continue to operate in accordance with the bilateral air transport agreement between the UK and Argentina, with the established procedures of IATA and that it will apply the approved passenger fares, cargo rates and agency commissions. Footnote Jordan Airways have applied for membership of IATA. Air Guinie are at present re- equipping with DC-4s and are operating this aircraft, 3XY-UN- N4I34I, which formerly belonged to Reeve Aleutian Airlines. There are reports that Air Guinee are contemplating the purchase of two Boeing 720s
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