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Aviation History
1963
1963 - 2056.PDF
856 FLIGHT International, 28 November 1963 AIR COMMERCE . . . BRITISH UNITED'S REPORT: A POSTSCRIPT SALIENT figure in the Air Holdings annual report published last month (Flight International, October 24, page 698) was the profit of more than £lm. Because British United Airways are the main constituents of the Air Holdings group, this profit was not unnaturally contrasted in the public print with the dismal £12m loss of BOAC. The Air Holdings report was released at about the same time as BOAC's report. Air Holdings' financial record, going way back into the Airwork years, speaks for itself; but comparisons between BOAC and British United, using this Air Holdings report as the basis, are grotesquely unfair. Air Holdings are a group of companies with a wide diversity of interests such as helicopter contract operations, aircraft manufacture, personnel training, aerial survey, etc, in addition to the public and Government contract air transport operations of British United. Because the report consolidates all these activities there is no way of telling how each, and BUA in particular, fared. There is actually less about British United Airways in this report than can be deduced from Ministry of Aviation and IATA traffic statistics, and it contains but a minute fraction of the information that BOAC and BEA, and other airlines, publish about themselves. This is no criticism of BUA; Air Holdings are a private group whose only public accountability is to file a balance sheet each year with the Registrar of Companies. And we hasten to add that any morsels of information about the independents—who claim equality of opportunity with the corporations while claiming the right to withhold financial information about themselves—are welcome. Air Holdings do not have to make a Press release of their annual report; indeed, they chose not to do so last year when, paradoxically, their results were so good that they might have prejudiced the outcome of some new licences that British United were after. Contrary to the impression that Air Holdings may have given, this report is a public document, and is available to anyone who cares to call at the Board of Trade companies office in London (see "BUA's Buried Treasure," Flight International, January 31, 1963, page 148). The report shows that the book value of Air Holdings' net assets reached a peak in 1962 of £14|m. This rise reflected the acquisition of Silver City (British Aviation Services) and Jersey Airlines early in the year. To compare like with like the Air Holdings profit of £lm in 1962 should be compared with a 1961 figure which takes Silver City's results into account. In round terms Silver City were losing at the rate of ££m a year when Air Holdings took them over, though there is no indication of this in the report. The Board of Trade files, however, make it possible to get an approximate idea of the financial changes which the merger invol ved (see table). It appears that Silver City's shareholders had to accept a drastic devaluation of their investment before this was converted into a small share in Air Holdings. This was presumably to take account of Silver City's substantial £l|m accumulated deficit and also to acknowledge that the Silver City fleet had been inadequately depreciated and was overvalued. On the other side of the coin, however, were Silver City's valuable investments in land and buildings (presumably Lydd Airport and Silver City House in Knightsbridge) and these appear to have been undervalued. So substantial is the proportion of Air Holdings' funds now tied up in assets other than aircraft that it might—apart from any of the other reasons just outlined—be misleading to compare Air Holdings' excellent results with those of airlines which have sunk their funds into assets known as airliners. This proportion will, however, diminish as BUA's massive investment in new British aircraft— VClOs and One-Elevens—appears on the books. With these aircraft in service British United will rank among the elite of the world's airlines, and they will be worthy of an annual report rather more informative than the latest one. Net assets (£m) aircraft other fixed assets investments net current assets total Funds (Cm) issued shares capital reserves revenue reserves tax reserves loans accumulated loss total BUA 7.5 1.8 0.3 2.0 11.5 0.5 4.1 0.8 1.1 5.0 11.5 1961 BAS 0.7 0.7 0.1 0.4 1.9 1.0 0.2 2.2 (1.5) 1.9 Total 8.2 2.5 0.4 2.4 13.5 1.5 4.3 0.8 I.I 7.2 (1.5) 13.5 1962 Air Holdings 8.3 2.9 0.1 3.2 14.5 0.6 6.2 0.9 I.I 5.7 14.5 Note: Additions not always the sum due to rounding-off of figures. VCIO G-AR.VB over Johannesburg while undergoing performance tests at Jan Smuts Airport recently. The foreground shows the HMbrov/ district of the city, reputedly the most densely populated square mile in the southern hemisphere. In the background are the gold mine dumps- The VCIO has now completed its hot weather trials for the certification programme i t aufflttftfr • H^i* 8* •T" It •••• • I .f *•" ^umtimm
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