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Aviation History
1964
1964 - 0713.PDF
412 FLIGHT International, 19 March 19a AIR COM MERCE . . . a product does not require that one produce it. In fact, the two can be at odds. "By blocking space from the all-cargo specialists, the combination carrier can increase its participation in large volume freight. As the matter stands now, only a relative handful of cities create enough traffic to support all-cargo service. Such service can be brought to many additional communities, and with economic benefit to all carriers, by the blocked-space approach to capacity production. "Ultimately, it is possible that the all-cargo carriers could operate entirely on a wholesale basis. Combination carriers may lease their certificate authority. We would then have two or three wholesalers providing bulk cargo services for the entire industry. Blocked- space arrangements seem to me to represent a natural evolutionary step in this direction. "It is not too difficult to sit in Washington and build a network of passenger services. We have a wealth of statistical data and knowledge which directs us clearly toward those markets which are in need of service. The same cannot be said of air cargo. We do not know the intricacies of a particular company's production and distribution process. Nor is this the Board's function. This know- ledge must be sought out by the carriers. It will be a slow and tedious process—individual discussions, plant-by-plant, out of which will come mutual education and adaptation. The probability of success will rest heavily on the carriers' ability to tailor opera- tions to specific production and distribution schemes. "These operations will be an adjunct to the route services of the all-cargo carriers, not a substitute. The Board intends to see that these carriers continue to meet their service obligations between certificated points. Ultimately off-route operations should evolve into a pattern of sufficient stability that they will be absorbed into the framework of scheduled services. There is no question that the economic foundation of today's scheduled all-cargo service is shaky. Blocked-space arrangements with combination carriers should have a material strengthening effect. "I would like to mention one further possibility—the feasibility of permitting freight forwarders, or for that matter, other regular shippers of substantial volume, to block space from the all-cargo carriers. The receipt of sizeable shipments on a recurring basis produces economies of operation for the carrier which should flow to the benefit of the shipper as well. "The Board has a responsibility to all carriers under its jurisdic- tion and to their stockholders. The all-cargo carriers have made substantial contributions. They were the first to introduce modern equipment designed for the purpose of carrying cargo. Yet every step they have taken has been bitterly contested. These carriers have no monopoly. In fact, their competition has been greater than that to which the passenger carriers have been subjected. They have received no subsidy, contrary to the situation of all other carriers on which certificate obligations have been imposed. "Today, the combination carriers are buying jet freighters. They have the capital to do so because of their profitable passenger operations, subsidized in early developmental years. But they are latecomers to the field of volume air cargo. Parenthetically I would like to say here that you appreciate I'm generalizing. It is only fair for me to acknowledge that American Airlines has shown a con- sistent and legitimate interest in air cargo so I hope American will forgive me for throwing them in with the rest of the carriers. "Until a scant few years ago, the combination carriers were giving development of all-cargo carriers little more than a passing nod. I do not criticize management for this. Quite the contrary. The more profitable aspect of their business is in passenger carnage. It produces more revenue and, being more highly developed, requires relatively less sales effort. This is exactly what a management res- ponsible to its stockholders should pursue. "However, regulation exists because a public interest factor must be equated with the private interest in a free economy. This same obligation to stockholders operates with the all-cargo carriers, within their sphere of business access. It operates as a spur to the development of air cargo. This is regulation at its best since it means that less regulation must be imposed because it is built into the system." AIR CARGO FORUM THE Society of Automotive Engineers will hold a second inter- national air cargo forum this year, and it is expected that some 500 leading figures in the air freight industry will attend. The meet- ing takes place in Montreal from May 26 to 28 at the Sheraton - Mt Royal Hotel. The SAE's address is 485 Lexington Avenue, New York 17. Among the speakers will be Robert W. Prescott of Flying Tiger, on The Nature of Air Cargo; Charles Froesch of Eastern Air Lines, on Surface Equipment', Delos W. Rentzel of Slick, on Airborne Equipment; Harold L. Graham of Pan American, on Intransit Control; Michael J. Cafferty of the CAB, on Administration, and William Littlewood of American Airlines, on Planning Ahead. Other speakers will include Dr J. P. Sandiford, McGill Uni- versity, Montreal; K. R. Sealy, London School of Economics; J. E. Gildea and J. O. Riley of the US Post Office; Dr E. P. Jaeger of Panalpina World Transport, Zurich; J. L. McLellan of Trans- Canada Air Lines; Col R. R. Gray of USAF Military Air Trans- port Service; Col E. E. Robertson of US Air Force Logistics Command; V. F. Caputo of the Office of US Secretary of Defense; A. Groenewege of IATA; R. J. Moulton of ICAO—International Civil Aviation Organization, Montreal; Bo Bjorkman; and Stephen Wheatcroft. More Air Commerce New* on pages 445-446 From left to right at Beirut recently: a Lebanese International Airways DC-7; an Alia Royal Jordanian Airlines DC-7; and the tall of one of AHa's Heralds. In a hangar on the right were four DH Rapides, two registered G-AKMH and G-ALNS owned by S. G. Newport of London
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