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Aviation History
1964
1964 - 2308.PDF
just over a month's time the second operator of the VCIO will introduce regular services, w/t/i non-stop 4,000-mile flights from London to and from ttebbe and Nairobi. British United have chosen a bold colour scheme—blue cheatline and fin bullet, red lettering, and the biggest and most prominent in British air transport Latin American Feeding: Bottle T is hardly surprising that Parliament ran its full course without the Minister announcing his decision about Sir Giles's request >r cash in aid of the east South American routes. In fact it may be sriously doubted whether the present Minister has power to do rtiat Sir Giles would like. If this is so, it will be the next Minister the next Parliament who decides the fate of South America, IOAC and the independents—but not necessarily in that order. The questions that need asking are:— Is it right to abandon any South American routes ? Can the Minister direct BO AC to continue? Has the Minister power to award a subsidy? Is it possible to award a subsidy in such a form that it will promote operating and cost efficiency ? Time to Abandon Parts of South America? In Santiago last month there was a five-day conference of top .atin American and US officials (including Mr Halaby and Mr Joyd) to discuss the future of Latin America's aviation. They liscovered that in the last ten years:— Overall traffic was up 175 per cent (compared with 117 per cent n the rest of the world); Traffic in Argentina, Chile and Colombia more than tripled; Uruguay up 400 per cent; Brazil second only to US and Canada in domestic traffic. Boeing and Douglas consider that Latin America is one of their biggest potential markets for the 727, 737 and the DC-9. The Alliance for Progress has already poured $85m into airports and lir navigation facilities and will need to pour a lot more. Although the South American continent is served by as many oreign airlines as is North America, the general picture of traffic growth in a continent of 220m suggests that the need is not so much to abandon effort as to redirect it. Undoubtedly there are marginal traffic sectors to be revised or eliminated, but BOAC's most serious task is to revise its routes to match such powerful competition as Pan American's London - Buenos Aires with only one stop in New York. Too often BOAC is associated in fact and fantasy in the world traveller's mind with the bus-stopping services inherited from the Imperial Airways outlook. The journey to South America by short-sector Comet is irritating for the long- distance traveller. There is little need for BOAC to supplement the regional carrier network in Latin America, but there is every need ^> select the right long-haul minimum-stop targets. The Minister's Powers for Route Directions to BOAC Section 5 of the Air Corporations Act 1949 gives the Minister Power to give directions of a general character to BOAC or BEA in relation to matters which appear to the Minister to affect the national interest. Until 1964 this power had only been used once, " 1947, to transfer certain routes from BOAC to BEA to facilitate *e transfer of some property in France from BOAC to BEA. pmce that time the Civil Aviation (Licensing) Act 1960 has come into force, putting the corporations and the independents on an equal footing to make applications to the ATLB for licences, Subject to a right of appeal to the Minister. i It BOAC wish to abandon certain routes the correct procedure p tor them to apply to the ATLB for a revocation of licences. TheMm 'ster cannot direct the ATLB to refuse the application. Hence only if the ATLB refused and BOAC appealed would the Minister have the chance to make his own wishes triumphant. For the Minister to direct BOAC to continue on certain routes is for him, in effect, to direct them to continue to hold licences which they wish to surrender. For him to act in this way would not only seem to be Ministerial contempt for his own independent creation, the ATLB, but would also put the Minister in the role of manage- ment-interferer, advocate and Lord of Appeal in his own cause. This is not likely to please the Council on Tribunals, whose task amongst other things is to supervise the workings of the ATLB. Present constitutional practice does not favour Ministers acting in so many conflicting capacities, which in this case would only serve to diminish the status of the already under-powered ATLB. Is there a way round this tangle if BOAC operate under charter to a Government Department for which no licence is required? On this theory, the disputed Latin American routes could be operated by BOAC under charter to the Foreign Office or the Board of Trade. But seats could not then be sold to the general public because BOAC would then be in breach of IATA resolutions. End of idea. Hence, except perhaps in a national emergency, it is extremely doubtful whether the Minister in his present statutory capacity can order BOAC to continue to hold licences which BOAC wishes to surrender. Can the Minister Give BOAC a Subsidy? No. The subsidy powers came to an end in 1956. All that the Minister can do at the moment is to make direct advances for the purpose of financing accumulated deficits. He cannot even write off the accumulated deficit without further legislation—which can only be done by the next Parliament. What Form Should a Subsidy Take? It does not take the Ferranti affair to make the Minister realize that fixed-price contracts do not always produce the right incentives. Therefore a block grant to BOAC would be wrong; there would be no incentive to efficiency. Nor would it be enough merely to guarantee to pay the difference between operating costs and revenue. So far, our society has not provided a better incentive to efficiency than competition allied to sound management. For example, the independents may be prepared to take on Latin America without any Government financial help and to the extent that they are "cashing in" on established goodwill, they should be prepared to pay for the privilege. Before playing with efficiency-promoting subsidy formulae, the next Government would be well advised to consider the whole field of relationships between the public and private sectors of air transport ownership before taking a decision on Latin America. For the Minister to intervene with positive instructions OB both the subjects of routes and subsidies is for the Minister to assume major management responsibilities, Is he equipped to do this? If his experts know enough to take these decisions and live with the consequences, then why aren't they seconded to work in BOAC? If they don't know enough, how can they possibly reach the right decisions? Part of Dr Beeching's success lay in the fact that his personal pay enabled top experts of all kinds to be brought in at the right salaries. Aay sign in BOAC?
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