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Aviation History
1966
1966 - 0409.PDF
248 FLIGHT International, 17 february '966 AIR TRANSPORT . . . BOAC's Capital Probed—5 ONE of the things that makes State corporations differentfrom private companies is the endless argument about them that goes on in Parliament. Politicians have the right to an opinion about everything that BOAC and BEA do. Even the subject of pre-flight sweets was discussed at some length by Dame Irene Ward in the Commons' closing debate about the bill to write off BOAC's £100 million deficit One MP even suggested the appointment to BOAC's board of no less than three members to look after passengers' interests. The idea was defeated—but it is only a few weeks since the Government made such an appointment to BEA's board. It could well be that it is because politicians involve them- selves so much in the affairs of State corporations, instead of letting competition, private-risk capital and the market get to work, that this £100 million deficit—including a £30 million subsidy for BOAC—arose at all. The bill went through six Commons' committee-stage sittings, and was skilfully handled by Mr John Stonehouse, Parliamentary Secretary to the Ministry of Aviation, who was obviously well served by his department. Mr Mulley, the new Minister, had the difficult task of taking the reins over in mid-stream from Mr Roy Jenkins; but he managed a com- plex and financially highly technical operation very well. Keenly felt by all members was the sudden and tragic death of the committee's chairman, Dame Edith Pitt. For the first time in a formal financial debate about BOAC and BEA, Tory MPs proposed the idea of private participa- tion in the corporations' capital. This was advocated by Mr Robert Carr, the Shadow Minister of Aviation and by Mr Keith Stainton. Although it was, of course, not accepted by the Government, Mr Carr gave notice that it would be raised again one day. He wanted to see public money "avail- able for many other things which are queueing up for it I hope that this is a consideration which the Government will have in mind as the years go by." The greatest heat was generated by the BOAC-Cunard agreement, which led to a proposal by the Opposition that no money should ever be lent by BOAC to a private company except at a commercial rate of interest. The Opposistion demanded to know how it happened that BOAC made a "free gift" of £8£ million to BOAC-Cunard free of interest. They did not get a reply [though they need only have asked their colleague, Mr Thomeycroft, the Minister in 1962 who approved the BOAC-Cunard agreement without ever seeing it]. Mr Mulley quoted from a letter dated February 3 from Sir Giles Guthrie, BOAC chairman, that the corporation would never lend money at less than the ruling rate "without prior reference to you." It was not said whether the terms of such a loan, if approved, would ever be made public. Mr Stonehouse, when pressed, stood by the famous letter of January 1, 1964, from Mr Amery, the then Minister, to Sir Giles Guthrie, which said in so many words that if BOAC ever had to do anything against its commercial judg- ment the Minister would take responsibility. Mr Mulley him- self reaffirmed this point. [February 3, 1966, cols 1341 and 1354, for the record—as this is sure to be referred back to in years to come.] The Opposition also moved that BOAC and BEA should disclose in their accounts details of financial results on routes they were forced to operate by the Minister. Mr Stonehouse got into difficulties here in the committee stages, saying in the same breath that it was not possible from the accounting point of view—but that BEA did it in any case for their Highlands and Islands routes. In the end Mr Stonehouse referred to Mr Amery's January 1964 letter, and said it would not be in the public interest to write such a provision into the Act Mr Mulley disclosed that both BOAC and BEA had agreed from 1966-67, to make half-year statements of results. The corporations would try, he said, to give the same kind of information as private companies were required to give to the Stock Exchange. Mr Onslow, for the Opposition, lilted BOAC's blondes-in-bikini advertisements, but thought that the corporation's job was to give people information. Mr Mulley also noted the "immense difference" that existed between BOAC and BEA now that BOAC had equity capital The dividend on this capital, he conceded, should be initiated by the chairman, for agreement with the Government. As originally drafted the bill appeared to put the responsibility for deciding dividend on the Government; the Opposition maintained that this would cause trouble, but the Govern- ment point was that if it had the power to "claw back" BOAC's reserves if they grew too fat, then it must also have the ultimate power to decide the dividends. Mr Carr pointed out that BOAC would be producing much more apparently favourable results than BEA from now on. Perhaps the most startling and welcome undertaking given during these debates (December 16, col 230) was Mr Stone- house's assurance, on a valiant buy-British proposal by Mr Onslow, that "at this time there is no question of the [ten] suspended Super VC-lOs being cancelled." The bill now goes to the Lords. MODIFICATION KITS FOR THE 727 FOLLOWING the CAB recommendations (see Flight for January 27, page 128) and agreement by the FAA, Boeing is producing three modification kits for the 727. These, cover- ing fuel lines, generator electrical leads and landing gear, will be available to 727 operators in May and June and will be installed under FAA supervision. The agency has described the modification kits as part of a joint industry-FAA effort to ensure early improvements in the 727's crashworthiness in relation to the CAB recommendations which were designed to "provide for additional safety in the unlikely event of high impact forces." RHODESIAN PROBLEMS-1 WEEKLY Comet services between Nairobi and Blantyrc are being operated every Wednesday by Air Malawi, Central African Airways and East African Airways. The service began on February 9 at the instigation of the Malawi Government following a ban by East African countries on landing rights for CAA aircraft registered in Salisbury. CAA's Salisbury- Nairobi flights are being terminated at Ndola, Zambia. Air Malawi and Zambia Airways, who between them own 55 per cent of CAA's shares, are continuing to negotiate for re-registration of some CAA aircraft in Lusaka or Zomba. Such a move would overcome the East African ban but would present maintenance difficulties unless facilities for servicing can be arranged in Nairobi. RHODESIAN PROBLEMS-2 A British Aircraft Corporation spokesman confirmed last week that the two One-Elevens on order for Central African Airways were still being allocated to CAA and painted in trie airline's colours. Whether delivery would go through would not be known, he said, until BAC applied for an export licence for the first aircraft at the end of February. It is not clear whether the "essential needs" of CAA, which the Bntisn Government has specifically excluded from the almost tota embargo on goods which can be sent to Rhodesia, j^r? either the One-Elevens or the Viscount spares whichi CAA needs. One possibility is that both transactions will go tnrougn on a dollar payment basis.
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