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Aviation History
1968
1968 - 0007.PDF
FLIGHT Internationa/, 4 January 1968 Wanted: A New Dialogue By M. J. HARDY I T MUST BE UNIQUE in the history of air transport for aParliamentary body examining a mixed-economy airlineindustry (or rather an important segment of it) actually to recommend the abolition of the licensing authority control- ling it. This the Select Committee on Nationalised Industries looking into BEA's aircraft procurement and other matters did last month when it suggested that the Air Transport Licensing Board should be wound up. Had the ATLB followed a policy over the years of indiscriminate route awards to the independents that were bleeding BEA white financially, and had the Minister concerned turned down BEA's appeals against such decisions, there might have been some justification for this extraordinary view. Nevertheless the Select Committee has unwittingly done a slight service to British air transport by underlining not the board's failings so much as the lackadaisical monopolism that characterises British air trainsport regulation. Just as a gesture or a mannerism illustrated a whole personality, so the cherished position of monopoly in our air transport is sharply illuminated by the Select Committee's argument. Like the family in Dodie Smith's play, monopoly has become a British institution, a Dear Octopus from whose tentacles we can never quite escape, and in our inmost hearts would never wholly wish to. It represents above all the safe, the easy, the unquestioning acceptance of existing standards and values, and a freedom from inconvenient new ideas; it is in this—a psychological rather than a commercial or operational reason—that its appeal to civil servants and ministers is to be found. Why has the idea of competition in British air trans- port on the American or Australian scale always been so suspect? Because it would mean a constant procession of new ideas, new routines, new equipment, new tariffs and pro- motional fares, new standards of cabin service—in short, a constant process of adjustment to the needs of a dynamic industry which is distasteful to the more static Civil Service mentality and the '"gentlemen-in-Whitehall-know-best" doc- trine. This is well illustrated by the way in which the ATLB was recently directed to refuse those parts of the British inde- pendents' Atlantic applications involving traffic rights which it would be inexpedient for the time being to seek—no prior consultation with the airlines concerned, only the minimum prior notification to the ATLB itself and apparently no thought at all of the consequent diminution of Britain's future share of international traffic or the future market for British air- liners. No Rubber Stamp To be fair to the ATLB, it has never encouraged whatever political hopes there might have been that it might become a rubber stamp for monopolism, however uninspired some of its decisions may have been in the past. The Select Com- mittee came down firmly on the side of allowing airlines to fix domestic fares and the Board of Trade to settle the degree of competition between independents and corporations. Yet it is precisely because governments past and present have proved incapable of this task that the ATLB is necessary, even with its present restricted terms of reference and relatively limited powers. It would be superfluous to point out that without the ATLB the Board of Trade would be quite unable to cope, in its present form, with all the applications—particularly for group charters and inclusive tours—that British carriers put forward every year. Nor does it need to be emphasised that the instinctive reaction of a government with a statutory vested interest in the corporations would, in the absence of an independent licensing authority, be to block off any competi- tive threat that the independents were to put up. Without the ATLB, however inadequate it may seem, we would be back in the bad old days of a decade ago when, if an independent like British Eagle applied to operate London- Manchester on the grounds that there was room for a second carrier and more services were needed, the Minister of the day simply directed BEA to increase its frequencies. This sort of political climate, in which the old Air Transport Advisory Council had to work, tended to foster a view of competi- tion as something to be blocked or bought-out rather than regulated; it was deeply suspicious of what Professor Chering- ton has called the "activist" approach to market development, particularly if it took the form of lower fares, and the atti- tudes it begat did not disappear with the ATAC. BOAC- Cunard and the way it was formed was the prime example of such negative thinking. There were also the restrictions on types of equipment and quality of service applied to the Colonial Coach routes and the way in which Mr Harold Bam berg's Very Low Fare proposals for British cabotage routes in late 1958 were pre-empted by the British Govern- ment-encouraged break-up of the 1959 IATA conference at Honolulu in its efforts to secure a more widespread adoption of economy class, and the subsequent introduction in 1960 of Skycoach, although these fares and frequencies were never adequately developed by BOAC. How much more sensible it would have been had a British modification of the US "supple, mental" authority, permitting selected "non-skeds" to operate up to ten flights monthly between any single pair of points, on a scheduled basis and at lower fares, been worked out to meet the Very Low Fare proposals of Eagle. Regulatory Inadequacies Yet although these tariffs were never offered to the public, they did perform a very real service in underlining the inade- quacy of the existing regulatory machinery, and without them there might have been no ATLB set up after the 1959 elec- tion. Once again, inadequacies have become evident and a question that caries out for an answer is this: Where is the robust, questioning dialogue that ought to exist between licensing authority and operators, and which is seen at its best in United States regulatory proceedings and the creation and maintenance of the Australian two-airline system? It is this, rather than any particular degree of independent com- petition, that is most conspicuously lacking in British air transport regulation today; it is this, rather than "furthering the development of British civil aviation," that British air transport most needs; it is this which is the most valuable thing an independent licensing authority can offer, and to provide which the existing ATLB must be strengthened and given wider powers. Nor it is only a matter of extra powers, extra staff and the ability to collect and publish statistics, vital though these may be; the whole underlying attitude of our current regula- tion—that the airlines know best—must be discarded in favour of a more testing, more critical, more challenging approach to the conventional air transport philosophies—par- ticularly the desirability of fare increases, the benefits of pool- ing and the wisdom of single-carrier designation on so many British international routes. Above all the ATLB must show more intellectual curiosity and a greater willingness to chal- lenge airline arguments than it has done in the past. How refreshing it would be if the board took itself off to the USA to look at Eastern's Air Shuttle or Pacific Southwest's San Francisco-Los Angeles operation, to Australia to look at the two-airline policy working, and to Paris to see how Air France and UTA co-operate to provide a round-the-world service that is unique in that it is operated jointly by an independent and a State airline. The relationships between UTA and Air France, TAA and the Ansett-ANA, Air Canada and CPAL, All Nippon and JAL are essentially those of equals, and surely gives the lie completely to the argument that we can only have a truly independent licensing authority by denationalising the corporations or re- stricting the independents to a certain defined area, as Sir Frederick Tymms suggested in a recent letter to Flight. No other major airfaring nation with a mixed-economy airline
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