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Aviation History
1968
1968 - 0257.PDF
LCHT International, 22 February 1968 251 A I R T RANSPORT Transatlantic Hearings: BOAC's Case AMONG POINTS MADE during the first part of BOAC's case,presented by Mr R. M. Forrest in the last week of the^ transatlantic hearings by the ATLB, were that it was [unusual for any country to have more than one long-haul [airline and that the British independents were not maintaining [their share of transatlantic charter traffic. He pointed out that [no European country has more than one scheduled North [Atlantic carrier and that in the financially difficult days in the [early 1960s even Pan American and Trans World, the two [American Atlantic carriers, proposed to merge so as to create, [as the PAA annual report for 1962 put it, "a financially strong [US-flag transatlantic carrier, better able to compete against [combinations of foreign carriers which, since 1950, have [reduced the US share of the transatlantic market from 63 to [37 per cent." A merger agreement was filed with the CAB on I December 20, 1962, but the plan was dropped in the following [year because not enough progress had been made in the time- ttable for approvals, including those of the US Federal Govern- ! ment. Although the British independents were earlier encouraged [to concentrate on charter work, BOAC had, in fact, though [primarily a scheduled operator, been doing a major share of [this work in the period 1963-66. Of the total UK/US charter [market in 1966, Caledonian's share was 8.5 per cent, Eagle's was 7.8 per cent and BOAC's was 13.1 per cent. Whereas in 1963 the three British carriers' share of the market was more [than 50 per cent, in 1966 it was only 29 per cent. If, Mr Forrest [asked, the independents were not able to meet the US charter [challenge, could they be expected to meet the scheduled [ challenge? One reason why BOAC had a smaller share of the UK/US scheduled market than the two American carriers was because tof the way in which the US airlines had been concentrating on [the UK services, with 127 operations a week, for instance, in [the summer of 1967, by comparison with 58 to France and 127 to Italy—the next highest frequencies. The US airlines were [ignoring some European markets and directing most of their efforts to the UK/US market. Mr Forrest also pointed out that j the North Atlantic was not the most profitable of the airline's [routes. Whereas the profit per 1,000 CTMs was, in 1966-67, i £26.2 for the airline's southern region, and £24.5 for the eastern region, it was only £8.6 for the western region. BOAC had, during the hearings, recalculated the estimated financial results of both British Eagle and Caledonian to make allowances for various items which in BOAC's view had been left out, or wrongly assessed. Included in these recalculations were, for instance, the effects of pro-rating (that involving the effect, representing an average reduction of about 6 per cent in the revenue on the North Atlantic, of IATA-agreed lower fares for through tickets to and from "beyond" points), of the different estimated proportions of children among the passengers, of some more likely lower load factors and of the revised landing/technical service charges at Heathrow London. Needless to say, the calculations showed the estimated results of the two independent airlines in a distinctly poorer light. Following questions about the inevitable falliaway of Caledonian's available charter capacity as the transatlantic schedules were built up, Mx Adam Thomson, the airline's chairman, had earlier said that an extra jet unit might be 'added. This could 'be a secondhand early-type 707 bought for a comparatively low price, or leased. This addition would permit the number of charter flights to remain at, say, six or seven a week. Mr Thomson also explained the reason for the leasing of Caledonian's first -320C because of a delivery delay from the original May date to July 1967. This late delivery meant that it would have arrived too late to be planned into a summer inclusive-tour programme. The lease to Flying Tiger was for 11 months, which meant that it would be available again in June this year—which would be in adequate time for use on transatlantic charter work in 1968. Caledonian plans to operate through Prestwick after the first year and then only with two services a week. Asked what he would do if the ATLB decided to grant a licence on the stipulation that Prestwick must be served sooner and at higher frequency, Mr Thomson said that the services had been planned for the best results and it would be necessary to reconsider the situation in the light of any revision demanded by the ATLB. Mr V. C. Slight, representing the Scottish Council, Develop- ment and Industry, also gave evidence in amplification of a letter of support for Caledonian. He Said, in effect, that Scotland needed more direct transatlantic services and that any increase in frequency was acceptable. An attempt made by Mr L. N. JJebchick, for Caledonian, to [The initial flight of the first HS Trident IE-140 for Channel Airways was made on February 13 by Mr Pat Fillingham from Hatfield. [ <ms variant of the IE for Channel can be laid out to accommodate up to 139 passengers _ , . , _
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