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Aviation History
1968
1968 - 0613.PDF
ift/GHT International, 18 April I9&8 591 BRITISH EAGLE'S CHAIRMAN INTERVIEWED [ On the occasion of British Eagle's twentieth anniversary, ! David Woolley took the opportunity to put some questions [tothe airline's chairman and managing director, Mr Harold Bamberg. \Ur Bamberg, is British Eagle likely to be the first British I independent to become a public company? I do not know the detailed plans of other UK independent Lirlines. It seems to me that we have a long way to go in j Britain before we have created the right conditions under which I it is possible to attract public investment on a long-term basis I and on the scale required. British Eagle has proved its ability as an airline operator; it has a high standard and operates at a low cost with reasonable profitability. I would like to see British Eagle go public at the right time, but we have other objectives as well; for instance, we are seeking to internationalise our activities—hence our interest in a new Swiss company recently formed. We seek to broaden the basis of our activities to improve our profitability and at the same time think in positive terms of public participation in our enterprise. ./...;; // British Eagle is granted its application for scheduled trans- i atlantic services, are you confident that it could sustain initial losses, particularly in view of the frequencies which it is | proposed to mount from the beginning? We have conducted detailed financial studies of our North Atlantic project, which include the initial development costs involved. In the event that the licence is granted, in the form in which it has been applied for, we most certainly will be able to sustain the development costs. As far as frequency is con- I cerned, we believe it is important to obtain full identity on this particular route, and that the initial frequencies are realistic having regard to the density of the market on the London/New York route. -.. ,: »....:• in view of the likelihood of these initial losses, would it not have been more advantageous to delay the application and to opply the airline's full resources to the Atlantic charter market? We are already applying the bulk of our long range jet capacity to the Atlantic charter market; we have to look ahead to anticipate likely developments and changes in the scheduled services fare structure. It could well be that there would •* greater integration between charter and scheduled-serviceac bvity than is currently the case. The whole concept of the Present form of licence may be changed, and we think it is important for us to obtain scheduled service certification and commence the operation as soon as possible. In the meantime ,,e "e actively pursuing the market that is open to us, namely ,e Atlantic charter market, and we are seeking to improvee barter certification which we currently hold. ' been suggested that British Eagle is under-capitalised, jecially within the context of proposed North Atlantic "°ns and the fleet that would be needed to maintain "ow far do you consider this criticism justified? ^ *n ev*dence to the ^T Transport Licensing Pers /nd 'n Part'cular °ur financial witness, a very senior has •. m a fading merchant bank in the City of London *ill b ^.at *f *e licence is granted, the necessary finance to ^, e Pr°vided to enable the proposed North Atlantic project PfoVd* cc" Under no circumstances would we contemplate Ueenc h *e capital and finance in advance of a suitable given b 8 8ranted- We believe that the positive evidence this n -y a leading merchant banker is adequate assurance on fores hPUS! y°U ^lave ^een a ProtaSonist of lower domesticUi recently you withdrew an objection to certain fare increases before the ATLB. Does this reflect a change of heart, whether because of rising costs, or for another reason? I am still a protagonist of low domestic fares, but there comes a time when, against the background of increased costs, it is necessary to increase fares; in my view we have reached that point recently. This does not mean that we will go along with applications for fare increases in the future. We shall relate the need for fare increases to our own cost levels, as we have always done. // has been suggested that the limited presence of the British independents on domestic routes, while increasing the stan- dards of service, may have done little to stimulate the amount of traffic. Can you comment on this, and give your views on the line which you would like the Edwards Committee to take on this subject? In my view it ds unfortunate that the policy of multi-designa- tion on the London/Glasgow route has taken place during a particularly difficult time in the British economy. I believe that our arguments that competition stimulates growth are still accurate, and in normal times this would be reflected to a far greater extent in the figures. We hope that the Edwards Com- mittee will see the benefits of dual-designation on high-density routes and we believe that any route on which there are more than 200,000 passengers per annum becomes ready for the introduction of a second operator. As far as international routes are concerned, our views are well known, and we would hope that on routes such as the North Atlantic the Edwards Committee would find that a second British operator could not only carry out a viable undertaking on its own behalf, but would considerably increase the British share of the market. How far do you expect to become involved in the hotel business in the next ten years, and will any such involvement be from necessity or from choice? We are already involved on a contractual basis in the hotel business, but we have sought to avoid management or financial problems associated with the direct running of hotels. We shall continue to seek special relationships with hotel groups as a matter of marketing policy. The degree of involvement will depend upon the circumstances of each case. Last year British Eagle resigned from the British Independent Air Transport Association, and subsequently the association ceased activity. What, if anything, should replace it? There is a strong case for the establishment of a national co-ordinating body in which various interests, including those of the airline operators, are represented. I most certainly believe that the airline portion of such an association should be fully representative of the industry. There is a real need for a representative body to deal with some of the major issues with which we shall all be confronted in the years ahead. It is possible that with a revised national policy a suitable structure fully representative of airline interests can be evolved. Looking back over the first 20 years of British Eagle, is there any one event which gives you outstanding pleasure? This is a difficult question, because British Eagle has been involved in many operations and many transactions, but I think my greatest satisfaction has been to see the rebirth and development of Eagle since that very difficult period in 1963 after the formation of BOAC-Cunard. The reconstruction and development of the company since that time has been so successful that it gives me and my colleagues the greatest satis- faction and pleasure. It has been difficult, but worthwhile; it is most satisfying to fight back from a very bad position to a period of growth and vitality.
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