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Aviation History
1968
1968 - 0959.PDF
917 FLIGHT international, 20 June 1968 T44 The longer nose dearly identifies the Series 200 Twin Otter for Trans-Australia Airlines, flying with three of the earlier models now out of production. The Series 100s are in the liveries of Quebecair (top left), Sudan Airways (top right) and Aerolineas Anahuac of Mexico capital. This had to be balanced against the expected accumu- lated loss of £11 million—and probably more—up to 1972 (including the Canadian routes). Furthermore, the loans on which Caledonian's first two Boeing 707s were bought had to be repaid over six years. There was a strong case, said the board, for granting Caledonian a licence for London-Chicago-Los Angeles, while refusing the New York applications. BOAC did not serve Los Angeles (and carried only a few thousand through- passengers a year to San Francisco); and it carried only ten per cent of the fast-growing Chicago traffic. Unfortunately it seemed that the route would be unlikely to stand on its own financially for several years. Moreover the chairman of Caledonian had thought the North Atlantic services "not particularly attractive" without the support of London-New York. About Caledonian's Canadian route application, the board said that they could not take action that would disrupt the existing partnership between BOAC and Air Canada unless the proposition under consideration offered substantial com- pensating advantages. The board did not consider that it did so; services were unlikely to prove financially successful within a reasonably short time, and they could be gravely detrimental to BOAC. On the British Eagle mid-Atlantic application, the ATLB felt bound, if it refused the London-Bermuda-Nassau appli- cation, to refuse the Bermuda-Chicago sector; and if it did not, there would be time enough before 1970 to consider the matter in the light of experience on the London-Bermuda- Nassau route. The British Eagle case for the mid-Atlantic was built on allegations of BOAC's inadequacy and on the volume and growth of traffic. The board said that they were offered no evidence that service suffered from the virtual monopoly of BOAC and Qantas, and noted that neither the Bahamas nor the Bermuda Governments, who had supported British Eagle applications in the past, had appeared in support of the present case. Current levels of traffic (30,000 passengers a year on London-Bermuda and 15,000 on London-Nassau) were far below those necessary for introducing a second UK carrier; and, while not accepting the British Eagle forecasts, the board did not therefore consider the question of growth. The board concluded its findings with some comments on considerations of policy arising from the case. "We have been conscious," it said, "that behind all the argument and evidence • lay a fundamental issue of national aviation policy." BOAC t had argued that the policy of all Governments since 1945 had been that BOAC should be the "chosen instrument" of this country on the North Atlantic, and should have a monopoly of scheduled services on these routes. Caledonian had argued that, in all probability, these proceedings had provided the last opportunity for changing this policy, and that by 1972-73 no privately financed newcomer would be able to launch an operation with the SSTs that would then be needed. "Both arguments are substantial." The board agreed with the Caledonian view that a second scheduled carrier would have to compete using the same type of equipment as that used by the market leaders, and rejected the British Eagle contention that there was a place for a second-level service at standard fares, using equipment slower than the SSTs and more expensive to operate than the "jumbo jets." As to the last chance to launch a second UK carrier, the ATLB thought that it might well have been missed already, "through no fault of the board," in 1961. "Our decision . . . might well have been different if either applicant had been able to convince us that, even in the circumstances of today, it could successfully establish its proposed operation. . . . Because of the national resources, and particularly the dollar resources, that would have to be committed to the undertaking, and the possibility of damage to BOAC, it would be wrong to authorise an enterprise that was unlikely to succeed. "We do not entirely exclude the possibility that a more convincing proposition may yet be put to us by some airline or combination of airlines before all prospect of breaking into the North Atlantic market has gone. But we accept the probability that if we leave BOAC's position on these routes undisturbed today, we do so for the foreseeable future." In 1961, said the board, BOAC's appeal against the grant of a scheduled transatlantic licence to Cunard Eagle had succeeded mainly because of evidence by the corporation that it intended to expand considerably its North Atlantic effort, and so to increase the UK share of this traffic. Supporting evidence related to the large number of aircraft ordered by BOAC for the purpose. But within a short while, under a new chairman and chief executive, and on Government direction, BOAC's plans had been cut back and their orders reduced. "Since then their share of the UK-USA traffic has steadily fallen." The ATLB did not criticise this change of policy; "but the record of British aviation on the North Atlantic since then might have been different if at the same time the Cunard Eagle licence had been allowed to stand." The situation was now different, and BOAC was financially stronger; "our decision means none the less that the nation's civil aviation destiny in the North Atlantic area will depend on BOAC's readiness to use their present strong position as a springboard for a determined effort to secure a much greater share of this lucrative market, and, we would add, on consistent Govern- ment support for BOAC in the pursuit of that policy."
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