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Aviation History
1968
1968 - 2769.PDF
fUCHT International, 28 November 1968 887 Mr Bamberg Speaks SPEAKING FOR THE FtRST TIME since British Eagle went intoliquidation on November 6, Mr Harold Bamberg, theairline's chairman, talked to Flight last week about the events leading up to what he called "this very great tragedy for the staff, the company, and for me." One of the few heartening aspects "of a dispiriting situation," he said, "has been the fantastic demonstration of the spirit we've always had in British Eagle. Even in this ultimate situation, the staff have tried to help the company, each other, and me. I think it is an amazing situation in this day and age— almost unheard of." He mentioned that British Eagle had never had a strike or industrial stoppage in its whole 20 years. Asked whether there would ever again be an airline called British Eagle, with him as chairman, he replied after a pause: "That is a very good question. That's what the pilots asked me. I would like time to think about it. It would be a pretty formidable task. If we did reconstitute, it would have to be on sound commercial and financial lines. I want to make it quite clear that I could not contemplate accepting the offer of the staff to use the Pension Fund in any way as collateral for a loan. This is quite out of the question." He said he had let this be known within the company. Mr Bamberg said that the UK airline business, particularly the private sector, had many problems. "It may be right to reconstruct another airline out of Eagle but we have got a lot of clearing up to do first. My first task is to protect the assets and to help the liquidator. We have to wait for Edwards and for the right financial environment. There are a lot of people outside who would like to see British Eagle reconstructed. I still believe, even after all this, that there is not only a place for, but a need for, a private enterprise alternative to the state airlines. British Eagle for many years has been arguing about many things—licensing, the investment environment, and so on—and it hasn't been easy. It's like rowing a coracle against the tide." Withdrawn support Negotiations had been started in March 1968, he went on, with two banks, Hambros and Kleinwort Benson. On the night of Wednesday, October 30, everything had been completed. "Hands were shaken, good humour prevailed, and then came the announcement of the revocation of our Bermuda/Bahamas IT licence." Immediately one of the banks withdrew (Mr Bamberg would not say which) and the other followed. He did not think that BOAC's appeal had been malicious or that the announcement of the revocation had been timed to embarrass Eagle's financial reconstruction. He just assumed that this revocation had led "to a loss of confidence in the system, and in me." He agreed that he should have told the banks about the revocation. But the licence concerned counted for only 1,000 hours out of the total 37,0OOhr 1969 programme —and he had not told them either about the fact that they had obtained licences from the Bahamas authorities for services to New York and Canada within the same few days. Asked whether the banks had withdrawn because they thought that there were inadequacies in Eagle's management, Mr Bamberg said: "The banks said that we were production- orientated, though I don't really think we were. Certainly we produced a good product, but we were market-orientated." Had they asked him to step down? "No, there was no suggestion that I should step down." They were going to put in a vice- chairman and another director. The proposed deal was, Mr Bamberg explained, both short- term and long-term. Eagle had had a bad year and neededs hort-term finance. The total that had been agreed was £1.75 million, plus a further sum for 1970 when two more One-Elevens had been scheduled for delivery (April and May). Most of the £1.75 million was to finance the coming winter trough. He himself was putting up £250,000 of his own money "-h packaSe (included in the £1.75 million). This was in ion to the £l million shareholding he had in the company. Mr Bamberg said he had told the Board of Trade about the situation on November 1. The matter was taken into "senior Government circles," and hope remained alive until November 6. Did he not feel that something could have been done for British Eagle along the lines of BKS and Cambrian, which •had been rescued by BEA, and Skyways, which had been rescued by the Transport Holding Company? "To be fair, this problem was to a different time-scale. It happened too suddenly for those sort of arrangements to be negotiated." Asked whether the irregularities in the Bermuda/Bahamas licences, which had been the basis of the successful BOAC appeal, had contributed to the sudden loss of confidence, Mr Bamberg replied "There were no irregularities within the terms of that licence." How had he felt when the collapse came? "How did I feel? Well, I have been in the aviation business a long time. You get into a certain frame of mind. It was a hell of a shock for a great many people, including myself. You might say particularly myself." Eagle Deficit of £6 Million? UNSECURED creditors of British Eagle, who are owed £5.6 million, are unlikely to recover more than about 5s in the pound, the airline's liquidator, Mr F. S. McWhirter, said on November 20. He was addressing the creditors' meeting, held, by reason of the large number of creditors, many of whom are the former employees, in a hangar at Heathrow. The estimated book values at November 8, he said were as follows:— Assets £x 1,000 £x 1,000 Aircraft, engines and spares 8,400 Less secured liabilities 4,700 3,700 Expenditure on leasehold properties 170 Plant, equipment, vehicles etc 270Investment in subsidiaries 410 Sundry stocks 350Debtors, deposits and debit balances 960 Cash at foreign banks and in hand 90 5,950 Less liabilities Creditors, preferential 500 Creditors, unsecured 5,600 6,100 Deficit on estimated book values: 150 Mr McWhirter stressed, however, that the final value of the assets when realised would be very much less than the book values. The ultimate deficit is thus likely to be at least £4.2 million, and it is believed that it may reach £6 million. Preferential creditors will be paid in full. He did not feel it right at this stage to hold out hope for the reconstruction of the airline, although every possibility would be considered. No complete list of creditors has yet been compiled, but some of the major ones are Rolls-Royce (£630,000), Esso (£300,000), Elliott Brothers (£36,000), Dunlop (£30,000) and Vickers (£10,000). Mr McWhirter said that with regard to the aircraft fleet it would be very difficult indeed to realise the net value. Only nine Britannias and two Viscounts of the 25- aircraft fleet were entirely free of charges. Mr McWhirter remarked that it was obvious that there was a special relationship between the British Eagle management and the former employees. He would set up an inquiry office so that cx-employees could consult with his staff, and he would deal with them as sympathetically as possible. He added
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