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Aviation History
1969
1969 - 0106.PDF
84b AIR TRANSPORT... FLIGHT international, 16 January 1919 Caribbean withdrawal By M. J. HARDY RECENT EVENTS in the Caribbean—the takeover of Bahamas Airways by John Swire & Sons who, with associates, control Cathay Pacific Airways; the refinancing of British West Indian Airways (a whollynowned BOAC sub sidiary until November 1961) by US interests with TWA playing a part; and Adr Canada's financial stake in Air Jamaica (1968) Ltd—all combine to highlight what seems to be a dis turbing trend. This is the steady decline in the British (parti cularly BOAC) investment in Caribbean air transport at a time when this region has been experiencing a tourist boom, when group charters are putting it within reach of larger numbers of Britons every year and a considerable property boom has grown up around the wishes of those wanting to go and live in the West Indies. With the demise of British Eagle and its Bermuda and Bahamas subsidiaries the prospect of a substantial independent bid for a slice of this market will probably have to await the Edwards Committee report, although at least two independents are interested. Autair is planning big package-holiday opera tions to St Lucia, where the Court line group is building two hotels, to start in April 1970, probably using DC-8-63s, and BUA has been reported as being interested in the possibili ties of a subsidiary based in Barbados. At the moment Air Bahama (International), formed three years ago by a British financier and property developer, Mr Norman Ricketts, but registered in the Bahamas, is the chief representative of private enterprise. This carrier originally ordered two DC-8-63s and was licensed in 1966 by the Bahamas Air Transport Authority for a scheduled service to Luxembourg; this was finally started in July 1968 on a thrice- weekly basis, stopping at Bermuda eastbound and Shannon westbound, using a 707-320C leased from Executive Jet Avia tion. Air Bahama offers on this route a $262 (£108 16s) 21-day excursion fare which undercuts the lowest London-Nassau Skycoaeh tariff of £158, and still permits a saving to be made over the BOAC flight after completing the Luxembourg- London sector by BEA or Luxair. Although BOAC can offer greater overall frequency, it still has only four or five flights weekly to Nassau with Skycoach tariffs, and these, unlike those of Air Bahama, are for sale only to the residents of British territories. BOAC's failure Air Bahama's Luxembourg operation not only emphasises BOAC's failure to develop Skycoach fares and frequencies to the Caribbean after 1960, but even more so one of the chief difficulties of its ailing subsidiary Bahamas Airways— the lack of a profitable long-haul route to balance losses on its short-haul network. It has been a constant source of amazement that an airline serving such a wealthy and cli matically attractive part of the world should consistently return losses—£187,000 in 1966-67 and no less than £382,000 in 1967-68—yet scarcely less surprising has been the fact that Bahamas Airways has never had a route to New York or London, and it was left to Eagle (from 1958) and Air Bahama to provide services to North America and Europe. It would have been a relatively simple matter to have operated an exten sion of one of BOAC's New York flights to Nassau as a Bahamas Airways flight with an appropriate sales effort in the USA, or for BOAC to operate a Nassau-London service with 707s or VClOs on behalf of Bahamas Airways; a blocked space agreement similar to that between Pan American and Air Afrique would have 'been another solution. Yet for various reasons none of these answers was ever tried, and Bahamas Airways continued to suffer the economic penalties of a short- haul network, uneconomic services to the outer islands and intense competition over the heavy traffic Miami-Florida routes, which resulted in large losses. BOAC's feeling that the Bahamas Government has failed to give its airline the support that was its due, by taking a financial stake in it and, more especially, by refraining from licensing other carriers such as Eagle, is understandable. Yet the support accorded in the Bahamas over the past decade to Eagle and more recently to" Air Bahama also reflects a certain disenchantment with BOAC itself, and a feeling that if associates such as Bahamas are to be regarded as sources of feeder traffic for the Corporation rather than airlines of real importance to the regions they serve, .then they must be left to fend for themselves economi cally, with BOAC carrying the losses. It is by no means unusual for an airline to give technical and operational assistance to another, smaller carrier thou sands of miles away in another continent. Yet it did seem unusual for 'BOAC to admit defeat and hand over control to the Swire group and Cathay Pacific rather than to interests with experience of the Caribbean, and for several senior personnel to be moved (with, presumably, adequate financial inducements) from Hong Kong to Nassau to form, the nucleus of the new Bahamas Airways management. Mr Duncan Bluck, until recently commercial director of Cathay Pacific, and his team will doubtless do a good job in restoring the airline's fortunes, and with two One-Eleven 400s on lease pending delivery of the two 500s next June the jet-«quipment problem has been solved. With BOAC now retaining only a 15 per cent holding and with 25 per cent of the shares to be set aside for later public issue in the Bahamas, if, as is hoped, profitability is attained, both the 'British taxpayer and the Corporation have cause to be satisfied. Co-operative example Yet all this prompts the thought that had past Ministers and their civil servants possessed an intelligent understanding of what the independent/corporation relationship could have been and should have 'been, a degree of co-operation might have been fostered between Eagle and BOAC in the Bahamas as close as that between Air France and UTA in Africa, and particularly in Air Afrique, in which the French independent and State airlines, who have both leased equipment to Air Afrique, have an equal financial stake through Sodetraf (Socigte pour le Developpement du Transport Aerien en Afrique). A similar co-operative arrangement between Eagle and BOAC, perhaps even under a Caribbean equivalent of Sodetraf, might have dome wonders for Bahamas Airways in the past, and would certainly have been more sensible than the now-defunct BOAC-Cunard. Unfortunately the traumatic experience of the earlier co-operative arrangement with Sky ways during 1959-60, as a result of which BOAC had to buy back its 80 per cent holding in Bahamas Airways from the British independent and mount a costly rescue operation for BAL, doubtless put paid to any thoughts of a similar arrange ment with another British independent. Air Jamaica is another instance where the co-operative approach might have paid earlier dividends. Formed under a five-year agreement on August 27, 1963, between BOAC (33 per cent) in association with Cunard, BWIA (16 per cent) and the Jamaican Government (51 per cent), operations did not start until May 1, 1966, largely because of CAB delay in granting a foreign air carrier permit because Air Jamaica intended to wet-lease 707s from BOAC and 727s from BWIA. Now Air Canada is to participate to the extent of a 40 per cent financial stake in Air Jamaica (1968), which is being formed to take over the existing airline, and Air Canada will provide two DC-9s and a DC-8, as well as managerial and technical assistance, training for Jamaican personnel and a new maintenance base — altogether an investment of over £10 million in Jamaica's airline. This sort of sum would not be put into a carrier that was likely to make continual losses and,
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