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Aviation History
1969
1969 - 3104.PDF
656 AIR TRANSPORT fixed price. One of the smaller airlines asked Mr Norlin for a copy of the SAS articles of association after he had delivered his paper. It wants 747s but cannot afford them alone. The new wide-body jets could be mighty charter counter- strike weapons if 100-seat sections of their cabins were made available for marketing in charter fashion—perhaps even at £25 a seat, London-New York in winter, which is the sort of level the charter operators can offer. But first I ATA must agree on which marketing philosophy to pursue. Individual fares which carry the risk of empty seats? Or affinity group fares which are open to abuse of the definition of affinity? This is basically what 40 airlines are now trying to settle at Lausanne. Promising though the 747s and the wide-gauge trijets are in this respect, the fact remains that there is already too much capacity. Mr Norlin said that long-term forecasts mad© by "certain major airlines show some alarming trends." The dilemma came across in two not very widely separated passages in the annual report of the director-general. Existing orders for the new big jets, he said, will generate capacity which exceeds forecast growth, and "we therefore face a very real danger of over-capacity unless IATA airlines are able to carry a substan tial share of the rapidly growing charter/inclusive-tour traffic." Yet a little earlier he warned that "unless the present unfavour able financial trends are reversed . . . some increases in air fares . . . might be necessary." It was this statement that triggered FLIGHT International, 30 October 1969 1950 1960 1970 1980 Airliner prices in millions of dollars—from Mr Per Norlin's paper "World Airlines Co-operation" the industry from about 1975. Even Pan American has paid no dividend in 1969, is faced with heavy loss of 747 revenue, since June has been overtaken by TWA as number one North Atlantic carrier, and is reported to be seeking a merger with one of the big US domestic airlines. Mr Keck of United, the western world's biggest airline, told newspapermen here that "air transport requires size for efficiency ... the complexities that arise from size are far outweighed by the advantages of scale." A British airline Continued on page 657 Dr George Mueller of NASA: "No place on earth more than an hour from any other" last week's press reports about IATA's call for higher fares. Mr Hammarskjold noted that IATA's passenger load factor had fallen from 57.6 per cent in 1966 to 53.4 per cent last year; that in the same period profit as a percentage of revenue had fallen from 9.5 to 3.9; that revenue yield went down last year by 2.8 per cent while unit cost had gone up by 1 per cent; and that if government ATC and airport charges continued to go up at their present rate—20 per cent in the last ten years— they would be 6 per cent of total operating cost in 1975, compared with 4 per cent last year. On the latter point, incidentally, Herr Gerhard Hdltje of Lufthansa, the out going president, made the somewhat controversial comment that airline user charges should not be levied "on a profit- making basis." Mr Hammarskjold had some sharp words to say about Eurocontrol. "So far they have not controlled a single aircraft. They duplicate existing facilities and we are unwilling to continue paying for them." With traffic growth already slowing down, the 747s may look as empty as some of today's cinemas unless substantial cuts in regular fares—which are still the name of the game- are made. These aircraft are going to be difficult enough to finance even if they can be operated full. The capital required for existing orders for wide-body jets was estimated by Mr Hammarskjold at £3,700 million. One British financial expert at Amsterdam was of the opinion that for the first time in history a capital famine is going to slow down the growth of AMSTERDAM QUOTES Mr Per Norlin of SAS on co-operation: "In my opinion, however, too many pools pose a risk of reduced frequencies and diminished regard for the public's need . . . I would like traffic and sales to be free in the interests of our customers . . . I wonder whether the obligatory presence of chief executives might not be of value at traffic [i.e. fares] conferences." Mr George Keck of United: We are all making plans on the basis that there will be no supersonic flying over populated land-masses, which eliminates flying US transcontinental supersonically." Mr Knut Hammarskjold, director-general of IATA: "Air transport is now one of the world's largest employers . . . Preliminary analysis of the contribution of air transport to the United Kingdom economy shows that about 250,000 persons are directly employed . . . They generate an income flow to the economy of more than £460 million annually." Mr R. R. Shaw, technical director of IATA, in answer to a question about noise: "NASA recently did a study on the optimum design of engine from the noise point of view—eliminating inlet guide-vanes, and having low rotational speed of the front stages, etc, etc. They came up with an engine that looked like the KB.211, which suggests that that engine is very near the ultimate in terms of internal design." Mr M. J. Keyzer, Dutch Minister of Transport: "We shall welcome the day when the archaic system of bilateral bartering, if we can call it a system at all, is replaced by an international air framework, a multilateral system that will give every country a chance to develop its civil aviation." Mr K. G. Appusamy (Air-India) as chairman of the IATA Technical Committee: "Over the past few years four major housing developments have been approved near London Heathrow in an area which [a government- appointed noise committee] classifies as where exposure to aircraft noise reaches an acceptable level. These developments were in all cases refused permission by the planning authority, a refusal which was reversed by the Minister of Housing on appeal."
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