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Aviation History
1971
1971 - 1220.PDF
80 AIR TRANSPORT. . . A SPECIAL TAX CASE? A PLEA for more liberal tax allowances on the capital cost of aircraft for British airline operators was made in Parliament last week (July 7) by Mr Cranley Onslow, Conservative MP for Woking. In a debate on the Finance Bill Mr Onslow said that aircraft operators should be allowed a similarly free depreciation policy to that granted to the shipping industry. It was illogical, he pointed out, for the Government to encourage the spread of airline operation and at the same time to deny the industry equality with ship owners. He obtained a Government hint that the matter might be examined in the context of unfair foreign competition. Mr Tarn Dalyell (Lab, West Lothian) said that one of the troubles of the aircraft industry in recent years had been that it had had hardly any progress payments from aircraft operators. Any advantage which could be given to the operators would ease this problem. "One feature which emerged from the recent Rolls-Royce problems," he added, "is the extent to which that company used its sub-contrac tors for banking purposes." The habit of larger businesses of partially financing themselves by not paying their bills, pointed out Mr Maurice Macmillan, Chief Secretary to the Treasury, was not confined entirely to the aircraft industry. Referring to a suggestion by Mr Dalyell that foreign competitors of British airlines were enjoying certain tax advantages, Mr Macmillan agreed that the question of unfair competition should be examined. Such examination should in particu lar embrace the question of freight competition, "in the same way as flag-of-convenience and other methods pro vide unfair competition for our shipping operators." Mr Macmillan acknowledged that the development of air transport was "a matter of extreme importance for the future." Although some reconsideration may take place in due course, for the time being aircraft will under the Finance Bill be treated in the same way as other plant and machinery (except ships)—that is to say, 60 per cent of the capital cost in the first year and 25 per cent on the reducing balance will be allowable against income tax and corporation tax. MANCHESTER GATEWAY CREATION of a "Manchester gateway"—opening up routes from Manchester to Europe—is planned by the One- Eleven division of BEA. The project is hoped to be off the FLIGHT International, 15 July 1971 ground by next summer, although no destinations or dates have been finalised. According to divisional director Mr Roy Watts, "ideally [the services] will appeal to the businessman all the year round, and attract winter sports traffic in the winter and holidaymakers in the summer. "The destinations will be as near the optimum range of the One-Eleven as possible to give a low break-even point." This would probably mean destinations such as Oslo and Lisbon. "We are looking into ways of operating IT series at the weekend," said Mr Watts, "and we shall carry IT passengers on our scheduled services ... in this way we can make full use of our fleet." An £800,000 loss by the division is budgeted for this year but a profit of £1 -5 million is the target for the next year. BEA German internal services will become all-jet this winter with the phasing out of the last Viscount. Some 200,150 passengers were carried on the service during May, the first time a monthly total has exceeded 200,000. By next April, all Manchester operations will be jet. WHO FLIES 707s? THERE is some discontent within the 110-strong BEA Air- tours pilot fraternity, following the purchase of seven BOAC 707-436s by the operator (see Flight for July 8, page 44). It is probable that a number of pilots at present flying Airtours Comets will not get to touch the 707s, the first of which is due for delivery in January 1972 with the remainder to follow during the winter of 1972-73. An "open-bid" situation exists throughout the corpora tion, which means that senior pilots from BEA mainline may well be in a position to out-bid their colleagues in Air- tours by virtue of seniority. This could eventually result in a number of Airtours pilots having to move house back to the Heathrow area only 212 years after converting to Comets, when they originally expected to remain with BEA's charter sub sidiary for at least five years. However, Mr E. L. Killip, general manager for operations, thinks it premature to get too concerned about the problem which is unlikely to present any real difficulty until the winter of 1972-73. DAN-AIR REORGANISES AS a result of continued expansion, the British independent carrier Dan-Air has found it necessary to make some changes in its group organisation. On the aviation side, activities have been grouped under Dan-Air Services Limited, and a new subsidiary company, Dan-Air Flying Services Limited, has been formed to United Arab Airlines is now supplementing its Boeing 707 services to Eurof>e with its new llyushin ll-62s, one of which is seen in the departure area at Heathrow Airport, London '^WV^R,
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