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Aviation History
1973
1973 - 0022.PDF
18 EUROPEAN COMMON AEROSPACE MARKET no-one can avoid the plain fact that if there is to be a European aero-engine capability it has to include Rolls- Royce in a dominant position. We have all thought a great deal about the feasibility of political decisions to buy European, to provide a strong domestic market. I was very interested to read what the leaders' of the French aircraft industry had to say on this in Flight recently. Should we try to get a political decision that European national airlines and air forces should buy European? We have had a lot of experience of this problem in Britain. Too much Government pressure upon the national carriers can so easily produce a situation where the question of financial support for an allegedly non competitive aircraft reacts to the aircraft's disadvantage in the world market. But politicians can surely provide an atmosphere so that if a European airline wants to buy an American—or FLIGHT International, 4 January 1973 Russian—product rather than a European one then the most solid reasons must be given—just as with American airlines when they bought One-Elevens, Caravelles and Viscounts. Not only must very solid reasons be given for not buying the European products. The politicians must ask to see the evidence that the airline has fed in its requirements to European industry from the very earliest stages of its specification, and satisfy themselves that we in the aero space industry have produced the aircraft to those requirements. Whether we are German, French, Italian or British we have to recognise that competition from US industry is intense. The Americans at present have 83 per cent of the European domestic market. If we are to build up the strong domestic European market we need—and we all of us, including the French, agree that it is necessary—we really have to close our ranks and approach the future in a positive way. It would be a tragedy if nationalism brought about divided partnerships in Europe. Should Europe buy European? In "Flight" for November 9 leaders of the French aircraft industry, notably MM Vallieres and Lucien, said in so many words that European airlines must be made to buy European aircraft. One man who, as chairman of BOAC, pursued a policy of buying the home product, who was driven by Ministerial interference to make his celebrated "it's bloody crazy" speech, and who has also been a naval pilot and a leader of the aircraft industry is SIR MATTHEW SLATTERY. THE PROPOSITION that European airlines should be made to buy European aircraft re-opens the old controversy as to whether British state-owned airlines should be conducted purely commercially. In a memorandum* to Britain's Minister of Aviation in August 1962 I outlined the need for a number of policy decisions. The first asked "Is BOAC to be wholly com mercial in outlook or should it take account of other national and commercial interests and, if so, how is the corporation to be reimbursed in its accounts for any uncommercial activity?" I expressed the view later in the memorandum "that it will not prove realistic for the corporation to be purely commercial in its outlook." On January 1, 1964 (16 months later), the Minister instructed my successor by letterf: "I have sometimes been told," he said, "that there is uncertainty ... as to how far its role is commercial. . . . The Government do not consider that there is any solid justification for such uncertainty. . . . The choice of aircraft is a matter for the corporation's judgment. . . . "It is important that the interchange of views between the Government and the corporations should not blur the fundamental responsibility of the corporation to act in accordance with their commercial judgment.... "If the national interest should appear, whether to the corporations or to the Government, to require some departure from the strict commercial interests of the corporation this should be done only with the express agreement or at the express request of the Minister. How losses, if any, resulting from such a political decision should be presented in the accounts will depend on circumstances in each case." It was only a matter of weeks before BOAC's new chairman, no doubt in the exercise of the corporation's commercial judgment, expressed a wish to cancel a number of, if not all, the Vickers VClOs. The Government promptly vetoed such action without, it would seem, "blurring" the corporation's fundamental responsibility. In 1972 the corporations were robbed of certain well developed routes by Government order to provide an opening for the independents, seemingly without "blurring" fundamental responsibilities. In the same year BOAC ordered Concordes and BEA * The memorandum is published in full as Appendix 19 in Vol II of the "Report from the Select Committee on Nationalised Industries—British Overseas Airways Corpora tion June 9, 1964." H.M.S.O. t As above, Appendix 30. TriStars. I am not suggesting for a moment that this was not right and in the national interest, but were these orders "in accordance with their commercial judgment?" Who is fooling who? I am sure that we can assume that the members of the EEC will not, in the foreseeable future, readily allow the Americans (or the Russians) to acquire a monopolistic position in aviation, for reasons of defence, technical fallout, employment and prestige. The leaders of the French aircraft industry are being both logical and realistic in saying that European airlines must buy Euro pean aircraft. But even they provide a loophole big enough to fly a TriStar through by saying "on condition that they are of competitive technical quality, price and operating cost with American aircraft." We need have no qualms about technical quality. The designs of the Trident and BAC One-Eleven were novel and subsequently substantially copied by American manu facturers. The matter of price presents a much greater problem because it should include the amortization of development costs. The Americans have, at the present time, a much larger market both on account of their large airlines and because of their established position in overseas markets which include all the Western bloc of European countries. It is not a question of whether Europe can oust them, but whether Europe can claw back a large enough share for its manufacturing industry to be viable. It is going to take some doing and may take ten years or more. The cost of developing a civil airliner and its engines today is so vast that it is more than doubtful if any European manufacturer, or even group of manufacturers, can undertake it without government risk finance. This will have to be open-ended to the extent of assuring that the end cost to the customer is competitive with the comparable American aircraft. This is a tall order. One can imagine the horror with which this statement will be read by government departments, who will persist with the fiction that such a course is constitutionally impossible. But what are Concorde development or the repeated rescues of Upper Clyde Shipbuilders if not, in effect, open-ended? Of course there will have to be much better contFol of development costs and this is very, very difficult. It has not proved possible so far to estimate in advance with any precision at all the cost of developing a new aircraft. As taxpayers we will demand close government control, but such control should be quick and decisive. Delay in decision making is intolerable because delay always increases the cost The only thing worse than a delayed decision is a
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