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Aviation History
1975
1975 - 2117.PDF
520 RIGHT International, 9 October 1975 AIR TRANSPORT UK air-cargo policy: four options FOUR possible options for the regulation of UK-originating international freight services are set out in a consulta tive document published last week by the British Civil Aviation Authority*. The study examines in detail the nature of the air-freight market, and the relationship between scheduled and charter air-freight services. The Authority hopes that its publication will stimulate wider discussion of this neglected area of aviation policy. It is emphasised that the document is intended only as a basis for discussion, is not CAA policy and in no way prejudges the outcome of any licence hearing. In a policy statement issued on January 31, 1975, the Authority said that it would be giving further consideration to the question of whether long-term licences should be confined to specific geographical areas and whether some control should be introduced to limit freight charter capacity. The suggested options are to remove the mini mum consignment size and no-consolidation rules on "split charters" but retain capacity control; to remove all regulatory controls; to keep existing controls; or to strengthen the present restrictions on split charters—by for example raising the minimum consignment size to 5,000kg to force charter airlines to carry more bulk con signments. Freight charters are growing in importance because they provide a moderately urgent service to many cargo shippers which "is a good deal faster than surface transport and a good deal cheaper than scheduled services." The volume of freight carried on charter services is still small—12-6 per cent last year—but is steadily growing. The significance of these operations is, however, evident when the total of revenue-hours flown by British all-cargo charter aircraft is considered; over three-quarters of the total is flown on charter operations. Freight charter services from this country are largely concentrated on a relatively small number of routes; they are thus of particular importance to the areas they serve, especially West Africa and the Middle and Far East. The CAA recognises the importance of freight forwarders and estimates that 80-90 per cent of all UK air freight is handled by about 150 forwarders; the fourteen largest handle between them about 35 per cent of all air-carried imports and 65 per cent of all such exports. "In practice, the minimum consignment size and no-consolidation rules are widely flouted," says the CAA. The charter airlines themselves do not engage in consolidation and in general do not know whether such consolidation has taken place. The CAA concludes that if minimum consignment size is to be retained as a restriction on split-charter operations, it should clearly be related to the pattern of traffic on the scheduled service which it is designed to protect. The study argues that the higher load factors achieved on freight charter services compared with scheduled services are a major'factor in explaining why their rates are lower. The higher costs of scheduled services in certain operational areas are roughly offset by lower costs else where. This suggests that if ways can be found of raising load factors on scheduled services, by the introduction of part-charters for example, scheduled services could prove fully competitive with charters. The scheduled airlines, working through lata, appear in the past to have devoted less attention to the development of a range of air-freight products than to devising different ways of charging for what is essentially a single service. The CAA study suggests that, as a general rule, scheduled air-freight rates should be based on the economics of all-cargo operation rather than on a marginal- cost approach to underfloor capacity on mixed passenger/ cargo flights. Nevertheless, in the interest of efficient use of resources efforts should be made to utilize underfloor capacity as fully as possible. Worldwide over-capacity seems likely to be one of the major problems facing the industry in the near future. While there are many reasons why it should be difficult to achieve high underfloor load factors (such as traffic-flow imbalance and loading prob lems), the patchy but consistent picture of low load factors and unprofitable freighter operations does strongly suggest a history of continuing over-investment in scheduled freighter capacity. British Airways, on the other hand, remains conspicuously absent from the list of Boeing 747F customers. The study argues that the greatest possible inducement to the use of underfloor space should be offered before all- cargo flights are introduced by any particular airline, but concedes that the trend is towards increased freighter capacity. The re-equipment decisions of the British independent cargo operators will by no means be made simpler by the publication of the study—indeed, if policy eventually does favour greater use of underfloor capacity the independent operators could lose out heavily. The view of one independent operator, IAS Cargo Air lines, is that the 1,000kg rule on charter shipments "should be scrapped and regulatory controls should be exercised through limits on flight frequency." The CAA tells Flight that it hopes to complete consulta tions by the end of the year and to publish a policy document by March next year. » International Air Freight Services, OAP 379, price £2-50. Available from the Civil Aviation Authority, PO Box 41, Cheltenham, Glos. The Seaboard World Airlines 747F flew 283 round-trips across the North Atlantic carrying an average revenue load of 135,3001b during its first year of operation. Four scheduled air lines are already using 747Fs and as many as 30 wide-body freighters may be in use on the North Atlantic by 1980. A 747F carries four times as much payload as a CL-44 and three times as much as 707 freighter; the underfloor capacity alone of a standard 747 is almost as great as that of a 707 freighter
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