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Aviation History
1976
1976 - 0281.PDF
FLIGHT International, 2/ February 1976 397 AIR TRANSPORT UK aviation policy review: first in a long series PUBLICATION of the British Government's White Paper on future civil aviation policy dispels some of the un certainty clouding UK airline planning, but there is little sign that it will establish a stable system of air transport regulation in Britain. Although the White Paper states that the main provisions of the Civil Aviation Authority's new policy guidance "should remain substantially unchanged for a considerable period of years," the Secretary of State for Trade, Mr Peter Shore, has inevitably set a precedent for Government control over the CAA. Policy changes follow the lines indicated by Shore in July of last year. Designation of more than one UK scheduled airline on long-haul routes, the hub of the 1971 policy, is brought to an end, affecting services in Africa and South America. British Caledonian loses licences to serve New York, Los Angeles, Boston and Toronto, routes it abandoned in October 1974. Of active routes BCAL loses scheduled rights to Entebbe, Nairobi and the Seychelles, where it has hitherto competed with British Airways, and exempt-charter rights to Singapore. Lusaka in Zambia, previously a British Airways destination, becomes part of BCAL's West African sphere of interest. BCAL's South American sphere is consolidated with the addition of Caracas, Bogota and Lima. Georgetown in Guyana remains part of British Airways' Caribbean net work. The State airline's fears that it would lose its Eastern Caribbean service have proved groundless. BCAL retains its licences for Atlanta and Houston, in accordance with the no-competition principle, but in con trast with the spheres-of-influence policy. But these routes will remain inert for the time being, since the British Government has not designated BCAL for these services. The White Paper says that BCAL "will be the sole British airline designated to operate this route when it becomes available for international services." The White Paper gives no indication of what will make the routes "avail able," although BCAL seems confident that it will be able to operate the routes before 1980. Concorde excepted Another anomaly is the explicit exception of Concorde services from the no-competition rule. "The Government," the White Paper explains, "has borne in mind that it is of national importance that British Airways should be able to deploy its Concorde fleet effectively." Possible Concorde destinations within the BCAL sphere include points in South America and Nigeria (the latter en route to Johan nesburg). BCAL has suggested that it might lease Con corde time from British Airways for services within its sphere of interest. This might well be easier than the alternative outlined in the White Paper, with the State airline operating a Concorde service and "adequate arrange ments" being made to compensate BCAL. It is hard to see what compensation would be adequate for the intro duction of Concorde, with its tremendous passenger appeal, especially in the high-yield markets, and the inevitable "market leader" prestige it brings to any airline operating it. British Airways and BCAL are not too unhappy with the route transfers. "If you have to have a route swap this is probably quite a good package," comments British Air- I ways. BCAL "intends to make a success of the new policy." Prolonged discussions between the two airlines and the CAA have led to mutually acceptable figures being used in evaluating the effect of the swaps, and the net revenue lost by each airline is about the same. BCAL estimates that its East African routes are worth about £6-9 million a year; British Airways estimates a loss of £3-8 million on Lusaka and £3 million on the South American routes. But this is partly offset by the fact that British Airways need no longer worry about a British competitor in plan ning services within its own sphere, and the removal of the uncertainty engendered by BCAL's inert licences. Surplus capacity generated will be equivalent to about half a 707 for British Airways, a level which the State airline can easily absorb. Both British Airways and BCAL are engaged in refining long-term planning in the wake of the review. For the State airline important decisions include its eventual total requirement for 747s, the possible use of European Division TriStars and the choice of a future long-haul aircraft (DC-10-30R or L-1011-500 TriStar) to replace the VClOs. Foremost in BCAL's case must be the timing of a wide-body purchase. Skytrain at an end? Not entirely unexpected was the ending of Laker Air ways' designation as a London-New York scheduled carrier, with the instruction to the CAA to review the airline's Skytrain licence. Last July Mr Shore had said that the Department of Trade did not intend to allow Skytrain to go ahead. Immediately after Mr Shore's announcement Mr Freddie Laker accused the British Government of "yet another breach of confidence, yet another broken contract with British aviation." He said that Laker had been given a Skytrain licence, had had it confirmed on appeal, and had been designated on the route. Now it was all cancelled. "Nothing like this has happened before in the history of aviation." Mr Shore was, he said, making British business "look foolish" in the eyes of the world. Laker's Eximbank DC-10 loan of $46 million had been conditional on the Skytrain licence. "Now people will wonder what good is a British piece of paper." Laker did not know how the Government expected Britain to have an aerospace industry with only effectively one and a half buyers. Government actions were "killing innovation, maintaining the lata cartel and depriving the ordinary traveller of a fair deal." This was yet another example of the Government "eroding away the competitive stimulus of private enterprise." Laker read out a newspaper statement attributed to Mr Gerry Draper of British Airways claiming that the cor poration's ABC fares were not only £19 cheaper than Skytrain but bookable and did not charge extra for meals —so "British Airways doesn't want to be protected," declared Laker. DoT "had no figures" He said he had asked for a meeting with Mr Shore's officials to try to agree some of the basic figures, such as diversion from British Airways, the percentage of traffic originating in the USA, and the average fare yield. "It was clear from a four-hour meeting two days before this decision that they just did not have the figures. So how can they talk about a £6 million diversion from British Airways? We calculate 5-39 per cent in terms of traffic diverted from scheduled services and charters, most of the latter from our own charters. The figure of £6 million is wild to say the least. This is shabby and immoral." Asked whether Skytrain was now dead, Laker replied:
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