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Aviation History
1988
1988 - 0278.PDF
AIR TRANSPORT UKCAA defines competition policy LONDON "Does it make sense to pur sue a multi-airline [national] policy?" asks UK Civil Aviation Authority economic policy chief Ray Colegate, clearly referring to the domi nating shadow cast over the air transport industry by the recent British Airways take over of British Caledonian. He then answers his own question: "We came to the conclusion that it does". Colegate is talking about a draft document setting out proposed civil air transport licensing policy which should come into effect later this year. The policy reviewers who produced it were sitting well before the BA/BCal takeover was proposed, but the review was suspended to allow it to take into account the final denouement of that saga and any Monopolies and Mergers Commission recommendations which might emerge from it. This is the most thorough review since 1972, Colegate says, of the manner in which the CAA should deploy its licensing powers. BCal's removal from the UK airtrans- I port scene will not have an entirely negative effect on industry competitiveness, according to Colegate. In his view the event "has removed a certain amount of the baggage of history" where airline regu latory policy is concerned. He refers to the fact that there is no longer a "Second-Force Airline" policy to administer or to resuscitate. There is no visible policy change which towers above the numerous subtle changes in policy orientation, but there is a significant proposal to make the available protection against unfair trade practice much more speedy in its effect. Licensing policy orientation moves away, Colegate ex plains, from the concept of protecting the airline for the good of the travelling public, and towards consideration of pure consumer benefit while letting the airlines look after themselves. "Where compe tition is muffled," Colegate says, "we will continue to regulate fares." Since the newpolicy takes as its base the idea that a multi- airline policy is in the best interests of the consumer, the following CAA statement comes as no surprise: "Given the disparities in size which now exist within the UK indus try, the maintenance of a [multi-airline] environment " and the long-term interests of users will inevitably mean that the Authority will on occasion need to give a perceptible measure of preference to airlines other than British Airways where a choice has to be made between British airlines". The statement may be no surprise, but BA would almost certainly appeal against any such action. The record of BA appeals to the Transport Secretary shows that the CAA's philosophies about how things ought to be in the inter ests of the consumer are often thrown out in the light of the law and the realities of a politi cal world. It would be natural and effective for BA to argue that the airline offering the best service should win the licence, and that, where an international route is concerned, the airline best equipped to provide an international service in competition with foreign airlines should prevail. The CAA proposes to make it easier to withdraw licences which are unused or seen to support a service which is unsatisfactory for any reason. It also hopes to achieve approval for an "expedited procedure for dealing with anti-competitive behaviour". The intention is to gain the power to act quickly enough to protect the complainant airline from the infliction of terminal damage before any constructive action to protect it can be taken. Colegate hopes that this will take the form of a sort of injunction power, which would require an airline accused of an unfair trade practice to return to normal practice while an investigation of the complaint is completed, a process which should take less than a month. BIA'S first MD-83 London Gatwick-based British Island Airways (BIA) has received its first McDonnell Douglas MD-83 on lease from International Lease Finance Corp. It is also the first ILFC MD-83 in operation. The aircraft will be used on holiday charter operations to Mediterranean resorts, and because of increased demand BIA has ordered a third MD-83 from ILFC. MARKETPLACE Aviation Sales of Florida has bought a Boeing 727-200 and two spare engines from All Nippon Airways. It has since leased the aircraft to Louisiana-based Gulf Air for its charter operations. Aviation Sales has also sold a Boeing 737-200 to COPA, a Panamanian airline. Air France has signed an order for 16 Boeing 747-400s for delivery between 1991 and 1996. It has options on 12 more of the type. The deal is worth about $3 • 5 billion. El Al Israel Airlines has ordered a third Boeing 757-200, for delivery in July. The airline already operates two of the type, both con figured for 191 passengers in two classes. The aircraft are powered by Rolls- Royce RB.211-535E4 engines. Orders for the 757 now stand at 240 aircraft. Loganair has taken delivery of a Pilatus Britten-Norman Islander, and has ordered another, with options on two more. Imsik of Turkey has also ordered two Islanders for its new operation in Bodrum, on the country's South coast. Norwegian charter and leas ing company Aircontact Group has ordered five Airbus A320s, for delivery between 1992 and 1994. The aircraft will either be sold or leased to airlines, probably in Western Europe. Aircontact already owns eight aircraft leased to various airlines. Nine Arab airlines have agreed to set up a joint aircraft purchasing group to acquire and finance aircraft during the next decade. The group, which includes Kuwait Air ways, Gulf Air, Royal Jordanian Airlines, Air Maroc, Iraqi Airways, and Tunis Air, expects to buy or lease about 200 aircraft worth $10,000 million. It has secured the backing of the Arab Economic and Social Devel opment Fund. Kenya Airways has ordered two Fokker 50s for delivery in late 1988. Already an F.27 operator, Kenya Airways is taking the aircraft as part of a fleet modernisation and expansion programme. FLIGHT INTERNATIONAL, 6 February 1988
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