END OF STATE CONTROL

Ashburton Guardian, Volume 70, Issue 241, 29 July 1950, Page 5

END OF STATE CONTROL

. N.Z. COMMERCIAL • AIRWAYS DISPOSAL TO PRIVATE INTERESTS (P.A.) WELLINGTON, July 28. ,As soon as private enterprise is in a position to take over and fulfil requirements, the Government proposes to withdraw completely from the field of internal commercial air services, said the Minister in Charge of Civil Aviation, the Hon. W. S. Goosman, to-day. This decision means that the Government proposes to grant ta some approved public or private company the rights conferred upon the National Airways Corpor- ’ ation by the New Zealand National Airways Act, 1945. The assets 1 of the Corporation will then be disposed of either to the future operating company or companies : or to some other purchaser or purchasers. , . . “Because of the complexities which the changeover would involve, the Government is now examining details of the conditions of the rearrangement,” said Mr Goosman. “As matters stand private operators are prevented from establishing air services, although they may be satisfied they would pay their way while the National Airways Corporation holds a monopoly and runs at a loss. Further, the Government believes that private airlines A .can be operated successfully, and that by giving them the opportunity to do so the taxpayer will be relieved of the present burden of National Airways losses. “In making this important decision the Government has been influenced by the fact that all the initial work in the development of air transport services in New Zealand was carried out by private enterprise. A great deal is owed by this country to those farsighted pioneer airmen who paved the way for regular air services and to the people who risked their capital in support of them. Such companies as Air Travel (N.Z.) Ltd., founded in 1934 by the late Captain J. C. Mercer, East Coast Airways, which operated between Gisborne and Napier, Cook Strait Airways and Union* Airways, founded in 1937, developed our pioneer air services in most cases without any assistance from the taxpayers and with a very high standard of safety. Of the above companies the only one which received any subsidy was Union Airways which, in its development period between 1937 and 1940, received subsidies from the Government. After that it operated Avithout any assistance from the Government and did so at a profit. I think it would be correct to say that Union Airways paid more to the Government in. taxes than it received in subsidies, and it had no accidents involving death or injury to passengers. Financial Burden “Having made the decision to withdraw from the operation of internal commercial air services as soon as satisfactory arrangements can be made for the sale of its assets and for the transfer of operators to private enterprise, the Government now invites proposals from interested parties for putting into operation this change of policy. What would suit us best would be for someone to come along and buy us out, lock, stock and barrel. That, however, may not be possible, and we will consider any proposal submitted. The services will continue to be operated as at present pending consideration of proposals. I am convinced that under private enterprise ownership and management, our airways system can be operated with the highest degree of safety and efficiency. Moreover, they should, under private enterprise, be able to make a substantial contribution toward the cost of ground services, aerodromes, etc., and return a reasonable profit to the shareholders.

“By the very nature of State control I am convinced that efficiency and economy never reach the same high standards as under private enterprise. It is our belief that under private enterprise there will be wider opportunities for our airmen and more scope for advancement on the part of all concerned in the technical and administrative branches, while future progress on sound lines will relieve the public of a serious financial liability.” , , Mr Goosman said that m other parts of the world air services were both publicly owned and privately owned, but it was significant that in the United States, which had a very highly developed air transport system, all the services were privately run. In relation to the enormous number of passengers carried the safety factor was very high. Passengers received the utmost in service and attention, and air travel throughout the United States was taken as a matter of course. Mr Goosman said that in New Zealand the air services would still remain under the close supervision and constant inspection of the Department of Civil Aviation, and all practices and precautions designed to promote public safety would be subject to the same high standards as now operate. . . ~ ~ ■( The Government’s decision, said Mr Goosman, was in conformity with the Government’s general policy of reintroducing private capital and private control into the field of commercial air transport. Likely Bidders Australian Air Lines are expected to be among the bidders for ownership of the National Airways Corporation. Some weeks ago Ansett Airways, of Australia, did make an approach to the Government, but the Cabinet had not then decided on the policy announced this morning, and the matter was held in abeyance. , The Ansett Company operates widely in Australia not only airlines but also hotels and road transport. It is especially interested in obtaining a licence for the trans-Tasman sei vice to Christchurch, and on June 27 registered a New Zealand company under Ansell Industries (N.Z.) Ltd., with capital of £IO,OOO in 8000 ordinary shares of £1 each and 2000 preference shares of £l. The objects of the company are set out as follows: “Conveyors 'of passengers and goods in aircraft or automobiles and incidental.” Other overseas companies are also likely to make a bid for the control of New Zealand’s internal airways even although losses incurred by N.A.C. in the last two years exceeds

£600,000, and the estimated loss for the current year’s operations is likely to be in excess of £150,000. Several bids for the National Airways Corporation are expected to be made to the Government. Possible interests willing to take over the corporation mentioned by aviation officials in discussion before the announcement included an Australian airline company. The Union Steam Ship Company, owner of Union Airways before the line was purchased by the Government in 1945, will consider the Government’s decision at its next monthly board meeting “if an offer is made to the company,” said the managing director (Mr J. N. Greenland. The board will meet early next month. The company was operating Union Airways at a profit ‘when the Government bought it. ’ Decision Welcomed “The decision of the Government to sell the internal airways service is warmly welcomed,” said Mr H. E. Schofield, president of the Associated Chambers of Commerce, to-day. “It can be fully expected that the* airways service will be run with more efficiency and economy than under State ownership because it is axiomatic that State ownership is not synonomous with either of those things. Although the people have owned the internal airways they have been a costly hobby, and the people will be losing nothing by placing them in the hands of private enterprise whose losses, if any, become its own affair and not a burden on the general community. There never was any justification for taking the internal services out of the hands of private enterprise in the first place; it was merely the blind pursuit of doctrinaire ideas.” NEGOTIATIONS BEGIN VICTORIAN FIRM’S MOVE (Rec. 12.5) MELBOURNE, This Day. Ausett Airways is negotiating to buy the New Zealand Government’s airlines. Mr R. M. Ansett, managing director of Ansett Transport Industries, announced tills last night.