MAIN TRUNK AIR SERVICE

Press, Volume LXXII, Issue 21866, 20 August 1936, Page 12

MAIN TRUNK AIR SERVICE

Injustice in Licensing Alleged HEARING OF COMPANY’S PETITION (PRESS ASSOCIATION TELEGRAM.) WELLINGTON, August 19. Facts about the licensing and control of commercial aircraft services under legislation enacted on October 31, 1934, and in particular the effect of such action on New Zealand Airways, Ltd., and H. M. Mackay, managing director of the company, were placed before a select committee of the House of Representatives to-day. In support of their claim for compensation, New Zealand Airways and the Commissioner of Transport presented detailed statements. The petitioners, in setting out the history of their affairs, said that New Zealand Airways. Ltd., applied to the Transport Co-ordinatl6n Board for alicense to operate on the main interisland service, putting forward as one of their chief claims that the company was one of the pioneer aviation companies in New Zealand, and had invested a large amount of money in aeroplanes, equipment, and organisation. It was further stated that Boeing machines were actually on order. The Transport Co-ordination Board granted two licenses for inter-island services, one to Union Airways (Palmerston North-Dunedin), and the other to Great Pacific Airways (Auck-land-Dunedin), and granted a restricted license to New Zealand Airways. It was contended „by Mr Mackay at the time that this license was of little or no value to his organisation. Financial Loss Claimed The petitioners claimed that a grave injustice had been done them, that the general effect of the legislation and its administration had been to eliminate them completely from continuing operations of any service to the community, that in the process the company had incurred heavy financial losses, ’ and the final issue must be almost a total loss of all the capital and effort with which the company had over a long period of years successfully pioneered in the greatest of all modern fields of t transportcommercial aircraft services.' A statement was submitted by the Commissioner of Transport to the Select Committee on the petitioners’ claim that it was correct that of the. applicants for trunk service licenses, New Zealand Airways was the only company actually in existence, the others being companies proposed to be formed. All applicants, however, were on the same footing in one respect—none of them had previously carried out regular services. The distinction, however, in the view of the board was that whereas the existing company lacked finance for its proposed new services, the intending companies had brought evidence of financial ability. The Commissioner then dealt in detail with the board’s reasons for the findings it had returned. Evidence for Company Evidence in support of the petition was given by Horatio Murdoch Mackay, managing director of New Zealand Airways. The witness said that, based on the estimated operating costs and passenger lists of Union Airways’ services, his company’s machines would have made a substantial profit, even by working at 50 per cent, capacity. In answer to Mr A. H. Nordmeyer, the witness assured the committee that had the license been granted, no difficulty would have been encountered in raising the necessary capital to develop the proposed service. Boeing aeroplanes could have operated successfully with the passenger traffic now offering. The witness disagreed with the opinion of the board that multipleengined aircraft were essential for the Cook Strait crossing, because the distance between the islands was .so short. Boeings had proved strikingly reliable in the United States and Canada. The witness told Mr Nordmeyer that if the license had been granted to New Zealand Airways, the door would have been wide open to the Union Steam Ship Company to take shares in New Zealand Airways, along with any other subscriber to the proposed increase of capital to £ 100,000. The witness added that if the company were forced to cease activities to-morrow, its loss would amount to £15,000. . It was acknowledged by the witness that the board was not expected under the legislation to grant a license to an applicant because he happened to have pioneered the air service. He claimed, however, that British justice should have actuated the board. The hearing was adjourned until to-morrow morning.