Troubles of Air Transport Industry

Press, Volume C, Issue 29656, 28 October 1961, Page 10

Troubles of Air Transport Industry

The warning of Sir William Hildred, tne directorgeneral of the International Air Transport Association, against the raising of airport and airways charges to unreasonable levels should be heeded in New Zealand which is apparently committed to something very like that at Mangere. Fortunately, apart from the Mangere agreement, New Zealand has handled this business better than most countries. Government charges on overseas airlines in many other countries are one of the principal reasons for the poor financial show ing of international air transport and one of the principal reasons why fares have not been reduced to the levels that would all the new capacity provided by fast, tireless jet aircraft Last year on a turnover of 5500 million dollars, world airlines (exclusive of those in Communist countries) had only a 1 per cent operating surplus from which to pay taxes, interest, dividends, and other charges An example of how charges have been quickly raised is provided in the United Kingdom, where there cave been increases in landing fees of 50 pet cent, in 195? 28 per cent in 1959, and 33 1-3 per cent this year Another example is a charge levied by Canada on North Atlantic traffic regardless of wnether it land;' in Canada. Sir William Hildred has to concede that airlines should make a reasonable payment for the facilities they use; but he has ad vanced several reasons why

Governments should not be too hasty One reason is that if fares are kept too high ths profitable tourist busmess that other branches of government are trying to foster will be discour aged Another is that airlines have no control over the design of airport terminals built partly for reasons of national prestige but as often as not are expected to pay for the capital cost A third is that basic air navigation facili ties would have to be pro vsded even d there were no commercial an; transport But surely the most persuasive argument of al is that by keeping up fare-

governments are stunting the growth of a business that could soon pay a much larger total amount at a lower unit charge. Government charges cannot be blamed for all the

financial troubles of the airlines. The introduction of jet aircraft has made the industry cram a decade’s progress into a few years. Sir William Hildred likens this to the plight of a small boy who is sent to school with a jacket three sizes too large for him. “I have “ little doubt that trafiic. “ like the boy will be burst“ing the seams of this par“ticular jacket long before “it wears out’, he says. If commercial aviation were allowed to grow naturally into the jacket it would, no doubt, eventually overcome its present difficulties. But now the industry has a new nightmare—supersonic aircraft have become a mat ter of declared national prestige for the Governments of at least two countries Most people will agree with Sir William Hildred that ‘if they want " prestige they must be pre- “ pared to pay for it. There ‘ wiL not be enough airlines “ and enough passengers to “ foot the bill Luckily New Zealand is too small a country to be affected directly by the supersonic race.