Britain’s Airline Policy

Press, Volume CVI, Issue 31134, 10 August 1966, Page 14

Britain’s Airline Policy

The British Government’s decision that one of the two State-run airlines should continue to “ fly British ” while the other may “ fly American ” suggests, at first sight, a compromise based on political expediency. British European Airways must continue to use British aircraft, although it would prefer American Boeings. The British Overseas Airways Corporation, on the other hand, has received permission to continue its traditional association with the American aircraft industry by ordering six Boeing 747 s at a cost of about £5O million. The instruction to B.E.A. will give the British industry new impetus at a time when it is feeling the effects not only of project cancellations but also of vigorous overseas competition, particularly from across the Atlantic.

It has long been debated whether the “ fly British ” policy, on which B.E.A. has built up a considerable reputation for efficiency and profitability, can be reconciled with maintenance of a leading position among world airlines. The answer has generally been—and the Government’s decision reflects it—that no other policy can guarantee a strong British aircraft industry and assure it of respect in the world's markets. It is, of course, conceded that the industry must export to live. Those who have argued on these lines have invariably emphasised that B E.A., with a more complex route structure than 8.0.A.C., has nevertheless made a success of using British aircraft and Britishtrained personnel. On the other hand, 8.0.A.C.’s beginnings were iinked with American industry. Its expansion, the argument runs, has followed American lines and has resulted largely from American innovations. American aircraft have been flown and serviced by staff more closely linked with the industry in the United States than in Britain. The British Government’s view clearly is that a policy thus balancing contrasting circumstances should be continued. It believes also, as indicated by the Aviation Minister in the House of Commons, that the controversial “super” version of the VCIO can be developed still further, both in seating and in performance, to enable B.E.A. to meet any challenge. It may be thought that, in Britain’s economic circumstances, the Government’s determination to continue B.E.A.’s British link reflects the only possible attitude. It will be over to the aircraft industry to show that a policy giving it a vital measure of protection in a critical period can be made to work, long-term as well as short.

As for 8.0.A.C., permission to buy Boeings no doubt has some balance-of-payments implications. But continuance of the American association has plainly been influenced by other considerations, chief among them the capacity of the airline to meet competition from American rivals. The generally accepted view is that North Atlantic routes can best be served by very large jets giving greater passenger capacity rather than increased speed. Pan American Airways has already placed orders for the “ stretched ” Boeing 747. Other airlines, 8.0.A.C. among them, will have been anxious to do the same —against the likelihood of being unable to compete successfully on a major route after 1969, perhaps the earliest year for the new aircraft to be in operation. Moreover, if fares are cut—and it is expected that they will be—B.O.A.C. may now feel itself in a position to meet the “ squeeze ” on equal terms with its competitors. The Government’s decision does mean protection for the British industry on a scale that could hardly be held desirable in anvthing but desperate economic circumstances. In effect, the industry is beine subsidised by home orders. It must r»snond bv nroducin® aircraft that will sell abroad. There can be no future for an industrv, short-term or lone-tenn. that cs>”not produce machines eoual to the best in the world for design, performance, and price.