Problem of providing low-cost air travel for the masses

Press, Volume CXII, Issue 32959, 4 July 1972, Page 15

Problem of providing low-cost air travel for the masses

John World Citizen, the ordinary man, salaried, is taking to the air. In his millions, he now demands, rather than asks, to be able to fly at rock-bottom prices, in safety and in comfort, to foreign countries for his holidays, his holidays.

This was the recurring theme of speeches made at the First World Congress on Air Transportation and Tourism, which was held recently in Spain. The 600 who attended included delegates from 54 governments and 47 airlines.

The Spanish Government, perhaps the champions in promoting tourism as a prime industry, sponsored and organised the congress. About 25 million visitors went to Spain last year, and Spain’s tourist receipts in 1970 were SUSI6BIm.

The peseta, not always a strong currency, is now substantially backed by gold and overseas investments. Of the legions of holidaymakers who migrate to Spain each year, 5.5 million travel by air, and most of them by charter flights.

As the moderator of one of the discussion panels of the five-dav Madrid congress, I tried to take an impartial view of the arguments put forward about satisfying the demands of the masses for low-cost air travel, which is the basic cause of current strife between the "scheduled" and the “non-scheduled” airlines. 21 computers The world’s busiest air routes of the North Atlantic, over which 11 million passengers were carried last year, inevitably became the scenario for much of the debate about the fares war which is being waged between the 21 competing scheduled airlines and the non-scheduled charter, or supplemental companies as the Americans call them.

I had some background, as I was involved in starting Singapore’s own charter airline — Saber Air — which, I believe, started the special low-fare contracts that are now available to London from Australia and New Zealand. For a short time, passengers went economy class to Singapore by the scheduled airlines and then continued to England on

charter flights offered by Saber.

There is, incidentally, a ’ sharp difference between a Icharter flight and a flight performed by a charter airline. As one American nicely put it at Madrid, “Any lil’ ole’ pilot with a current licence and the price of the deposit in his pocket can hire an aeroplane and carry out a charter flight.” A charter airline, however, is subject to the same flight operating rules and regulations as a national scheduled airline. The fundamental difference is that instead of selling tickets to individuals,

the charter company rents its aircraft to an agency or group which, in advance, ensures that it can fill most of the available seats and in this way offer low fares. Charter inroads Charter airlines usually are smaller and more streamlined than their scheduled rivals. They sub-contract for expensive services like simulator pilot training, and major engine and air frame overhaul. Thus they eliminate the depreciation and overheads involved in costly base equipment. Featherbedding has no place in the successful charter company—everything and everybody has to be cost effective. One of the most successful supplementals has a chairman aged 41; most of his executives are younger and have been airline captains or crew.

In numbers, the inroads made by the charter companies into the transatlantic passenger traffic does not seem to be crippling. Of the 11 million passengers carried on these routes last year, about one-third went on charter flights, and of these one million on charters operated by the scheduled airlmes themselves.

In the European region, however, charter flights attract a big majority of holiday travellers, and this trend has increased steadily during the last 10 years. But here again a number of the charter operators in Europe are either Government-sponsored or divisions of the corporations. The well-known Comet fleet of British European Airways, for example, is now used for holiday tours.

Rough struggle During this present northern summer both European and United States charter companies are going flat out to increase their grip on the ever growing bulk-air-travel market. But the scheduled carriers appear to be more concerned in countering the move by protests to Governments and by defending their high fare structure to the International Air Transport Association.

Meanwhile the struggle is rough. One supplemental company equipped with DCBs, and whose revenue last year was SUSSIm has gone to the wall. The president of Trans-World Airways has forecast that the 19 competing I.A.T.A. carriers on the Atlantic cannot fail this year to have a combined loss of less than SUS37Om. This situation obviously cannot continue. The Madrid congress heard all the moans and all the hopes of both sides. At the last minute I.A.T.A. boycotted the congress, but its director-general still gave his address, and its views were well aired. The scheduled airlines have an acknowledged responsibility to maintain essential regular services throughout the world; but some of these show troughs and peaks of profitability and I.A.T.A. claims that protection is needed against the charter company which threatens to cream off the traffic only in periods of high demand. Bulk market Unless this is done a viable operation cannot be

maintained. and either national subsidies will be required or some services cancelled. Some large United States airlines are at present in serious financial straits. The charter companies took a different line, and the congress, by and large, endorsed their views. They stated that I.A.TA.. airlines were licensed to carry out both scheduled and charter flights, which some had done with success, and that there should be free competition for the one air market. Charter companies, it was stated, suffered under many arbitrary passenger booking restraints which benefitted on one. They had pioneered and cultivated the new bulk air travel market, and statistics now showed that where charter flights had been successful, almost invariably scheduled air traffic had also increased at a high rate. They said the scheduled airlines were still competing with outdated ideas of luxury and overloaded time-tables. Few, if any, new Jumbo 747 s had revenue producing seats instead of luxury lounges, observation decks and bars, used only by the few firstclass passengers.

Plethora of seats They quoted the Official Air Guide which showed that on any Thursday of the next month a passenger wanting to travel from New York to London has the choice of no less than six jumbo jets (2040 seats) between the hours of 6.45 p.m. and 8.15 p.m. If this is not sufficient, there are a further three 747 s (1020 seats), all due to take off for London precisely at 10 p.m. No-one disagreed that there should not be a minimum level of essential scheduled services as decided by each nation, or that restraints should be placed upon charter operations if their activities — not excessive scheduled service competition — were shown to be affecting the maintenance of essential numbers of scheduled services.

Apart from this, the congress advocated much the same free enterprise in the air which always had prevailed on the sea. Unless this is permitted they were convinced that John World Citizen would not be able to fly at the low prices he wanted but still would be given what others thought he ought to want. Defining roles I rather agreed with them, and also with their recommendations that a new world conference is required to settle the best way of creating a balanced system of air transportation in which both scheduled and charter airlines would have defined roles.

The last such meeting was in reality the Chicago convention of 1944. Piston engined airliners then averaged 200 knots (if they were fast), and there were nations, now powerful voices in aviation, which were not invited to America at that time.

Air Marshal Sir Rochford Hughes is a New Zealander, recently returned from long overseas service to live in Auckland. He is a former commander of the Far East Air Force and, since his retirement from the Royal Air Force, has served as air adviser to the Government of Singapore. During a distinguished service career, Sir Rochford directed pioneering R.A.F. experiments and training in the modem concepts of allweather flying and at one time commanded the famous Farnborough air establishment As deputycontroller of aircraft at the Air Ministry, he was closely associated with the development and purchase of new aircraft He is a fellow of the Royal Aeronautical Society.