The Press WEDNESDAY, MARCH 17, 1976. N.A.C.'s routes

Press, Volume CXVI, Issue 34104, 17 March 1976, Page 20

The Press WEDNESDAY, MARCH 17, 1976. N.A.C.'s routes

For some years the National Airways Corporation has been able to make a large enough profit from carrying passengers between the main cities to be able to provide services to a number of secondary airports. Some of the secondary routes have not been paying their way. Since the airline’s profit on the main routes has become marginal. N.A.C. cannot cover the losses on the secondary routes. This year the airline will make, at best, a miniscule profit on a big turnover. Fewer people are flying, and the airline's bills for fuel, wages, and airport dues are rising. Like other businesses, the corporation is in an awkward squeeze.

The airline cannot escape this squeeze by increasing fares yet again on the main trunk routes. These fares are already so high that some travellers are looking to alternative forms of transport and those who must fly for business or personal reasons are travelling only when they have to. The airline could attempt to escape the squeeze by charging fares for services to smaller centres which reflected the true costs of providing the services, but these fares would have to be so high that the few people using the services at present would almost certainly stop doing so. Services to secondary 7 airports might be maintained if the Government were willing to subsidise them by releasing N.A.C. from the requirement that it make a profit. But subsidies run counter to the policies of the present Government and often cause economic confusion even when they are applied in the name of regional development. The airline is left, in short, with no course other than curtailing services for which there is not a profitable demand.

The people in the towns which will lose regular N.A.C. services in the middle of the year will probably not be left without any air service at all. Small commercial operators will probably move in to offer forms of service using smaller aircraft. These will connect with N.A.C. services on other routes. Lower operating costs and overheads should allow the small operators to do what N.A.C. cannot do: to charge fares which travellers are willing to pay but which are also profitable. One question raised by the withdrawal of N.A.C. from several secondary routes remains outstanding. The monopoly which N.A.C. enjoys on the country’s main trunk routes has been justified on the grounds that it enables the airline to provide uneconomic services to secondary airports. If N.A.C. is no longer giving such services, at least one justification for the corporation’s monopoly disappears. Even so, anyone trying to argue for competition on the main routes will be hard put to it to make a persuasive case when N.A.C. is already struggling to make the main routes pay.