Evening Post. MONDAY, NOVEMBER 18, 1929. FLYING FINANCE: "RAFTER YOU"

Evening Post, Volume CVIII, Issue 121, 18 November 1929, Page 10

Evening Post. MONDAY, NOVEMBER 18, 1929. FLYING FINANCE: "RAFTER YOU"

While agreeing with Wing Commander S. Grant-Dalton that the term "air-mindedness" is over-worked and has even become "hateful," we must at the same time insist that the condition which it represents is one that New Zealanders badly need, and to which they have not sufficiently attained. , But that they are beginning to respond to the call, and that the momentum of their response is increasing, was. convincingly proved by the attendance and the interest caused by Saturday's aerial pageant. With a new aviation ground, a new aero club, and an improvised organisation, it was an ambitious thing to undertake such a pageant; and, after hearing all the criticisms-of-detail that have been made, we still feel that this initial effort has been a wonderful success, moral as well as material. Anyone who saw that gathering and display on Saturday afternoon must fee! that the long-delayed "air-mindedness". is coming, or has come. The important thing is that the right spirit is there, both in the young men and in the general public.' It is now the task of Parliament and the local bodies to foster that spirit, and to find out what are the best means of fostering it. The Mayor of Wellington, Mr. Troup, is reported as saying: ■ ' I venture to predict that before another generation has passed, the airport will be as essential to Wellington as the harbour is to-day. The main object of the Aero Club is to educate the public to the advantages of aviation, and it also has to teach people to fly and to encourage the development of commercial aviation. In a country like this, already ten years behind Australia in flying, the development of commercial aviation has a defence aspect as well as an economic side. ■ The defence argumehts^for makings people fly—both' commercially and otherwise—are many, and have been often stated. Many of them are obvious,/and they need not be here recapitulated; but in saying what we are about to say concerning, commercial aviation, it will be understood that defence as well as economic considerations stand equally in view. Assuming, then, that both for defence and general reasons New Zealand wishes to be as other countries, and to run regular air services, thus coining results out of its people's "air-mindedness" (which can hardly be sustained without results), what is the first step to take? Should the Government subsidise commercial flying? Perhaps the quickest way to get to the heart of that subject is to quote a paragraph from WingCommander Grant-Dalton's interesting remarks, published in Saturday's issue: There were already a number of companies only too eager to get started. All they wanted was the money, and he thought that they would get it shortly. But they were looking for the Government to come forward and say, "We will give you so many thousands of pounds and a contract for the mails." But the Government, as they all knew, was "pretty tight" (laughter); and he was rather on the Government's side and thought that it should not come forward until the companies had made good. Then the Post-master-General would come forward and say, "I will give you the mails";, and everything would be all right. He did not think that it; was up to the Government to come forward with the money and mails first. Our reading of the above is that the Government should subsidise commercial flying, but that first of all the companies should "make good." But what does "make good" mean? Does it mean that the promoters of the company should set forth their whole plan of action, what capital they propose to raise, how they propose to spend it, what guarantees they will give of reasonable compliance with their service commitments, and such like? If that is the. meaning, then what is asked of the promoters may be within their competence and not unreasonable. But does the pre-requisite of "making good" mean a full subscription of a large capital by the public? If so, there may be difficulties. It is possible that the subscribing of capital may depend on some firm understanding as to the amount and conditions of Government subsidy or financial assistance to the proposed commercial flying services. If so, can the movement get ahead without some clearer definition of where the company and its services may hope to stand in the country's economy, and of what the Government will pay in order to balance probable initial losses in an undertaking-of national importance?

It will be noticed that Wing-Com-mander Grant-Dalton states that there are "a number of companies only too eager to get started," that all they want is money, and he thinks they will get it shortly. If he is correct in this financial opinion, then there would seem to be nothing to worry about. But the last issue (November) of the "New Zealand Stock Exchange Gazette," in an article discussing commercial aviation from the purely investment point of view, writes:

The investor must . . . decide whether commercial aviation can be established in the Dominion on a profit-mak-ing basis. Experience ovcrsoas gives rise to grave doubts on this point.

It comes to this, then, that if the onus

is on private enterprise to "make good" before the Government shows its hand, and if "making good" means full flotation and capitalisation, private enterprise is being asked to do something the practicability of which does not appeal to the above authority on investment. The problem seems to resolve itself into the following questions': Do general considerations—and defence needs— warrant the Government in subsidising commercial flying—in the same way as the Government subsidises sea services, and even (at relatively high cost) the recently revived South Island-Tasmanian-Victorian service? In times of deficit has the last-men-tioned subsidy as valid a claim on the national purse as a commercial aviation subsidy would have? If the need of a commercial aviation subsidy is admitted, then' should the subsidy • scheme precede capitalisation, or should the Government wait for private enterprise to "make good"? At present both seem to be marking time. There is, of course, such a thing as "hastening slowly,"' and there is also such a thing as two people waiting for" each other, vainly, after the manner of the Earl of Chatham and Sir Richard Strachan. Concerning "several schemes" of air exploitation, the "New Zealand Stock Exchange Gazette" writes that "for the most part they have come to nothing." But. the Government and the promoters still seem to be saying to each other, "After you!" '• This is a public question, and although a good deal may have been talked behind closed doors, it might be better for all sides if more was said within the hearing, of'the public. To do so would be in line, with "airmindedness," and there is nothing surer than that the pressure of public opinion is needed to weld an active air policy, especially one that may involve public subscription of capital. In the interest of all phases and all parties, there is need of more light. Wing-Commander GrantDalton's remarks are interesting, and in. some ways inspiring. But they increase the need of practically examining, from the standpoint of "airmindedness," the financial issue of commercial-aviation-in-our-time. Al- j ready it is well overdue, and to say' that the British isles are also backward may explain, but does not necessarily excuse.