COSTLY LUXURY

Evening Post, Volume CX, Issue 39, 14 August 1930, Page 9

COSTLY LUXURY

AIR MAIL SERVICE

BIG LOSS LAST YEAR

GOVEENMENT ANXIOUS

One of the numerous costly blunders —the introduction of the East-West air mail service—made by the Bruce-Page Government during the years it held office and squandered the finances of the country is now reacting, and adding another burden to the Scullin Ministry in the finding of an annual subsidy of substantial proportions when it can be ill-afforded, says the Melbourne "Age." It is interesting to recall the introduction of the service.

Negotiations were entered into between representatives of the Bruce Government and West Australian Airways, Limited, with the result that the service waß brought into being early last year. A contract was drawn up under which the Government should pay the company a heavy subsidy on all mail matter carried. This contract is an illuminating document. It provides that the company shall be paid at the rate of 12s 8d per lb for all mails conveyed from.Adelaide to Perth and vice versa, but payment at this rate is to be made for a minimum of 6001b per trip whether it is carried or not. Up to the present the heaviest mail carried weighed only 1871b, so the Government is called upon to pay large amounts in subsidy for mail that is not handled. On the past yearfs activities the subsidy has amounted to £39,520, and all the Government has received in return is £8020 —an amount derived from the surcharge on all letters carried. DOUBLED. The contract further provides that should the company carry the minimum mail of 6001b the Bubsidy would be the same as paid on lesser quantities, but the Commonwealth would receive £25,740 in surcharge fees f and its loss would consequently be minimised. But should the company eaxry 8001b of mail for four consecutive months its subsidy would be doubled, and it would be paid at the rate of £79,040 per annum for the remaining period of the contract. This, of course, would involve the Government in heavier losses, as the surcharge would amount to only £34,332. The existing state of affairs as tar as the East-West air mail service is concerned has caused the present Government much anxiety. It cannot, however, effect any economies in this direction on account of the fact that there are still four years of the fiveyear contract to run, and the loss must continue, unless, of course, the company itself desired to cancel the agreement. This would be accepted by the Government with open hands. It holds that the service is unwarranted, as the route followed is almost identical with that of the transcontinental railway. Not only does the air service take rovenue from the Commonwealth in this direction, but the fact that it carries an average of only 1871b of air mail per weekly trip each way indicates that this particular phase of the activity is not greatly availed of by business people. The Government does not hide the fact that it considers the Bervice is something that is not required, but it would view the enterprise differently if it were serving the outback country.

AIR-LINE PARALLELS RAILWAY.

One of the greatest bugbears associated with the service as far as the Government is concerned is the fact that while the air service runs parallel with the transcontinental" railway at takes revenue from this phase of the Government's activities, and should never have been sanctioned by the Bruce Government. Passengers pay practically the same fare by air as by train, and the saving of time is. an inducement to many to travel by air. As a result, the Government not only pays large sums towards the maintenance of the air service, but it also has to bear the losses of railway revenue. These losses would be greatly minimised if there were no air service, as the number of passengers carried return to the aerial service approximately £10,000 a year. , During 1928-29 the profit on working expenses on the Bast-West line was £32,000, but in 1929-30, the year the aerial service first operated, there; was a loss of £25,000. It must be pointed out however, that the aerial service waa not th§ only contributory factor to this state of affairs—wash away s last year resulted in the train service beuig temporarily disorganised and involved loss of traffic. Since the present Government came into office it has considered the question of taking the control of air services out of the hands of private eaterprise, but, as already pointed out, it is in such a position that it cannot do this, as the companies concerned operate Tinder lengthy contracts. When possible, however, it has reduced the amount of subsidy granted by the Bruce Government, and in one instance it was entirely cut out when the contract expired.