AIR COMPANIES TO MERGE

Otago Daily Times, Issue 23687, 20 December 1938, Page 13

AIR COMPANIES TO MERGE

IMPERIAL AND BRITISH AIRWAYS CORPORATION IN FUTURE SIMILAR TO THE 8.8. C. (From Our Own Correspondent) (By Air Mail) LONDON, Nov. 14. "British Airlines to be run like the 8.8. C." was a comment made following the announcement by Sir Kingsley Wood, Air Minister, that Imperial Airways and British Airways, both Government subsidised, are to be merged and replaced by a public corporation backed by the Government. This merger was foreshadowed by the Cadman Committee's report last March, which severely criticised Imperial Airways' administration. Announcing the decision in the House of Commons, Sir Kingsley Wood said: "The Government are of opinion that the most satisfactory instrument for the development of overseas civil aviation would be provided by the association of the two chosen instruments, Imperial Airways, Limited, and British Airways, Limited, under a single public corporation. "The Government therefore propose to recommend to Parliament legislation to set up a public corporation which will acquire the existing undertakings of Imperial Airways and British Airways. " Before the Bill is introduced the Government hope to fix up with the directors of the two companies a fair and reasonable price for each undertaking which could be submitted to the shareholders for approval. "If agreement cannot be reached the Bill will provide for the price to be fixed by independent arbitral tribunal." REVERSAL OF AXIOMS The Government's decision to take out of private hands the commercial air lines which serve the main Empire routes and the principal other routes outside Great Britain, it is stated, can only be regarded as a complete reversal of the axiom in-

vented many years ago that commercial flying must ultimately pay for itself. It will meet the criticism made in the last two financial years that part of the subsidy of Imperial Airways was being used to provide dividends for shareholders. It will also soothe the sense of injury in Imperial Airways caused by the prospect of losing its " shop window " through having to hand over the Continental services to another company. It should, above all, enable the new and comprehensive corporation to devote its attention primarily to keeping British air services in the forefront rather than to devising methods for making them profitable.

The corporation is likely to be modelled on the pattern of the 8.8. C. That is to say, it will be managed by a board or council nominated by the Government under statutory powers which will secure it against undue influence from a Government department, and will give it sufficient freedom of action to allow efficiency and a high standard of service to be aimed at. It is believed that this end will be given the first consideration.

Without such determination the scheme might have some dangers; but most of the criticisms of the operations of Imperial Airways in the past have related to the lack of speed in comparison with some of its competitors. 77 AIR LINERS Imperial Airways was formed in 1924, after taking over four pioneer lines, Daimler Hire, Ltd., Handley Page Transport, Ltd., Instone Air Line, Ltd., and British Marine Navigation Company, Ltd. It had then only a dozen aircraft, mostly singleengined types. To-day it has 77 four-engined air liners. Its route mileage at its formation was just over 1000. To-day it is nearly 30,00« J miles. British Airways was formed in 1935. Its operations had been previously carried on by four companies, Hillmans Airways, Spartan Air Lines, United Airways, and British Airways. It operates lines to Paris and to Scandinavian countries, and also the only British r.ieht air mail service in existence, that between London and Berlin via Cologne and Hanover, in conjunction with Deutsche Lufthansa. It is understood that Sir John Reith, chairman of Imperial Airways, and formerly director-general of the 8.8. C., will be head of the new corporation.