AIRWAY LOSSES

Otago Daily Times, Issue 27505, 27 September 1950, Page 8

AIRWAY LOSSES

Substantial Reduction Predicted DEVELOPMENT DIFFICULTIES PA WELLINGTON, Sept. 26. Notwithstanding the fact that the corporation is operating comprehensive air services throughout the Dominion, including a number operated at considerable loss, and despite the impediments placed upon its activities by the use of remote airfields at Paraparaumu and Whenuapai, the budgetary position indicates that the operating losses, which reached £328,675 last year, will be substantially reduced for the current year, probably to a figure little in excess of £IOO,OOO after meeting all charges, including interest on capital.

This is stated in the annual report of the National Airways Corporation for the year ended March 31, tabled in the House of Representatives today. The report was prepared in July, before the Government announced its policy of selling the air services to private ownership. Revenue and Expenditure The operating and incidental revenue for the year ended March SI totalled £1,050,993 0s 2d, and ■ the operating expenditure, excluding depreciation and interest, totalled £1,152,727 10s 6d, giving a deficit of £101,734 Is 4d. To this were added depreciation, £182,520 6s 4d, and interest, £44,421 3s Bd, giving -’a total loss for the year of £328,675 11s 4d. The total revenue showed an increase of 15 per cent, over the previous year, passenger revenue was up by 10 per cent., freight and excess baggage by 40 per cent., revenue from carriage of mail 5.6 per cent., and charter revenue increased by 61 per cent.

in the standard and scale of operations. The board felt it necessary to meet the needs of the people of New Zealand by planning a network that would take some years to achieve fully its objectives and provide in the interim a\ valuable auxiliary in the sphere of air strength, The present standard and network did. in fact, fulfil these two paramount objectives and at costs comparable with other airline operators in other parts of the world. The extent to which the corporation has fostered and encouraged the use of air transportation is exemplified by the large increase in passengers carried and general public satisfaction with the standard of service provided, evident by today's high load factors. The board had developed the present network of air services under a defined policy. ' Whatever changes might be made, this policy would still be a vital factor in the standard of the service and its financial results. Subsidy System

Of the total operating revenue, passenger revenue contributed 80 per cent., freight and excess 5.6 per cent., mail revenue 4.3 per cent., and charter revenue 7.8 per cent. The report says the network of services within the Dominion remained unchanged during the year, but extra frequencies were scheduled where necessary to meet passenger demands, and night flying was introduced on a regular schedule basis for the first time in New Zealand last November. A high degree of regularity was maintained, and of the total services scheduled throughout the year 96.2 per cent, were flown. Objectives Realised

The report says the air services in New Zealand are going through a phase similar to those of other countries while a study of other forms of transport reveals that they, too, have received concealed and unconcealed subsidies during their development. Shipping and railways, long past their developmental stage, are in many cases unable to secure sufficient revenue to meet operating costs. It is probable that if a thorough investigation were made into road costs and annual maintenance, concealed subsidies in commercial road transport would be revealed also.

“ The growth of the services and the present patronage leave no doubt that this modern form of transport will continue to expand, especially when up-to-date aircraft, a reasonable stan dard of aerodromes and other essential facilities are available,” says the report.

One of the board’s main statutory responsibilities was to establish and operate a national service, whilst natural prudence had been exercised