CONTROL OF AVIATION

Poverty Bay Herald, Volume LXIII, Issue 19098, 20 August 1936, Page 9

CONTROL OF AVIATION

INJUSTICE ALLEGED ISSUING .OP LICENSES HEADING OF PETITION {Pep Press Association.) WELLINGTON, last night. Pacts relating to the licensing and control of commercial aircraft services under legislation enacted in October, 1934, and in particular the effect of such action on Netv Zealand Airways, Limited, and Mr. If. M. Mackay, the managing director of the company, were placed before a select committee of the House of Representatives to-day in', support of their claim for compensation. The petitioners, sotting out the history of their affairs, stated that New Zealand Airways, Limited, applied to the Transport Co-ordination Board for a license to operate on the main interisland service, putting forward as one of their chief claims that the company was one of the pioneer aviation companies of New Zealand and had invested a large amount of money in aeroplanes, equipment and organisation. It was further stated that Boeing machines were actually ‘on order. “GRAVE INJUSTICE.”

The Transport Co-ordination Board granted two licenses for the . intcrisland services—one to Union Airways

(Palmerston North—Dunedin), and the other to Great Pacific Airways {Auckland —Dunedin), and granted a restricted license to Xcw Zealand Airways. It was contended by Mr. Afnokny at the time that this license was of little or no value to his organisation.

The petitioners claimed that a grave injustice had been done them, that the general effect of the legislation and its administration had been to completely eliminate them from continuing tiie operations of any service to the community, that, in the process, the company had incurred heavy financial losses and the final issue must be the almost total loss of all capital and the effort with which the company had. over a long period of years, successfully pioneered in the greatest of all modern fields of_ transport—commercial aircraft services. A statement was submitted by the Commissioner of Transport to the committee to the effeet that it was correct that of the applicants for the trunk service licenses the Xew Zealand Airways was the only company actually in existence, the others being companies proposed to be formed. All the applicants, however, were on the same footing in one respect—none of them had previously carried .out regular services. FINANCIAL ABILITY A distinction, however, in the view of the board was. that, whereas the existing company lacked finance for its proposed new services, the intending companies brought evidence of financial ability. The commissioner then proceeded to deal in detail with file board's reasons for the findings they had returned. Evidence in support of the petition was given by Horatio Murdoch Mackay, managing director of New Zealand Airways. ; The witness said that, based on the esti- .

mated operating costs and the passenger lists of Union Airways Services, his company’s machines would have made a substantial profit, even by working at SO per cent capacity. In answer to the Rev. A. H. Nordmeyor, the witness assured the committee that had the license been granted, no difficulty world have been encountered in raising the necessary capital to develop the. proposed service. Ihe Boeing ]dimes could have operated successfully with the passenger traffic now offering. The witness disagreed with the opinion of the board that multiple-engined aircraft were essential for the Cook Strait crossing, because I lie distance between the islands was so short. Ihe Boeings had proved strikingly reliable in the United States and Canada. POSSIBLE. £15,000 LOSS The witness t.old Mr. Xordmoyor that it the license bad been granted to Xew Zealand Airways, the door would have been wide open to the Union Steam Ship Company to take shares in New Zealand Airways along with any other subscriber to the proposed increase of capital to £IOO.OOO. The witness added that, if the company were forced to cease activities tomorrow, its loss would a mount to £15.000. It. was acknowledged by the witness that the board was not expected, under the legislation, to grant a license to the applicant because he happened to have pioneered an air service. He claimed, however, that British justice should have actuated the board.

The hearing was adjourned until the morning.