Civil Aviation Policy

Part of the debate – in the House of Commons at 12:00 am on 26th February 1976.

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Photo of Dr Reginald Bennett Dr Reginald Bennett , Fareham 12:00 am, 26th February 1976

On the policy that we are debating today, I shall not surprise anyone if I say that I welcome the chance for a symbiosis between British Caledonian and British Airways rather than the obliteration of one by the other in the fashion of the film "Jaws". This at least is a matter for which we can be thankful, because it is possibly not in the manifesto of the party now in Government that this should happen. I for one welcome it. I do not doubt that there will be every chance for everyone to watch the relative efficiencies of the two companies in their operations and, therefore, that there will be every chance to show whether British Caledonian justifies the tolerance accorded to it.

However, I wish to make a few observations on the topic which appears to occupy us most in this debate, and that is the shameful withdrawal of the licence of Freddie Laker's Skytrain. The arguments have been rehearsed from all parts of the House and the documents have been referred to amply. I am sure that I am not being unfair if I say that every argument which has been adduced to justify the withdrawal of the licence seems shallow and not to be valid at all.

We have heard mention of £6 million losses to British Airways. However, if this is examined more closely we find that it appears to amount to £6 million reduced revenue, not losses on trading. As one who has had a share in some loss-making activities in this House, I speak with some feeling on this matter.

The interesting feature, however, is that British Airways do not seem to think that they will be expecting to lose money from this endeavour. The Secretary of State himself said that he could not say that there would not have been a firm prognostication of losses to the balance of payments if the licence had been granted. The commercial arguments and the financial arguments do not appear to be capable of being sustained from what has been put before us so far.

On the question of trading and passenger seats, we understand that the Laker Skytrain would produce 250,000 seats if a full load factor obtained. Against that, the seats normally offered annually by British Airways amount to 330,000. This, when compared with 250,000 of the Sky-train, looks like formidable competition, but surely it has been very much glossed over that with Pan American, TWA and the rest there are more than I million seats on the higher IATA fare structure from which some might be taken, but not necessarily off British Airways.

Certainly the cheapness of the new service is a matter which has not been given the serious consideration that it deserves. In the many years that I have been a Member of this House, I have heard the argument advanced again and again that proposals of this kind would only damage the existing services. It is always said that any cheaper services will damage the existing ones. It is never credited that they will be expected to bring their own new traffic, such as the mother-in-law of my hon. Friend the Member for Hastings (Mr. Warren) who otherwise might not choose to travel by a more expensive route.

The great gift which has been overlooked in this argument about Freddie Laker's Skytrain is that, unlike the ABC or APEX services which charge certainly no more than the Skytrain intended to charge off season, it was a very different matter at peak season when the ABC fare to New York would be £150, the APEX fare would be £176 and the Freddie Laker fare would still be £118. Surely it is in the high season that this would have generated the new traffic which we would like to see accruing to this country. Therefore, the arguments about capacity also fall to the ground.

I am left with the serious doubt that, by maintaining over-capacity and high-cost IATA-type routes, the arguments will not always be provided for cutting out low-cost services.

The pleading about the recession is justifiable on the evidence which has been printed. The same applies to the oil crisis. I found myself marooned in a distant part of the world when all the services of British Airways were suddenly removed because of the oil crisis. It was not a disagreeable part of the world, so I do not complain. But the oil crisis and the recession have done their damage. However, the evidence before us today indicates that that is now over and that traffic is increasing again. Therefore, I cannot feel that there are really sound arguments which justify this decision, which personally I resent. As a former psychiatrist, I can only attribute them to what we call rationalisation—that is, finding respectable arguments to justify conduct which is not altogether respectable.

I plead with the Government that they should not regard this as an irrevocable decision for all time. They should not close their mind for ever. If there is a sign of revival, it should be made possible for such services to be reinstituted, even if they do not help Mr. Laker financially.