§ 67. Rear-Admiral SUETERasked the Secretary of State for Air whether he is satisfied that the present agreement with Imperial Airways, Limited, is functioning satisfactorily, and is such as to ensure the development of British civil air transport on a sound basis?
§ Sir S. HOAREI am advised, on the basis of recent experience, that the sound line of development for regular air transport lines is in the direction of large high-powered machines, which can be run more economically and efficiently than a 1414 larger number of small machines of equivalent capacity. The Air Ministry found that the stipulation in its existing agreement with Imperial Airways, Limited, requiring the completion of a given mileage in order to qualify for the full subsidy, was threatening to discourage development on the lines described, as a simple mileage requirement puts a premium on the use of small machines. I have accordingly arranged recently with Imperial Airways to convert the mileage requirement of one million miles per annum into a composite requirement, which is regarded as a fair equivalent, of 425 million horse-power miles per annum; this will allow the mileage of high-powered machines to count more heavily than that of low-powered machines, and will thus encourage the company to develop towards a self-supporting basis as the subsidy decreases. The amount of the subsidy and the general provisions of the original agreement remain unaltered. A. supplemental agreement, modifying the terms of the original agreement as above, is being prepared, and when the necessary document is executed I will lay it as a White Paper, with an explanatory statement.