EGYPT-KARACHI (SUBSIDY). (Hansard, 4 July 1928)

§ 31. Lieut.-Commander KENWORTHY
asked the Secretary of State for Air what subsidy for Imperial Airways, Limited, was allowed for in last year's Estimates and this year's Estimates, respectively, for the purpose of operating an air service between Bagdad and Karachi; and what reductions have been made in these payments on account of the non-establishment and non-operation of this service pending agreement with the Persian Government?

§ The SECRETARY of STATE for AIR (Sir Samuel Hoare)
As regards the first part of the question, the air service was planned in two sections, Egypt-Basrah and Basrah-Karachi, and the provision for subsidies for the latter section was £31,200 in last year's and £46,800 in the present year's Estimates, these sums being the aggregate of the subsidies for the maximum number of flights on the section at the rates specified in Clause 14 of the Agreement published in White Paper Cmd. 2758. As regards the second part, as a result of the Persian difficulty 1367 it was agreed with Imperial Airways, Limited, that the fortnightly service on the Egypt-Basrah section should be augmented for the time being to a weekly one and that the extra flights so made should be treated as though they were made on the Basrah-Karachi section for the purpose of earning subsidy. There was consequently no reduction of subsidy.

§ Lieut.-Commander KENWORTHY
Does the right hon. Gentleman not see that this policy tends to put a premium on Imperial Airways not pushing the extension of the scheme, as they make more money by not flying than by operating the service?

§ Sir S. HOARE
No; that is not the case. Imperial Airways are most anxious to open the whole section. It is only the Persian Government that stands in the way, and over it Imperial Airways have no control.

§ Lieut.-Commander KENWORTHY
Does the right hon. Gentleman not see that he is encouraging the company not to take active steps?

§ Sir S. HOARE
No, Sir. The company and the British Government are taking every possible step to open the whole route.

§ Lieut.-Commander KENWORTHY
The Government are.