§ Captain McEWEN
(by Private Notice) asked the Under-Secretary of State for Air whether he has any information as to the progress of the negotiations with regard to the projected North Atlantic air service?
§ The UNDER-SECRETARY of STATE for AIR (Sir Philip Sassoon)
As has already been announced, discussions took place in Ottawa in November last between representatives of the United Kingdom, Canada, the Irish Free State and Newfoundland regarding the establishment of an air service across the North Atlantic. Arrangements were finally agreed upon subject to the approval of the Governments concerned, which has now been given, to enable survey flights to be undertaken and an experimental air mail to be established as soon as possible, to be followed eventually by a mail and passenger service on a minimum schedule of two flights a week in each direction. Discussions also took place immediately after the conference in Ottawa, with representatives of the United States Government in Washington with a view to assuring the fullest measure of understanding and co-operation with the United States in the development of trans-Atlantic flying. As a result understandings were reached based upon the principle of full reciprocity which it is hoped will bring about, as soon as practicable, the establishment of a trans-Atlantic air service connecting the countries concerned.
The main details of the arrangements agreed between the respective Governments are as follow:
Of the total annual subsidy required Canada will contribute 20 per cent. subject to a maximum of £75,000, the Irish Free State 5 per cent. subject to a maximum of £12,000, and Newfoundland a sum to be agreed between that Government and the United Kingdom Government; the remainder will be made up 1733 by the United Kingdom Government. In consideration of their contribution, the Irish Free State Government will be entitled to participate in the Empire Air Mail Scheme, if and when they so desire, without payment of further subsidy but only of the postal payment.
- 1. A joint operating company which will be responsible for carrying on the services will be incorporated at the instance of three companies, of which one will be nominated for that purpose by the Government of the United Kingdom, one by the Irish Free State Government and one by the Canadian Government. The company nominated by the United Kingdom Government will be Imperial Airways, Limited. The board of directors of the joint company will be nine in number, of whom three, including the chairman and managing director, will be nominated by the United Kingdom company, three by the Canadian company and three by the Irish Free State company. The capital
1732 of the joint company will be subscribed and held as to 51 per cent. by the United Kingdom company, 24½ per cent. by the Canadian Company and 24½ per cent. by the Irish Free State company.
- 2. In return for landing facilities to be granted to the joint company by the United States Government, Pan American Airways will be granted landing facilities by the Governments of the United Kingdom, Canada, the Irish Free State and Newfoundland; and that company will participate on a basis of reciprocity with the joint company in the operation of the services.
- 3. In the operation of the services all practical preference will be given to the direct route from this country via the Irish Free State, Newfoundland and Canada, but it may be necessary during an initial period to operate the services via Bermuda during the winter months.
- 4. Experimental long-distance flights and other necessary investigations will be carried out in the near future. The incorporation of the joint company will involve some delay and it has been arranged that experimental flights and investigations will be conducted by Imperial Airways Limited. The results of the experimental flights and investigations will be placed at the disposal of the joint company when it is established. It is understood that Pan American Airways will also be conducting experimental flights.
- 5. The control of commercial, technical and operating matters will be secured to Imperial Airways Limited through its stockholding and through the medium of the articles of association of the joint company, subject to the superior jurisdiction of the board of directors in questions of major policy.
- 6. During the experimental stage flying operations will be financed by the Government of the United Kingdom. When the joint company assumes responsibility for flying operations it will receive an annual subsidy from; the several Governments on an agreed basis.
7. Each of the four Governments concerned has undertaken to arrange for the provision of the necessary airport, radio and meteorological facilities for the transatlantic service. In connection with the general transfer of meteorological services to a new organisation being developed in the Irish Free State the United Kingdom Government will make an annual contribution of £6,000 to the Irish Free State Government on the basis of services rendered.
8. Each of the four Governments concerned has also undertaken to grant the necessary landing and transit rights within its own territory to the joint company and to Pan-American Airways. It is contemplated that unless otherwise determined by the consent of the four Governments such rights will be exclusive in respect of transatlantic air services for a period of 15 years; thereafter the question of exclusivity and the question of granting further financial assistance to the joint company will be reviewed.
9. An Inter-Governmental Committee on Transatlantic Air Services will be established, consisting of four members appointed respectively by the Governments of the United Kingdom, Canada, the Irish Free State and Newfoundland, to which will be referred for approval decisions of proposals of the joint company relating to transatlantic air services which may affect national policy or the relations of the Governments concerned inter se or with other Governments. All decisions of the Inter-Governmental Committee will be reached by unanimous vote.
§ Mr. MANDER
Can my right hon. Friend say whether this Agreement will be brought before the House for approval in accordance with the terms of the Air Navigation Bill?
§ Captain GUNSTON
If in the future it is found advisable to co-operate with the United States Government in this 1734 matter I take it this Agreement will not stand in the way?
§ Sir P. SASSOON
I do not think I could give a date, because the negotiations are still very much in their preliminary stages.
§ Mr. MONTAGUE
Will the Under-Secretary issue some more detailed statement in reference to the financial arrangements with Pan-American Airways.
§ Sir P. SASSOON
The financial arrangements with them are only on the basis of reciprocity. They do not contribute to this scheme. They have a similar service and, of course, they pay landing fees.
§ Sir P. HARRIS
Is it not a fact that these subsidies are subject to the control of Parliament, and therefore this House has control over the whole scheme?