§ 23. Mr. Gowerasked the Minister of Transport and Civil Aviation what protest he has received about the recent agreement between British Overseas Airways Corporation and Central African Airways regarding the use of certain air routes; and what new applications have been made to the Air Transport Advisory Council in this regard.
§ Mr. WatkinsonI have received no direct protests about the recent agreement between British Overseas Airways Corporation and the Central African Airways regarding the use of certain air routes, but representatives of Hunting Clan Air Holdings Ltd. have asked to see me on this subject and I shall be meeting them later today. The agreement raises no question which calls for any application to the Air Transport Advisory Council.
§ Mr. GowerDoes my right hon. Friend really consider that this is a sound economic policy for public corporations to pursue? Does he not think it might be a dangerous precedent, which would enable foreign companies in future to get a commanding position in Commonwealth airlines simply by guaranteeing the profits of local companies?
§ Mr. WatkinsonMy hon. Friend might await my Answer to the next Question; but the fact is that this was the decision of a sovereign Government and had nothing to do with Her Majesty's Government.
24. Air Commodore Harveyasked the Minister of Transport and Civil Aviation if he will make a statement on the recent negotiations between Central African Airways and British Overseas Airways Corporation regarding air routes.
§ 27. Lieut.-Colonel Bromley-Davenportasked the Minister of Transport and Civil Aviation if he will make a statement as to the terms on which he has approved the take-over by British Overseas Airways Corporation of the Central African Airways Service from London to Rhodesia for ten years under which a guaranteed profit of £175,000 a year has to be given to Central African Airways; if he is aware that this arrangement will operate to the detriment of independent airlines; and if he will take action to give better protection to these airlines in future against competition from the nationalised corporations.
§ 35. Mr. Rankinasked the Minister of Transport and Civil Aviation what consultations British Overseas Airways Corporation had with him in regard to the take-over of Central African Airways: and if he will make a statement.
§ Mr. WatkinsonThe negotiations between Central African Airways and B.O.A.C. were initiated by Central African Airways on a purely commercial basis. Therefore B.O.A.C. did not need to seek my approval for the agreement into which they have entered; no expenditure from public funds is involved. I was, of course, informed by the Chairman of B.O.A.C, that negotiations had been opened by Central African Airways.
The services of C.A.A. between the Federation of Rhodesia and Nyasaland and the United Kingdom have for some years been operated in pool with B.O.A.C. I understand that, under the new agreement, B.O.A.C. will operate on behalf of C.A.A. the latter's share of the pooled services under financial arrangements which will yield to C.A.A. over the 10-year period of the agreement a total revenue of £.1.75 million. B.O.A.C. have assured me that in their commercial judgment this sum is within the earning capacity of the pooled operation of the route.
I understand that the civil aviation authorities in the Federation considered both the proposal put to them by C.A.A. for this arrangement with B.O.A.C. and the alternative scheme proposed to them by Hunting Clan Air Holdings Ltd. The choice between them was entirely a matter for the Federal Government, and not in any way for the United Kingdom Government. For reasons which have been 399 stated by the Federal Government they preferred the arrangement between C.A.A. and B.O.A.C.
Air Commodore HarveyIs my right hon. Friend aware that there is considerable uneasiness in the way this deal has been brought about? Is he further aware that it is very questionable, under Sections 3 and 8 of the Act, whether the Corporation is within its right in conducting such a deal? Would my right hon. Friend, in order to elucidate the matter, publish a White Paper or at least full details concerning the deal?
§ Mr. WatkinsonI am grateful to my hon. and gallant Friend for putting down this Question. It has enabled me to make a clear statement of the position which, I think, when he has studied it, will show that this is not a matter of concern to the Government in the United Kingdom. It is the decision of a Sovereign Government in Africa, one which they are entitled to take, and one which does not concern me.
§ Mr. RankinWould the Minister not agree that the terms which have been agreed to by B.O.A.C. are somewhat over-generous in view of the fact that this firm was not in a very happy state?
§ Mr. WatkinsonNo, Sir, I understand that the terms agreed to are a very small proportion of the total revenue which B.O.A.C. will secure by this deal and, as I said in my Answer, in their commercial judgment show them a good profit.
§ Mr. Farey-JonesIn view of the public reaction to this, would my right hon. Friend kindly indicate to the House whether there has been a change of attitude or not in his Department to the private enterprise contractors?
§ Mr. WatkinsonI am glad to answer that question. There has been no change of attitude on my part or on that of my Department to private enterprise airlines. Indeed, I hope before long to bring to this House proposals which, I think, will be of value to the private enterprise airlines.
§ Mr. BeswickIs it not a strange thing that the criticism of this deal comes from precisely those people who have been criticising the Corporation for not expanding its share of the world traffic? 400 Secondly, ought not this deal to give some satisfaction in that there is to be assurance of continued co-operation between the developing part of Africa and the United Kingdom?
§ Mr. WatkinsonMay I say—because I think that in this I shall carry both sides of the House with me—that air transport is the travel of the future, and that this country has to lead in it as we have led at sea. This means that in my job I must try to keep a fair balance between the Corporations and private enterprise, and that is what I propose to do.
§ Lieut.-Colonel Bromley-DavenportIs it not rather extraordinary that a company which has been making a loss of £350,000 a year should now be guaranteed a profit over ten years of £175,000 a year, and will this not represent a loss to someone of some £500,000 a year?
§ Mr. WatkinsonI do not think my hon. and gallant Friend has quite realised that this deal between B.O.A.C. and C.A.A. is not a take-over of the latter. It is merely that C.A.A. have leased their rights to run international services to the Corporation. The rest of their operations remain in the full control of C.A.A. The price which B.O.A.C. have paid, they tell me, on their best commercial judgment is a favourable one to B.O.A.C.