CIVIL AVIATION: ASSOCIATE SERVICES (Hansard, 26 January 1949)

LORD PAKENHAM

During the debate on Civil Aviation held in this House on July 21 last, I announced that I had invited Lord Douglas of Kirtleside to investigate those sections of the Civil Aviation Act which enable the Corporations to appoint associates and agents. One of the main purposes was to review the arrangements under which charter companies were permitted, during the summer of 1948, to operate scheduled services as associates of the Corporations. I have given careful consideration to Lord Douglas's recommendations and I 351WA am now able to make a statement about the general policy to be adopted for the future in relation to these associate services.

There are two main issues: first, the policy to be followed in the granting of associate agreements and, secondly, the administrative arrangements for dealing with applications for such agreements. As regards the policy to be followed, Lord Douglas sees no need, at present, to amend the Sections of the Act which were the subject of his investigations. He has also suggested that, until British European Airways are in a position to provide all the scheduled air services in this country for which there is a justifiable demand, charter companies should, under certain conditions, continue to be allowed to operate certain classes of scheduled services as associates of the Corporation. I have decided to adopt this course because, although B.E.A.C. are steadily expanding their services, it would place an unjustifiable burden on them and on the taxpayer if they took over all these routes at the present time; and meanwhile I would not wish to deny the public the benefit of such facilities as the charter companies are prepared to offer in this field. I may mention that in 1948, when the same general approach was adopted, the passenger-mileage operated on scheduled services by the charter companies represented only about 3 per cent. of that operated on, internal services by the B.E.A.C. The other two Corporations are barely affected.

The administrative arrangements can and should be placed on a new footing. Lord Douglas has recommended, and I agree, that applications should be considered in the first instance by a body outside the Ministry, and that the Air Transport Advisory Council might conveniently undertake this task. This proposal is acceptable to B.E.A.C. and I am pleased to be able to say that the Air Transport Advisory Council have agreed to undertake this work. The Council will, of course, act in an advisory capacity only, since the ultimate responsibility for approving associate agreements rests, under Section 14 (4) of the Civil Aviation Act, with me as Minister.

In order that the recommendations of the Council shall be in accord with the policy of the Ministry, I am issuing a 352WA directive to the Council giving guidance in general terms about how they should treat applications for associate agreements. I append to this answer the terms of this directive.

The Air Transport Advisory Council will shortly be announcing the precise procedure to be followed by charter companies in making applications for associate agreements and, in the meantime, it is desirable that no further applications for such agreements should be made direct to the B.E.A.C. or to the Ministry.

Following is the Directive to the Air Transport Advisory Council referred to by Lord Pakenham: The following are the general conditions governing the approval by the Minister of applications by charter companies to undertake scheduled services on particular routes. When making recommendations to the Minister, the Air Transport Advisory Council are asked to see that these conditions are fulfilled:

(i) It is the Government policy, in accordance with the Civil Aviation Act, 1946, that the scheduled British air services to and from the U.K. and internally shall normally be undertaken by the British Corporations.
(ii) The Minister proposes, however, in continuation of the arrangements made last year and as an interim policy that in certain cases, referred to below, the Corporations should appoint independent operators as associates under Section 14 (4) of the Act to help them to perform their functions. No subsidies will be granted.
(iii) In considering applications for scheduled services on any route, it will be necessary to take into account the cost of supplying ground and navigational facilities, if not already available, and normally to avoid recommendations which would involve new expenditure of this character.
(iv) Maximum fares and freight rates for any services may, if considered expedient, be laid down by the Council. Fares and freight rates on routes operated by the Corporations, or that might be held to compete with such routes, shall not be less than those charged by the Corporations except in agreement with them.
(v) The period of an Associate Agreement should not normally exceed two years. The Minister reserves the right to terminate, without notice, any Associate arrangements made, if at any time it appears to him that the safety or other conditions laid down are not being carried out. No compensation will be paid to the operator when the service ceases.
(vi) The Airways Corporation concerned shall be given fourteen days to state its views to the Council on each application.
(vii) Operators must observe the safety standards with which the Corporations are required by the Minister to comply. The operators will also be required to make monthly returns to the Minister showing the 353 types and registration marks of the aircraft employed, and traffic data, as may be prescribed.
(viii)
1. (a) In compliance with Section 41 of the Civil Aviation Act, companies granted associate agreements must observe terms and conditions of employment in accordance with an agreement for the time being in force between that company and organisations representative of the persons employed or, failing such an agreement, not less favourable than the terms and conditions observed by the Corporations. In the case of agreements negotiated between a company granted an associate agreement and organisations representative of the persons employed, the terms and conditions of employment shall be not less favourable than those contained in agreements negotiated through the machinery of the National Joint Council for Civil Aviation.
2. (b) In the event that an award is given by the Industrial Court under Section 41 (3) of the Civil Aviation Act to the effect that the requirement contained in subsection (1) is not complied with, the associate agreement will be terminated forthwith. As and when action has been taken by the undertaking to comply with the requirements in accordance with the award of the Industrial Court an application for the renewal of an associate agreement may be addressed to the Air Transport Advisory Council.
(ix) Recommendations on applications for the operation of international services made in accordance with (xi) below will be subject to review by the Minister in the light 354 of the arrangements between the United Kingdom Government and the Governments of the countries concerned for the operation of scheduled air services.
(x) Associate arrangements that would hamper the planned development of the Corporations' services should not be recommended.
(xi) The Associate arrangements should, in general, be in respect of the following types of services:
1. (a) Internal "ferry" and "cross-country" services.
2. (b) Internal seasonal services, that is services to holiday resorts on routes not in operation by a Corporation, or services on routes where, because of holidays or other special circumstances, there are large fluctuations of traffic involving excesses of traffic demand over the capacity provided by the Corporation's air services.
Associate arrangements will only he approved in exceptional circumstances for the operation of scheduled services of other types.
(xii) If the Minister does not accept a recommendation of the Council he will, except in cases referred to in (ix) above, give them his reasons in writing.
(xiii) The above conditions may be varied by the Minister from time to time.

House adjourned at five minutes past seven o'clock.