§ Mr. Trotterasked the Secretary of State for Trade (1) what is his estimate of the annual number of additional transatlantic journeys which would have been made if Laker Airways' Skytrain Service had been introduced; whether he will study ways of encouraging alternative low cost service not requiring lengthy prebooking; and, in particular, whether he will seek a reduction in the reservation period required for advance booking charters;
(2) on what date he or his Department last expressed to the American CAB its support for Laker Airways' proposed Skytrain;
(3) what authority or support was given by him or his Department to Laker Airways for the purchase by them of DC-10 aircraft; and whether this authority or support was given in the knowledge that the company intended to use the aircraft for its proposed Skytrain service to the United States of America;
(4) what were the advantages for passengers his Department saw in Laker Airways' proposed Skytrain service to the United States of America during the period when the Department first granted 630W the airline designated carrier status and supported the proposal;
(5) by how much the proposed fares on Laker Airways' Skytrain service were less than those of other scheduled operators;
(6) whether he accepts in principle that it would be desirable to introduce for some prospective passengers the cheapest possible form of transatlantic travel; and whether he will make it his policy to sanction such a service as soon as possible;
(7) what were the unique features of the proposed Skytrain service of Laker Airways which were supported by his department; whether his proposals for the future of civil aviation will enable British Airways to provide such a service; and whether he will encourage them to do so or support them if they seek to do so;
(8) whether, if requested, he would be prepared to compensate Laker Airways following the withdrawal of his Department's support for their proposed Skytrain service to the United States of America and loss of their status as designated carriers, such compensation to have regard to the legal and other costs incurred by the company in furthering the project and to the commitments 631W entered into with the knowledge of his Department for the purchase of DC-10 aircraft to operate the service;
(9) whether the Civil Aviation Authority agreed with his proposal to prevent Laker Airways operating its Skytrain service to the United States of America; and, if so, whether it gave reasons for withdrawing its previous support for the project.
§ Mr. Peter Shore, pursuant to his reply [Official Report, 6th August 1975; Vol. 897, c. 236–7], gave the following information:
It is not for me to justify the balance between the advantages and disadvantages of Skytrain that my predecessor struck in 1972, when he decided to reject the appeal from British Caledonian Airways against the grant of a licence to Laker Airways. As the result of my policy review I am convinced that the disadvantages of Skytrain have come to outweigh its advantages. Since 1972 there have of course been major changes on the North Atlantic both in traffic growth prospects and through the introduction of APEX fares and ABC charters.
In seeking a scheduled service permit for Laker my Department has dealt with the State Department, not the CAB. Our representations were mainly concerned with the question of principle regarding the acceptance of Laker Airways as a designated United Kingdom carrier, not with arguing the merits or demerits of the fares and other conditions proposed for the Skytrain service.
I consider it desirable to make provision for the cheapest possible form of
Peak Shoulder Winter £ £ £ Laker Airways (2 single tickets) … 118.00 118.00 118.00 British Airways (APEX on scheduled flights) … 160.20 124.00 118.50 British Airways (ABC Charters) … 137.00 109.00 99.00 However, as my hon. Friend reminded the House in the debate on the Consolidated Fund (Appropriations) Bill on 1st August 1975, the Civil Aviation Authority made it plain that the Skytrain fare would require further consideration before the service was started. Under the terms of the Air Services Agreement the fare would also have had to be approved by the United States authorities. The actual Skytrain fare might, therefore, well have
632Wtransatlantic travel, consistent with economic operation, not only for some passengers but for all.
The essential feature of Skytrain would have been the combination of a low fare with the provision for last-minute booking: indeed, advance booking would not have been allowed. British Airways already offer facilities of this kind on some routes ("IPEX"). There is nothing in my proposals for the future of civil aviation which would prevent British Airways from seeking permission to introduce similar arrangements on the route between London and New York. My attitude towards such a request would depend upon the precise nature of British Airways' proposals and the situation at the time.
The object of advance booking for charter flights and for the lowest (APEX) scheduled fare is to avoid the malpractices which were such a feature of the "affinity" charter operations on the North Atlantic a few years ago, whilst still providing the lowest economic fare. For this and other reasons, the present advance booking period seems reasonable. It is, of course, open to the CAA to consider proposals for alternative lowcost services not requiring lengthy booking periods, especially if these were devised in such a way as to utilise seats on scheduled services that would otherwise remain empty.
The fares proposed by Laker Airways for their Skytrain service and the cheapest fares currently offered by British Airways on their scheduled and charter services between London and New York are as follows:
been higher. Moreover, a comparison of the fares alone leaves out of account the other conditions, for example, the absence of a reduced fare for children on Skytrain.
It is not possible to give a precise estimate of the number of additional journeys that would have been made if Skytrain had been started. However, on the same basis as the estimates already provided, notably the assumption that 633W there would have been two Skytrain services, one by Laker Airways and the other by a United States airline with equal capacity, about 25,000 additional return journeys a year would have originated on each side of the Atlantic.
Neither I nor my Department at any time gave Laker Airways authority or support for the purchase of DC10 aircraft. No authority was required for the purchase and importation of the aircraft, which were covered by open general import licence. As my hon. Friend explained in the debate on 1st August, the decision to remit import duty depended on quite separate considerations. The purchase of these aircraft represented a calculated risk on the part of Laker Airways, who saw an opportunity to buy them on favourable terms. The legal and other costs were incurred by Laker Airways in full knowledge of the risks involved. The company must have been well aware not only of the risks of appeal against the CAA decision and of applications for subsequent revocation of their licence, but also of the risk that the CAB would either recommend against the grant of a permit or attach conditions which would make Skytrain unviable. Laker Airways were already in dispute with the Civil Aeronautics Board over alleged infringements of their charter operator permit. Consequently I see no reason to compensate them for any loss which may be alleged to follow from my decision that the Skytrain service would not be allowed to start.
As my right hon. Friend mentioned in the debate on 1st August, there is no great difference between the CAA and myself over this decision. The CAA would have preferred to leave matters on the basis of its conclusion, in February 1975, that the Skytrain service should not be inaugurated until the North Atlantic market for air travel had resumed a healthy rate of growth and that this was unlikely to happen for at least 12 months. I decided, however, that rather than keep Laker Airways hanging on from year to year with very little prospect of being able to start their service, it was better to make the position plain and to encourage them to devote their energies to building up their transatlantic and other charter operations.