HJGHT International, 30 December 1104 AIR TRANSPORT... How to Regulate Domestic Jets ROBABLY no other civil aviation authorities offer such a comprehensive regular review of the air transport industry P in their charge as the Australians. The latest Civil Aviation Report for the year ended June 30, 1965, prepared by Senator Denham Henty's Ministry of Civil Aviation, contains a prodigious array of facts, figures and statistics ranging from figures on traffic and utilisations to revenues from car-parking facilities at major airports (23.33 per cent higher than the previous year) and the increase in the number of women pilots, of whom there are currently some 250 active. Especially interesting is an airline-by-airline breakdown of air-navigation charges which totalled £A2,572,160 plus a further £A95,600 from private owners, aerial work and charter operators. Of the international carriers, BOAC's share of these charges was, at £A314,000, second only to that of Qantas. Another example of the sort of information all too rarely made public to the interested taxpayer is a detailed breakdown (shown in Table 1) of subsidies paid for the operation of unprofitable services in remote and isolated areas. Table 1: A U S T R A L I A N A I R L I N E SUBSIDIES TAA Development services Essential rural services Ansett-ANA Development services Essential rural services Mac.Robertson Miller Connellan Airways ... Queensland Airlines ... Airlines of NSW Ansett Flying Boat Services . East-West Airlines ... 1962-63 £A 1963-64 £A 1964-65 £A 64.000 45,425 60,600 53.100 80,600 64,600 47,050 38,900 97,430 114,945 48.500 41.500 12.500 26,000 39,100 45,300 128,339 118,211 31.700 29,500 24,500 27,400 28,000 40,100 90,000 140,600 20.400 33,700 35,000 26.000 Sou res: Civil Aviation Report, Australia, 1964-65 MaciRotoertson Miller achieved a worthwhile saving in subsidy although coping with the extra costs of introducing a second F-27 into service. Connellan's cost increases, however, have not been matched by a corresponding growth in revenue and its 1964-65 subsidy was accordingly increased. An interdepartmental committee, which has been examining Connellan's economic problems, has now completed its inquiries and embodied its results in a report for the Australian Government. A good example of the "social service" type of route, which European governments do not have to subsidise, is the 482-mile Sydney - Lord Howe Island run operated by the Sandringhams of Ansett Flying Boat Services. A mishap to one of these boats while moored at the island and the resulting interruption of services emphasises the desirability of explor- ing alternative means of air transport to the island, and the Breguet Br 942 is being evaluated in this connection. During 1964 Ansett Flying Boat Services enjoyed the highest passenger load factor (74.6 per cent) of any Australian carrier, although the return fare of only £A34 18s to Lord Howe Island seems most unlikely to cover costs. TAA's higher subsidies were largely the result of declining revenues—brought about by drought conditions in parts of Queensland—and to some extent also of general cost increases. The big event of the year with which the report deals—and one for which Australians have had to wait six years after their Government refused TAA permission to order Caravelles in 1958—was the introduction of jets on domestic routes. This took place on November 2, 1964, when TAA and AnsettANA each put their first Boeing 727 into service, followed by a second aircraft each on December 9. Public response to the 727 was limmediate and provided a further stimulus to an already high level of traffic, even though a 6 per cent fare increase on all mainland routes, with effect from August 18, 1964 (the first increase since 1960) had been approved. Although traffic was booming, the airlines maintained, in seeking this fare rise, that they could not achieve an adequate degree of profitability unless revenue rates were higher. The Minister agreed that they would certainly be hard put to absorb the increased wage costs which had been incurred and were expected to arise during 1964-65. Traffic in 1964 again reaohed record levels; a total of 199,503,838 short ton-miles (16.4 per cent more than in 1963) was performed on Australian domestic routes—the highest rate of increase for the previous 15 years. This trend shows no signs of diminishing; figures for the major inter-capital routes for the first six months of this year show that passenger-miles were 18.7 per cent higher than for the same period in 1964, when they were 17.5 per cent up on 1963. Of particular interest to Britain, which faces the prospect of jet competition on its domestic routes soon, is the way in which the Australian Ministry regulates (the capacity which the state-owned TAA and private-enterprise Ansett-ANA may offer, not only on routes where the two compete but on noncompetitive routes and routes in the territories of New Guinea and Papua operated by TAA, Ansett-MAL and Papuan Airlines; of these some of the most important are competitive. These "Capacity Determinations," as they are called, fix the capacity-entitlement of Ansett-ANA and TAA for six-monthly periods in accordance with Section 12 of the Airlines Equipment Act of 1958, and the supporting calculations, together with the percentage traffic growths assumed, are always published in the Civil Aviation Report. The traffic growth assumptions for 1965 (covered by Determinations Nos 11 and 12) reflect the very buoyant traffic con- TABLE 2: DETERMINATION NO. 12 (COMPETITIVE ROUTES) Mixed-configuration aircraft Actual traffic carried from July 1, 1964, to December 31, 1964: TAA ... .. .. . Ansett-ANA Totals Traffic variation factors Estimated traffic, July 1, 1965-December 31, 1965* Revenue weight factors Factored estimate* ... Final totals* "GiVen the necessary past traffic figures and correct growth assumtions, these figures can be worked out... on a few sheets of foolscap" Revenue load factors (%) Capacity required* 50 per cent to each airline* Al l-cargo aircraft Passengers Freight Mail Freight Mail 36,227 33,374 4 158 4,044 1,013 946 2,886 4,743 124 142 69,601 8,202 1,959 7,629 266 1 16 80,737 10 80,737 1 10 9,022 08 7,218 1.10 2,155 1.5 3,233 1.25 9,536 1.0 9,536 1.10 293 1.875 549 91,188 10,085 65 140,290 70,145 55 18,336 9,168 • Traffic in thousands of ton-miles. Source: Civil Aviation Report, Australia, 1964-65