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230
( T H I S DOCUMENT I S
THE PKOE&TY OF HIS BiilTAlJHIC MAJJiSTY' S GOVMHMENT)
S E C R E T
Copy No
CP.
327
(27)
C A B I
N E T
OOIflglTTES CN THE FUTURE Ojf BHITISH COMMERCIAL A I R THAN SPORT.
1.
At t h e i r
52 ( 2 7 )
meeting
Conclusion 8 ) ,
memorandum by t h e
CP.
238
British
on C e t o b e r
(27)
) dealing
appointment
of
composed
follows:-
State
Committee
Referenoe
aviation
of
to recent
and r e p o r t
policy
the
To e n a b l e us t o
havo
examined
including
Sir
Brigadier
Statistics
foreign
civil
circulated
to
to
of
the
question
Empire,
our
and
the- A i r
comparing
aviation
the
and
of
to
our
practicable".
reference
offioial
and
t h e Chairman o f
of
the Post
we
unoifi­
Imperial
Office,
Ministry.
the progress
were g i v e n
Cabinet
abroad
terms o f
Goddes,
civil
particular
what m o d i f i c a t i o n s
General Williamson
of
of
with
developments
fulfil
Eric
were:­
position
a number o f w i t n e s s e s
and r e p r e s e n t a t i v e s
3.
position
to r e v i e w the
Committee
are desirable
2.
Airways,
(Paptr
of
in the B r i t i s h
reference
cial,
them a
Air
and a g r e e d
"To r e v i e w the present
present
(Cabinet
t h e Board o f T r a d e .
( I n the Chair)
Secretary of State for A i r .
? i r s t Lord o f t h e A d m i r a l t y .
-First CommiBPioner o f Works,
-Financial S e c r e t a r y of the Treasury.
The
Tho
The
The
consider
for
the present
Transport
The P r e s i d e n t
The Terms o f
of
with
a Cabinet
1927.,
C a b i n e t had b e f o r e
Secretary
Commercial A i r
as
the
26th,
by t h e
of
British
and
i n t h e memorandum
Secretary
of
Stale
for'
23
Air
referred
necessary
to
The
that
to
in
restate
salient
that
behind
the
faeLs
ncmoranduin,
firstly
para.
and
without
tbt^re
ar.3
position
in
to
which
which
British
air
developments
1 above,
on
is
no
hope
of
this
tho
is
was
drawn
it
and
in
confirms,
lagging
are
seriously
secondly
existing
situation
think
detail,
Continent
of
net
investigation
transport
some m o d i f i c a t i o n
do
attention
our
the
we
that,
arrangements,
being
substantially
remedied.
The
cardinal
in
the
past
has
in
the
hands
of
subsidy
-
-To a r e
aviation
of
feature
been
a
of
the
development
company
Airways
satisfied
oivil
concentration
single
Imperial
British
that
this
who
aviation
of
air
enjoy
policy
transport
a
monopoly
ltd,
at
the
policy
present
is
stage
sound
and
of
civil
should
he
corjtinu.ee .
1
5,
It
is
company
clearly,
enjoying
economically
Geddes
cular
and
on
to
6.
Imperial
four
figures
(a)
company
in
during
there
reduotion
for
tho
fie
with
which
us
heen
latost
has
3s.2d.
frcr.
t--.lr.-i
Eric
parti­
expenditure
satisfied
condition.
steady
in
progress
existence
established
to
a
and
Sir
devoting
overhead
boon
the
that
efficiently
generally
a most
over
typo
as
made
to
bo
Airways,
this
it
condition
evidence
are
indeed
costs
^JJf£ril^^fe
full
which
from.
shall
nuestioos
has
has
running,
essential
Imperial
complies
produced
That
of
charges.
Airways
years
were
'7e t o o k
such
administrative
an
advantages
finances
attention
the
the
these
managed.
the
that
however,
ls.lQd.
into
as
and
­
satisfactory
period
over
reduction
a whole
per
service
-
a
ton-mile
-
due
h o ^ i n t £ oa u c t i o n ^ i ^ m a c h^n e s ^ f ^ n ew
ftM^up.-:tQ;;date.^.0.egi&n
and
th::\t
in
consequence
­
232
fb)
The
company
is
ton-milcage
receives
tho
Tho
clear
than
subsidy
4
times
our
evidence
which
we
til a t
the
aircraft
is
the
chief
tho
costs
become
7.
Y7e a t t a c h
the
and
special
attention
contracts
recommend
to
with
enab?ue
the
of
more
up-to-date
wc
are
informed
manufacturing
carried
is
at
in
out
at
secure
an
there
given
are
is
even
in
that,
whereby
the
first
series
may,
of
paralysis.
if
of
a
subsidy
no
There
new
types
in
civil
aspect
shall
the
aviation
of
the
direct
design
is
action
is
a
provision
its
of
fleet
should
with
intervals.
regular
Whilst
consultation
and
the
affecting
the
design
that,
to
ensure
moment
permanent
and
aircraft
this
the
most
in
machinery
shall
be
liaison.
6 above
and
the
figures
we h a v e
reluctantly
under
present
arrangements
of
duo
fear
of
that
hut
is
be
machines
Airways,
para.
signs,
conclusion
operations
of
proper
closer
described
hopeful
the
this
Ministry
already
some
the
in
to
frequent
reached
reductions
of
efficiency
nearer.
renew
the
set
progress
at
it
the
whon
day
special
v/e r e c o m m e n d
possible,
The
of
the
Air
matters
manner
8.
us makes
reduction
Imperial
effective
to
­
irrance
further
brought
to
there
industry
renewal
a
Airways
Ministry,
aircraft,
before
improvement
design
commcericl
in
Germany
introduction
and
the
company
that
Air
it
and t h e r e s e a r c h r i e c e s s a r v
therefor.
t h a t i n any r e v i s i o n o f t h e
existing
Imperial
made t o
in
in
competitors
flown
that
importance
that
the
and
subsidy
German
improvement
which
utmost
and
had
the
secured,
aircraft,
roeommend
the
have
by
in
amount
trcturn
own.­.
self-supporting
problem
nomrnarcial
We f u r t h e r
bo
of
£ times
employed
can
the
ton-mils
progressive
direction
will
up
per
about
better
French
rate
at
a markedly
for
its
out
of
between
flown
working
thst
working
giving
substantial
next
taken,
th:.t
year,
progressive
Imperial
shortly
either
the
bo
in
Airways
danger
company
will
233
go i n t o
all
of
liquidation
attempt to
its
in the
continue
technical
methods,
industry
is
eventually
stagnate
on t h e
its
(both
is
progressive
aircraft
essential
and
if
abandoning
development
engines)
the
air
t o beoomo s e l f - s u p p o r t i n g ,
(so to
call
two e x i s t i n g
it)
of
the
contracts
transport
it
event
it
is
t h e oomnany h u t a l s o
expiro
in
important
the
to
aircraft
remember
that
manufacturing
be
affected.
important
in
I m p e r i a l D e f e n c e ^ ' At t h o p r e s e n t
asset
development,
A healthy
t h e o r d e r s p l a c e d by
undertakings
are n e c e s s a r i l y
only
problem,
every
of
direct
'pro
assistance
tanto'
limited
its
hut
eytension
to
can t h e
commercial
aircraft,
a condition
of
n a t i o n a l manufacture
9*
In short
resist
the
only key t o
substantial
In v i e w
subsidising
sion
three times,
the B r i t i s h
aviation
that
aviation
subsidy
over
their
scale
air
is
and t h a t
figure
abroad
-
to
in
the
is
of
very
abroad
foreign
aircraft
for
countries
of
their
is
t o be i m p o s s i b l e
t h e main,
a term o f
of
for
the
years
tenure
on which
for
i3
companies
as e v i d e n c e d
not
development
a revision
continuance
Powers
- the
of
of
a
the
to
over
progress
by t h e i n c r e a s e d
are
total
amounts t h i s
consequent
to
inevitable.
Foreign
subsidy
though
so as t o g i v e
i n German E s t i m a t e s
and t h e
the
be abandoned,
provide
transport
Estimates
stage
on a
a market
the p r i n c i p a l
finance
security
of the
a most
diminution
e:-.ocpt
only
industry
be u t i l i s e d . '
agreements t o
i n French
secure
not
transport
transport
t h e p r o b l e m and t h a t u n l e s s
company r e a s o n a b l e
10.
Kcr
is
factor
air
appears unfortunately
civil
existing
air
and any
subsidy that
shall
tho conclusion
of B r i t i s h
the
it
since
civil
civil
position.
industry
industry
a small
the i n d u s t r y ,
weakens i t s
scale
make i t
will
existing
as a w h o l e w i l l
of
and
respectively.
In e i t h e r
only
further
whioh
"dole"
wuntli
1931 and 1934
the
equipment
operational
subsidies
e a r l y future,: or that,
provi­
year to
five
of
some
times
civil
mileage
flown
23
and
us
opening
to
the
stand
'fait
factor
to
in
upon
should
existing
a period
that
this
there
of
no
reached
this
present
acnual
be
somewhat
by
which
and
likely
in
traffic
-
uneconomic
seems
11,
is
and
due
the
rather
than
As r e g a r d s
if
the
(a)
and
a service
in
with
Persia)
India,
only
We w e r e
as
to
the
open
that
but
so
between
of
by
of
Middle
fir-.r
with
success
the
on
be
routes
East,
the
3pent.
to
that
which
the
should
progress
of
away
to
the
to
difficulties
on
which
not
company
is
mail
machines,
are
is
modified.
at
Continent
connect
with
Bubroh.
has
placed
attended
before
this
­
machine
there
and/or
intended
evidence
which
ensure
frittered
cervices
aud
to
types
arrangements
of
subsidies
real
passenger
dis­
on
(£230,000)
improved
foreign
reluctantly
preferable
obsolescent
(owing
Cairo
have
we
under
r
routes
existing
the
important
at
that
virtually
securing
should
a nr.mber
impressed
degree
of
it
question
operating
to
we
expenditure
of
pro^icjfcivel v
it
of
use
committed
we
and
unthinkable
sole
a
Croydoa
facilities
expenditure
and
at
annual
should
us
a paying
operated
present
Egypt
up
be
the
the
subsidies
a view
opening
services
-
is
are
to
think
on
with
to
It
wc
development
course
incurred),
possible
we
expend!ture
tho
been
provide
is
England
has
to
by
weight.
in
terminus
aircraft
alternative
-
aorodror.es
ncin
for
seems
as
give
this
the
considerable
far
increased
great
to
for
confronted
bad
a substantial
since
it
conclusion
inovitable
(b)
a
so
other
we mean
engine
to
impossible
?nd
generally.
British
as
commitments
agreement
involve
years,
money
is
outlay
it
ourselves
state-o-vnod
Further
contracts
find
aerodromes
that
them.
over
If
which
and
we
(including
maintenance
competitors,
from
of
capital
these
regard
existing
international
and
we
necessarily
East
a large
maintain
appear
our
have
Middle
by
of
1
a number
aerodromes
staff
Moreover
we
are
which
a r e hound
on
new r o u t e s ,
still.
which
the
these
of
accomeli
There
and
up
us
latter
servioe.
It
are l i k e l y
services
is
to
to
olsar
prove
these
v.ith
a polioy
latter
r o u t e s which
to
India
less
Irr.perial
of closing
means o f
for
necessarily
very
and v/e
remunerative
on t h e
in particular
which
distance
transport
and cone e n t r a t i n g
and Scuto. A f r i c a ,
is
down t h e l e s s
await development,
services
than s h o r t
on which t h e r e
existing
servioos
distance
unprofitable
the Continent
keen c o m p e t i t i o n
advocate
that long
Egypt
great
from
is
an
of
Imperial
England
essential
Juncti one
12o
We r e c o g n i s e
services w i l l
present
point
of
view
if
b u t v/e a r e
South A r f i c - a
lines
Imperial
air
which i s r e q u i r e d
point
on s t r a t e g i c
available
the d i f f e r e n t
they
of
of mails *
forces
for
economical
a minimum o f
instant
points
use a long
of
the
fallow
against
aviation
still
for
react
civil
have t o d e v e l o p
and t h e r e q u i s i t e
facilities
a number o f
closely
to
it
It
is
for
points
is
other.
air
transport
companies, which
but
to
"between
that
be p u t
to
to
tomorrow,
these
aerodromes
defence.
early
This
and
civil
is
exclusion
desirable
become
has,
development
w h e r e ^he p r e s e n t
likely
necessary
Our a t t e n t i o n
the
of
any
better
a t which m i l i t a r y
in
is
of
selected
maintain
important
transport
and o t h e r g r o u n d s ,
and
w e r e abandoned
t.he need f o r
Egypt,
it
the
essential
reinforce
clearly
purposes
with
at
is
and m a i n t a i n
and
mobility
aei-odromes
air
strategic
the
are
of
of B r i t i s h
foreign
con­
India
full
If
emergency,
one upon t h e
e x a m p l e , b e e n drawn
delay.
Empire,
that,
if
to
be able to
chain
appreciate
aviation
at
their
disposition
we s h o u l d p o s s e s s
peace.
one o f
from
oonincident
to possess the
use i n t i m e o f
only
subsidy
possess
c o m m u n i c a t i o n which
profitable
is
they
commercial r o u t e s
are
their
with
should not l i e
we s h o u l d
of
Hor d o e s
are v i r t u a l l y
air
grounds t h a t
for
that
Imperial
particularly
whence t h e y w i l l u l t i m a t e l y
threatened
these
here-
strategic
centres,
carriage
of
i n t h e amount
satisfied
that the natural
and t o
our
an i n c r e a s e
of the
end
We f i n d
great
the development
commercial p o t e n t i a l i t i e s
Importance
beyond
entail
payable,
siderable
that
both
politically
on
236
impracticable
13.
Sir
in
the near
future.
E r i c Geddes o u t l i n e d
to
us a scheme f o r
a weekly
a i r m a i l s e r v i c e b e t w e e n London and C a l c u t t a
and we recommend
that
service
a commencement
the Air
Ministry
s h o u l d b o made w i t h t h i s
should
be a u t h o r i s e d ,
the
Treasury,
to negotiate
its
operation
as p a r t
existing
contracts.
estimates of
when f u l l y
Post
iVhilst
it
representative
of
and we t h i n k t h a t
tenure,
t h e Company s h o u l d
profit-sharing
whereby the Excheouer
profits
at
(a)
(b)
after
rate
of
from
the
that t h e
Treasury,
should
14.
of
It
the financial
in the
start,
the
Exchequer.
the
completion
services,
if
the
over
have
of
certain
works
he w o u l d b e a b l e
to
C a b i n e t wer*" p r e p a r e d
of
of
the
their
the
give
to
of
the
proportion
in
provided
this
lower
V7e
the
matter.
question
stringency
be most
t o make any
b u r d r n on
*JLr,
however,
being
relieved
Croydon
effect
with
We s h o u l d
for
This
or
for.
consultation
and o t h e r
to
our
the
Aviation
of
profits
a materially
authorise
Civil
of
Government,
e.mount,
to
the
Airways
than at p r e s e n t .
estimates
at
of
considerable
participation
State
sorvico
substantial.
would i m p o s e an a d d i t i o n a l
of
exact
such s e c u r i t y
our p r o p o s a l s .
as a r e s u l t
a 10 y e a r p e r i o d
be
for
t h e two
evidence
t h e most i m p o r t a n t
The S e c r e t a r y
of
tho
a larger
attention
financial
w it h
this
a modification
at present
consider
from
Imperial
received
in
of
form
over a
for
stage
whatever
special
existing
a n t i c i p a t e s "that
tenure
receive
Air Ministry,
recommend a t i o n s w h i c h
service
Government
effect
from
should
to
to
accrue
arrangement with
an e a r l i e r
give
remains t o
reluctant
agree
than t h a t
recommond
of
it
in return
the s h a r e h o l d e r s
dividend
this
should
might take the form o f
either
clear
that
t h o company
revision
difficult
should
that
security
period,
available
is
is
operating
no d o u b t demand
existing
it
consultation
with
a comprehensive
operation,
a condition
will
nn a g r e e m e n t
t h e renenue which
in
Office
of
in
and
by
capital
recommendations
stabilisation
Vote
of
237
Air
of
Estimates
£500,000.
this
being
receipts
the
(Vote 8)
The e ? a c t
the net
Secretary
of
calculated
of
on t h e
t h e programme i n
subject
as at
of
after
fees
State'c
£500,000
credit
etc.
present
ovor
any p a r t i c u l a r
is
£464,000,
that
period
for
it
t h a t the: a v e r a g e
a ten year
and
figure
h a s been t a k e n
We u n d e r s t a n d
intention
same b a s i s ,
detailed
its
amount i n 1927 E s t i m a t e s
figure
from l a n d i n g
provision
at approximately
is
annual
s h o u l d 'be
t h a t he c o n t e m p l a t e s
year
discussion with
should
the
be made
Treasury
that
the
precisely
present.
W h i l s t we a p p r e c i a t e
at l e a s t
lopment
a ten-year
is to
t h e need f o r
period,
if
be f o r m u l a t e d ,
the Cabinet
any c o n s i d e r e d
to
agree
scheme o f
we a r e n o t p r e p a r e d
to
to
deve­
reooromend
any s p e c i f i c
sum., s i n c e we t h i n k t h i s
can o n l y b e
dotermined
in the l i g h t
of
for
satisfactory
agreement
Air
t h e £mount o f
can b e n e g o t i a t e d
ministry
and T r e a s u r y
Y7e s u g g e s t ,
of
Air
should
Estimates
ivir
in
should
the t o t a l
the
as
stabilisation
Exchequer p r o v i s i o n
from t h e p r o p o s e d
since their
disposal
precise
character
Airways
Ltd*
of
for
and c i v i l
Secretary
Air
of
some
State
no r e s u l t a n t
London-Calcutta mail
negotianted
of
any
service,
with
for
increase
Services.
as t o t h e t r e a t m e n t
contract
it
o f V o t e 8 at
must n e c e s s a r i l y b e c o n t i n g e n t
the
votes
a w h o l e and t h a t
on t h e r e b e i n g
We make no r e c o m m e n d a t i o n
receipts
the m i l i t a r y
as t h a t recommended b y t h e
be c o n t i n g e n t
the
consultation.
that
that
which a
I m p e r i a l Airways by
should he r e g a r d e d
be understood
such f i g u r e
with
in
however,
subsidy
on
the
Imperial
233
SUMMARY 0 ? ;^CpMa^BBPATI.0H3 *
15.
be
Our r e c o m m e n d a t i o n s
summarised
fa)
as
That
in
the p o l i c y
t h e hands
the Air
with
the
of
of
Ltd * -
That
Airways
over
For
to
enter
the
t h e company
in
consultation
existing
security
period
in
of
with
agreemfnts
the r e n e w a l
of
the
less
of
commencing
long­
with
a
service.
the
intervals
tenure
services,
routes,
of
of
years.
lieu
continental
Imperial
frequent
Imperial
on n e g o t i a t i o n s
Lonion-Calcutta mail
For
transport
:­
development,
distance
-
be authorisod
a reasonable
the
air
company
to modify
remunerative
(3)
therefore
continued.
Ministry
For g i v i n g
(2)
may
concentrating
be
as t o p r o v i d e
(l)
Cabinet
a single
Treasury
Imperial
so
the
follows;­
Airways
(D i
to
company's
with
the
fleet
at
most' u p - t o - d a t e
aircraft.
(4)
For
t h e Government
participation
company's
(o)
That
to
(d)
the
Post
promote
Service.
That
over
an e a r l i e r
should
sucoess
a 10 y e a r
should
be provided
of
Air
Estimates
at
( l ) ,
(2),
(3)
carried
into
effect
annually
secure
more
favourable
stage
in
the
profits,
Office
the
Mail
at
to
between
of
the
period
on t h e
to
the
(4)
-
the
special
Civil
of
of
steps
London-Calcutta
a sufficient
permit
and
take
Aviation
the
(b)
amount
policy
above
figure
Air Ministry
Vote
outlined
being
to be
settled
and
Treasury,
t o whom each y c - a r ' s programme w i l l
he co municatcd
for
in
prior
scrutiny
and c o n c u r r e n c e
;
the
ordinary
course.
(e)
That
machinery
closest
should
passible
Imperial
be s e t
liaison
A i r w a y s and t h o
up t o
secure
between the
aircraft
Air
the
ministry,
manufacturing
industry.
(Signed)
P.
CUHLIi^E-LISTiiH.
(Chairman).
2 Whitehall
Gardens,
23rd D e c e m b e r .
3..7.1,
1927,
-10­
\