Air Merger—Pro and Con

ON May 7, the following letter was pub lished in the Sydney Morning Herald:

New Guinea Air Policy

Sir, —After reading the reports of the protests by representatives of the whole community against the Senator Pearce proposed compulsory merging of air transport companies in New Guinea under Government control, I am forced to ask whether the Commonwealth Government desires to intro duce State Socialism or Sovietism in the Man dated Territory of New Guinea and Papua.

Prior to the competition which eventually brought rates down to /2j, and in some cases /2, per pound for the carriage of cargo, one air ways company had the field practically to them selves and charged rates which enabled the pay ment of exorbitant dividends. If at that time any Government representative had suggested that air transport should be merged with trading interests and put under Government control it is safe to surmise that that company would have resisted such action to the utmost.

Anyone experienced in New Guinea air transport knows that it is the best conducted service in the whole world, as accidents are rare and carriage enormous, as the following figures show for the year 1935: —Number of flights, 18,475; hours flown, 15,723; passengers carried, 16,672; mer chandise carried, 19,797,4371 b.; mails carried, 108,6501 b.

Competition is a vital necessity for progress, and competition was solely responsible for a reduction of rates which made it possible for many low grade mining areas tc be worked; yet a visiting Senator, who spent only a few hours at the Wau, finds it necessary to check competition and adopt a policy of compulsory merger which can only result in monopoly and increased rates, followed by the rendering of inferior service to the community.

It is absolute nonsense to argue that well-man aged air transport is not profitable at present rates, and competition forces operating companies to keep their 'planes up to standard so as to earn support, while the authorities see to it that 'planes are airworthy; so why should a representative of the Commonwealth Government interfere and en deavour to force upon the public a monopoly which is distasteful.

I am, etc.,

Edgecliff.

April 28.

J. A. Carpenter.

On the following day, May 8, the same newspaper published the following article on the subject of air transport in New Guinea, based on an interview with the chairman of Guinea Airways Ltd.:

New Guinea Aerial Transport —Five

New ’Planes

Aeroplanes of the latest types, and of a total value of more than £40,000, have been ordered for service in New Guinea by Guinea Airways Ltd., within the past two months. Mr. C. V. T.

Wells, of Adelaide, who is chairman of Guinea Airways Ltd., is visiting Sydney at present, and made this statement yesterday. He also com mented on the Commonwealth proposals for the merging of air transport companies in New Guinea and Papua under strict Government supervision.

Two new Stinson single-engined monoplanes, for small aerodrome work, were shipped to New Guinea by the Montoro on Wednesday, said Mr.

Wells. The company recently ordered from Europe a single-engined Taifun monoplane, of a capacity similar to the Stinsons. Last week, the board of Guinea Airways ordered from America two of the newest type of twin-engined Lockheed aircraft —an Electra, capable of lifting approxi mately two tons, and a 12A, with a somewhat smaller lift. The Lockheeds have an air speed of more than 200 miles an hour. Mr. Wells added that all these aircraft are of a type not hitherto seen in Australia or New Guinea. There is one Stinson already in Australia, but none of the latest single-engined type.

“Guinea Airways pioneered and developed the aerial transport industry in New Guinea,” said Mr. Wells, “and we have been for some years the largest air freight transport company in the world.

We claim, furthermore, that we have a record that is probably unique, in the way in which we maintain regularity of service over extremely diffi cult country, and in our comparative freedom from accident. This probably is because it has been our policy, ever since we began operations in 1927, to keep our aircraft abreast of the most modern con struction developments, and also to build up, at the same time, a sound and dependable ground organisation. We have made it our business pro gressively to reduce freight rates, so as to assist the Administration in establishing the new gold industry, and developing the Mandated Territory of New Guinea generally.

“It has been said that competition reduced aerial freight rates in New Guinea. The best answer

to that are our published records of the past eight years. It has always been our deliberate policy to reduce rates to the lowest point consistent with safety and efficient service.”

Mr. Wells claimed, however, that the aerial transport industry of New Guinea, which had been established with so much credit to Australian en terprise, was now being gravely threatened by irresponsible and uncontrolled competition. While the responsible companies were buying only new aircraft, and maintaining first-class ground or ganisation, smaller concerns were entering the Territory with old, second-hand aeroplanes, and, without adequate ground organisation, were com peting for the cream of the traffic by rate-cutting.

In recent months, a considerable number of aero planes, some 10 years old, which had seen much heavy service in Australia and elsewhere, had been introduced to the Territory; and if this de velopment were to continue unchecked, it was inevitable that the margin of safety would be wiped out, and the aerial transport industry of New Guinea would be menaced.

Mr. Wells said that proposals had been made by the Minister in charge of the Territories (Sir George Pearce), with a view to the better regula tion of the industry. One proposal was that the aerial transport concerns should be merged, and should operate under Government control regarding rates, time-tables, opening up of new routes, etc.

This had brought forth the protest that competi tion was vital to progress, and that a monopoly would mean inferior services and increased rates- All experience had shown that this, as applied to a public utility was the negation of the truth— as had been proved in shipping services, railways, and other forms of communication. Irresponsible competition, if allowed to continue in New Guinea and Papua, inevitably would destroy the efficient, dependable services that had been created.