Aerial Services In New Guinea

Guinea Airways’ Chairman Hits at Uncontrolled Price Cutting Menace

ADDRESSING shareholders of Guinea Airways Limited at Adelaide on May 29, Mr. C. V. T. Wells (Chairman of Directors) made interesting reference to the proposed merger of aerial transport interests in New Guinea. He severely criticised the practice of uncontrolled price cutting.

“Whatever may be the future of air transport in New Guinea, the record of Guinea Airways for the year just con cluded must remain a bright page in its history,’’ said Mr. Wells. “Regrettable publicity has been given from time to time to criticism, irresponsible but harm ful, alleging that the Co.’s charges are too high. A perusal of our annual table of falling prices and rising turnover is an effective answer. An even weightier reply is that our service is the largest and best of its kind anywhere.

“It must be admitted, however, that any pilot with any sort of old aeroplane and without even a mechanic or any ground organisation worthy of the name can still carry on public cargo-freighting for a time in New Guinea at cut rates and probably make a living. He is free to use without charge any of the 50 or so N.G. aerodromes, the chief of which were made by our Co. at its own cost. These adven turous operators provide any loose-think ing critic with an easy starting point to accuse a specialised organisation like ours of refusing to match incessant daily rate

cutting. Nevertheless, the community at large knows and appreciates that this big unsubsidised service with its world re nowned equipment remains as the sheet anchor to safeguard New Guinea’s aerial life line from the tragedy of a breakdown.

“For this reason Guinea Airways has held to the same general policy through out its life, paying chief attention to the quality of the service in the belief that the population which depends upon it will support it and not begrudge the reason able returh hitherto paid on the capital funds at stake.

“I have referred deliberately to the un controlled price cutting menace in order to lead up to the subject of the proposed aviation merger or, as we prefer to call it, the stabilisation of civil aviation in New Guinea, In this connection Guinea Airways is very naturally a supporter of the Commonwealth Government’s pro posals, and we hope that some equitable method will shortly be agreed upon by all the interests concerned.

“Last year, when addressing share holders, I hinted that the general average freight rate reductions in New Guinea could not fall much lower without risk of injury to the efficiency of the services.

This was interpreted in some quarters as a kind of proclamation that the then existing air freight rates were our last word in reductions. This was never said, nor was it meant.

“Gradual reductions should still be pos sible as running costs tend to become lower with the improvement in mechani cal devices. But let me repeat that the proportionate reduction in freight rates must obviously for the future be much smaller than in the earlier period when expansion was to a great extent experi mental. This fact exposes the wrong headedness of any campaign designed to encourage the various aviation companies

to maintain a ceaseless war of attrition.

Eventually, as a logical sequence, the air services must thus destroy one another and leave the prosperous economic life of the goldfields without dependable trans- P° rt - “The matter can be summed up by saying that although the air services themselves are important the public welfare is more important. The maintenance of unrestricted competition in operating an essential public utility (for which in New Guinea no substitute is possible) is against public policy and thereby it becomes a proper subject for the Government s notice.

“Future demands upon air transport in the Territory are not as easy to foretell as might be imagined. Fortunately the Bulolo Gold Dredging Co. maintains its excellent organisation at full pressure and is increasing the scope of its operations by the importation of two larger dredges,

both to be carried by air. Other com panies also have been erecting extensive equipment during the past year which should be productive of further mining activity. It is nevertheless impossible to foresee when goldfield developments will receive a stimulus or a check. For this reason Guinea Airways, while assured of a steady flow of normal transportation business, must expect some degree of fluctuation in its supply of freighting so long as its main purpose is to serve a mining community’s needs,”