Skinflint's City Diary
The mixed economy Britain is supposed to have should mean the allowing of private and nationalised enterprises to co-exist. The fostering of British Caledonian by previous governments was the clearest exposition of this principle. As second-string British airline it would get an even larger share of the world market—somewhat akin to Imperial Tobacco having competing cigarettes or Unilever with several detergents. Also, of course,' it could give British Airways a closer incentive to efficiency with a clearer measure of performance.
Forget it. British Caledonian is just a touch too good for this Government's comfort. It showed its superiority early by taking over the long haul South American run from BA and turning it round into a profitable venture. So Peter Shore has prevented the independent airline from competing as scheduled carrier to New York, Los Angeles, Houston, Toronto, Atlanta and Singapore. With an arrogance that can only be produced by ignorance he said British Caledonian would not make profits from these runs. Since BC is a private enterprise undertaking depending on profit for survival, one would have thought its managers -rather more knowledgeable about airline economics — should have been left to judge for themselves., He did add that both BC and the freebooting Freddie Laker are likely to take business from British Airways. A curious statement. Why not from PanAm, TWA, Air Lingus or Air France? Or Lufthansa, KLM, Loftleidir, or SAS? Or is he really saying that British Airways, is so inefficient that anybody and everybody who competes takes business from it? Surely not. But he does seem to imply that BA is incapable of reacting sensibly to competition. If its traffic did diminish — and there is no obvious jeason why it should — it can take planes off, or it can become more efficient and take passengers from all its competitors. And with his argument Shore tacitly ignores the possibility that as a result of more British carriers on overseas flights there is a good chance they will take business from foreign lines and so increase the UK's invisible earnings.
But the political prejudice behind the decision is clearest in the case of the Laker Skytrain. Freddie Laker has invested some £31 million in this venture and has been planning it for years. The irony is that if allowed to start when he wanted to, he would have hit the big boom in air travel and made a fortune in a very short time. The UK Civil Aviation Authority pointed this out rather tartly when it castigated the Americans for political delays in giving Laker his licence. The outspoken criticisms of American government policy from an official British body raised a few eyebrows at the time. I wonder if the CAA will have the guts to take Peter Shore similarly to task in the same forthright manner.
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