Britain: An official handbook > 1966

British
Overseas
Airways
Corporation
(BOAC)
Operations
Financial Results
British
European
Airways (BEA)
Operations
TRANSPORT AND COMMUNICATIONS 385
BOAC is engaged on long-haul airline operations. Its scheduled services link
Britain with Europe, the Middle East, the Far East, Australasia, Africa and
North and South America, and it also provides a complete round the world
service. It works in close co-operation with airlines of several other Common¬
wealth countries; it also has financial interests in five companies operating
local and regional services in the Far and Middle East, in areas adjacent to
BOAC’s main routes. BOAC-Cunard Ltd., a joint venture formed by BOAC
and the Cunard Steamship Company in 1962, operates services between
Britain and parts of North and South America and the Caribbean.
Table 23 shows that the capacity offered on its own scheduled services by
BOAC reached 1,057 million capacity-ton-miles at the end of March 1965,
having risen by 83-2 per cent in the last four years. Nearly three-fifths was
on the western routes to North and South America. The overall load factor in
1964-65 was 49-3 per cent: the break-even load factor (the figures at which
operating costs are covered) was again lower. The Corporation’s passenger
fleet, made up entirely of pure jets, consists (May 1965) of Super VC 10s
(5, with a further 12 on order), VC 10s (12), Boeing 707s (20) and Comet 4s
(17). The VC 10, introduced into service in 1964, operates on African, Middle
East and Far East routes and has gradually replaced the Comet 4, which was
withdrawn from scheduled services towards the end of 1965. The Super VC 10
(a larger and more powerful version) went into service in April 1965 on trans¬
atlantic routes. BOAC plans to build its own ^7 million passenger terminal
at Kennedy International Airport, New York, to be opened in 1968.
Despite increasing revenue from operations, BOAC’s annual accounts have
shown deficits since 1957-58. In 1963 a White Paper1 attributed these losses
to additional amortisation provisions, interest payments on capital and past
losses of associated companies. The accumulated deficit on the profit and loss
account of the Corporation at the end of the financial year 1963-64 amounted
to £90-5 million. In 1965, the Government decided to write off the accumu¬
lated deficit at 31st March, 1965, and to establish a reserve fund against
contingencies. Measures were taken in 1964 to strengthen the management
of the Corporation and plans have been worked out which are already
producing better financial results. In 1964-65 BOAC had a record operating
profit of £7-6 million. Of its gross revenue (£114 million) £78 million was
earned in foreign currencies, of which £35 million came from the sterling
area and £29 million from the dollar area.
BEA operates a network of services to some 80 places in Britain, Europe,
North Africa and the Middle East. Its services in Britain include a number
which cannot be operated on a commercial basis but which meet a vital
social need; these include services to the Highlands and Islands of Scotland.
BEA maintains a close working relationship with BOAC, whose aircraft, by
agreement, use a number of European stopping points. BEA also co-operates
with other airlines in order to create ‘through travel’ facilities. It has a
financial interest in several associated companies, most of which collaborate
with BEA in providing a network of services.
Table 23 shows that between 1956 and 1965 BEA’s capacity offered, and
passenger-miles and freight ton-miles flown, trebled. For the year ended
31st March, 1965, the respective increases were 15 per cent, 9 per cent
1 The Financial Problems of the British Overseas Airways Corporation, HMSO,
November 1963.