Air transportation as an industry, has progressed in no
country without substantial government support. Most nations
have subsidized their commercial air services to such an extent
that full government control has finally resulted. In the
national interest, airlines are deemed both desirable and
essential, despite their non-capability of full self-support.
Hence, with government aid mandatory, it is logical that legislative
attempts should be made to keep such aid at the lowest
possible level consistent with the provision of safe, efficient
and reasonably modern air services. Where a single airline must
of necessity be paid a subsidy it is manifestly uneconomic to
permit the entrance of a competitor in the same field. By so
doing, the total subsidy required would undoubtedly increase
inasmuch as each operator would move more than doubly distant
from achievement of lowest possible unit costs.
This concept guided the Hon. CD. Howe in the drafting of
the original Trans-Canada Air Dines Act in 1937. By that act,
Trans-Canada was given monopoly transcontinental privileges.
These privileges were not seriously challenged until 1941. In
that year, Canadian Pacific Air lines was formed. This firm
to proceeded progressively encroach upon the presumed domain of
the government airline. By 1952, Canadian Pacific had acquired
a patchwork coverage of the greater part of Canada, requiring
only an east-west link to create a composite operation. To
facilitate this final step, C.P.A. applied in November of 1952
for authority to operate an all-freight service between Montreal
and Vancouver, The consequent Air Transport Board hearing and
report to the Cabinet, and the ultimate Cabinet decision, provide
the basic subject matter dealt with in this thesis. Before the Board, C.P.A. contended:
1. that all-cargo carriers in the U.S.A. had been
most successful In their operations,
2. that adequate Canadian air freight traffic potential was readily available for diversion from
such surface transport facilities as rail express,
3. that conditions in Canada were even more favourable
than in the U.S. for air freight development,
4. that T.C.A. had knowingly neglected the air freight
field, concentrating its efforts upon the more
readily lucrative passenger and mail traffic,
5. that the pro-posed C.P.A. service would create new
air business, would not divert traffic from T.C.A.
to an extent detrimental to the latter's finances.
Successive thesis chapters appraise, and in the opinion of
the writer, totally negate these Canadian Pacific contentions.
In its report to the Cabinet, the Air Transport Board leaned
heavily, upon the evidence submitted by C.P.A. In essence, the
Board report to the Cabinet recommended that the application be
approved. The Cabinet chose to do otherwise. The application
was denied. Apparently, the ministers had listened with conviction
to the statements of T.C.A. President, Mr. McGregor and had
given heed to the warnings of the economic witnesses, Professor
Waines and Dr. Currie, as to the desirability of avoidance of
the pitfalls which have beset Canadian railway experience.
In the light of the data assembled within this thesis, the
writer contends that the Cabinet decision was fully justified.
T.C.A.'s slow approach to reduced rate air freight haulage was
sound in all respects. Unfortunately, however, it is noted that
the application, the hearing and the resultant publicity have
pressured Trans-Canada into establishing presently uneconomic
air freight services rather than further jeopardize the monopolistic
status of the firm. / Arts, Faculty of / Vancouver School of Economics / Graduate
| Identifer | oai:union.ndltd.org:UBC/oai:circle.library.ubc.ca:2429/41526 |
| Date | January 1954 |
| Creators | McRae, Robert Wallace |
| Publisher | University of British Columbia |
| Source Sets | University of British Columbia |
| Language | English |
| Detected Language | English |
| Type | Text, Thesis/Dissertation |
| Rights | For non-commercial purposes only, such as research, private study and education. Additional conditions apply, see Terms of Use https://open.library.ubc.ca/terms_of_use. |
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