Decision to abandon airline's first planned service to US proved to be absolutely right, writes Garret FitzGerald
CONGRATULATIONS TO Aer Lingus on the 50th anniversary of its transatlantic air service. Unhappily, the first attempt to launch such a service in 1948 coincided with a crisis in the post-war expansion of Aer Lingus's European services.
Because of a notable failure to research traffic demand, that expansion led in 1947/48 to huge losses, which, as a share of national output in 1948, would be equivalent to €330 million in terms of today's GNP.
As a new, 21-year-old member of staff, deeply concerned about the airline's future, keeping a close eye on traffic data, I recall in late 1947 suggesting to my boss that as the new twice-weekly Shannon-Paris route had carried no paying passengers in its first three weeks, it should be cancelled - which was done.
That fiasco caused understandable alarm at government level, and in January 1948, a small committee of senior industry and commerce officials was established to temporarily replace the airline board that was responsible for this crisis.
However, a couple of weeks later, the Fianna Fáil government had lost office, and, in the light of the failure of the Aer Lingus European network, the new interparty government decided to announce the abandonment of what they feared might turn out to be an equally loss-making transatlantic service.
However, because it suited the new government to claim credit for the economic measures that had in fact been initiated before they came to power, and because it equally suited the outgoing government to denounce the abandonment of the "prestige" transatlantic service, the fact that these radical measures had been begun under the auspices of the outgoing government never emerged to the public.
I have to say that I was, and still am, convinced that the decision to abandon the projected transatlantic service in early 1948 was absolutely right.
My estimate at the time of traffic volume on the route, if it had gone ahead, was for 8,500 passengers in the first year, with a load factor of about 20 per cent and a financial loss 50 per cent higher than the massive deficit already incurred by Aer Lingus on its European network during the preceding 12 months.
However, in retrospect, that estimate looks far too optimistic, for between 1950 and 1958 Irish-US air traffic quadrupled - despite which, in its first 12 months of operation to April 1959, the new service carried less than twice my estimated figure.
That suggests that my estimate may have been too high, and that the service might have carried less than my estimate - no more than perhaps 5,000 passengers in its first year. If the transatlantic service had not been cancelled in 1948, the scale of the losses would have forced its abandonment within the year, and that might have proven a deterrent to ever re-opening the route.
Moreover, if the service had been launched in March 1948, Aer Lingus's losses on its European routes would also have greatly increased. This is because the airline had purchased five Constellation aircraft for its daily transatlantic service and the surplus aircraft were employed by them on the Dublin-London route. But, being long-haul aircraft, with fuel tanks replacing potential passenger capacity, these Constellations were uneconomic on this route.
Had they been used on that route for a year, (which happily did not happen because the five aircraft were sold in June 1948), their operation would have added to Aer Lingus's losses.
When, at the end of 1957, Seán Lemass, back again as minister for industry and commerce, decided to re-launch the service, the fact that in the meantime the volume of transatlantic air traffic had hugely increased meant the time was right to establish a viable service. I believe it was right to have started this process by wet-leasing aircraft from Seaboard and Western Airlines in April 1958, pending the delivery of the airline's own fleet in 1961.
However, a serious management problem arose in New York. Within weeks of the service being launched, the junior staff in that office sent a round robin to Dublin demanding that a senior executive be sent at once to investigate the situation there.
It became clear there was a problem because no information about passenger numbers was coming from New York. I found myself unable to furnish information to an anxious Seán Lemass about traffic volume. To satisfy his curiosity and my own, I stationed an official in Shannon to count the arriving passengers.
However, after visits to New York by management, appropriate changes were made and thereafter it was plain sailing.
During the summer of 1958, the airline's technical and commercial staff were deciding what aircraft to purchase for our service, to be launched three years later. A principle I sought to apply during my time with Aer Lingus - that of matching aircraft size as closely as possible to forecasted traffic demand - may have influenced the decision to purchase the smaller Boeing 720 instead of the larger Boeing 700.
But while we could not have known it at the time, that was a mistake, as this smaller aircraft failed to fulfil its performance in terms of the distance it could fly. When flying to the US, it had to stop far more often in Newfoundland than was commercially tolerable.
On a personal note, I would like to add that during the summer of 1958, the last I spent in Aer Lingus before leaving for a new career in economics, I also provided flights for over 30,000 pilgrims to fly on over 500 charter services to Lourdes during that centenary year of the shrine. For this purpose, two Viscount 700 aircraft that were about to be sold were retained and scheduled on every day from mid-May to mid-October. They carried 81 of the 82 pilgrimages organised that year from Ireland and Scotland to Lourdes.
I like to think that this may have been the closest equation of supply and demand achieved in the history of aviation!