Charter Flights: A First Step

The recent report of the HSA's charter flight agency is encouraging in its acknowledgement of the community's interest in its operations, and though not completely candid, is at least a first step toward an explanation. The report begins by promising a "full discussion" rather than a "superficial treatment," yet few of the serious charges that have been made are mentioned, and the most vigorous argument is devoted to a point not at issue. The HSA, by its failure to answer the charges brought against the charter flights has done little to show the community that the accusers are irresponsible instead of the agency itself.

In answer to the allegations that its overseas fares this summer were excessive, the HSA could provide only three rather meaningless generalities. The report claims that the jets now used exclusively cost more than the propeller planes formerly used, but the charge was that the HSA jets are priced higher than they ought to be. Second, the report states that the higher prices are a result of flying to the Continent, but the charge was that no matter where you go, the HSA fares are too high. Third, the report claims that the termination of BOAC propjet service forced a switch to jets, but again it does not explain why the prices are apparently out of line. In the whole section defending prices, there was not a single figure to back up the report's position, a notable omisson in a "full discussion" of such a matter. To believe the HSA report one must either trust them implicitly, which few can do since the charges were made, or have a mystical knowledge of the HSA balance sheet.

Even less of a full discussion was given to the various charges that the HSA violated regulations of several agencies that oversee the flights. Noting that it takes experience to cope with the legal problems raised by the regulations, the report goes on to say nothing about the HSA's failure to provide the financial statement to its passengers after each flight which is required by the International Air Transport Association. Nor does the report answer criticisms that the administrative costs charged to each passenger are excessive and unreasonable, or that money from the charter flights operation is used in ways not sanctioned by the regulatory agencies. These are serious charges, charges which cannot remain unanswered if the HSA is to stay "proud of its record of service to the community."

The report does, however, make a good defense of the HSA's monopoly position. It is an almost classic statement of the case for a natural monopoly, a monopoly justified by the inefficiency of free competition in that field. The HSA points out that it has not had a single aborted flight, in contrast to the record of earlier competitive agencies, and that the experience it has is necessary to make informed judgments about the financial risks that any charterer must take. Unfortunately, though, the controversy has not centered on whether or not the HSA should have competitors; it has been over the practices of the HSA itself.

But if the HSA is going to claim immunity from competition because it is a monopoly, it should also submit to regulation, as any public utility must. It has consented to have the agency's books reviewed by an anonymous committee of Harvard administrators not connected with the HSA, but has published only their conclusion that all is well. Another anonymous committee will be appointed in the future, and its report too will most likely be as bare of data to support its conclusions. It ought to be obvious that committees selected by the HSA itself, and withou any power to publish the basis for their findings hardly constitute adequate regulation in the public interest. There must be an independent committee with the power to look at the HSA's books, and the power to publish its conclusions in detail.