Coll 28/67 ‘Persia. Annual Reports, 1932–’ [‎45v] (90/644)

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494. The fact that Mr. Muntz’s firm was now to all intents and purposes an
Iraqi firm somewhat altered the situation, but enquiries weie made as to
the proposals made by Mr. Muntz in May were being received; and it was learned
unofficially that, though an official decision was still awaited, the Ministry ot
Posts and Telegraphs had reported favourably on Mr. Muntz s pi oposals, except
as regards customs exemption, about which there was some obscme difficulty, thfw
also thought the mail charge too high. V
495. By the end of the year Mr. Muntz’s arrangement with the Iraq
Government was settled in principle, and he had decided to seek through them
permission to run a service to Tehran, without pressing for the moment foi a
mail contract. As regards Luft Hansa, he contemplated a profit-shai ing ai lange-
ment under which each would act as agents for the other, Airwork in Bagdad
and Luft Hansa in Tehran.
Junkers and Luft IIansa.
496. At the beginning of the year it seemed certain that Junkers would
close down in February, when their five-year contract expired, as neither they nor
the Persian Government appeared disposed to give way over the terms of a new
contract, and more especially over the question of the construction of an
aeroplane factory An East India Company trading post. in Persia, upon which the Shah was believed to set great store.
But shortly after the return of the Minister of Court from Europe early in
February, it was announced that a three months’ extension had been granted,
which would enable the company to operate until Herr Weil, the manager, who
had to go to Germany, ostensibly for an operation, was available to continue
the negotiations. This decision may have been due to failure by the Persian
Government to find a suitable successor to Junkers from some other country.
497. The three months’ period was never completed, however, for on the
24th March the acting manager received instructions from Germany that he was
to close down the service at once unless the Persian Government undertook to
make good the existing monthly deficit, which was believed to reach £1,000. The
Persian Government, who were given until the evening of the 26th March to
reply, declined, as was expected, to accept these terms, with the result that the
departures of all further aeroplanes from Tehran were cancelled, though those
away returned according to schedule. Most of the German personnel left during
the following few weeks, and it was at first intended to send the aeroplanes away
as well. But, finally, the aeroplanes were left on the aerodrome, with one or two
mechanics in charge, and the aerodrome was kept up sufficiently to allow of
visiting aeroplanes (including the company’s aeroplane on charter to the Anglo-
Persian Oil Company) to continue using it. The departure of Junkers, who
maintained to the end their reputation of having never injured a passenger or
lost a parcel, was the cause of universal regret among foreigners in Persia.
498. The decision to close down was the result of the financial difficulties of
the parent company in Germany, whose creditors seem to have suddenly demanded
that all unprofitable enterprises should be terminated forthwith. The situation
came as a complete surprise to the German Legation and the acting manager,
though Herr Weil may have known what was in the wind. The suddenness of the
decision must have annoyed the Persian Government, who for once found them
selves hoisted with their own petard, but the cessation of the service caused them
little inconvenience, a civil air service having, in Teymourtache’s words, “a
vanity value,” but little more, in present-day Persia.
499. Herr Weil himself returned to Tehran in August, this time as the
representative of Luft Hansa. His object was to secure permission for Luft
Hansa to operate a service between Bagdad and Tehran and perhaps between
Tehran, Meshed and Kabul; they had no wish to run subsidiary services, but would
do so if subsidised. For this purpose they would take over the aeroplanes in
Tehran belonging to the Junkers company, which intended thenceforward to
concentrate on aircraft construction. He complained to His Majesty’s Minister
shortly after his arrival that Airwork (Limited) seemed determined to exclude
him from operating in Iraq, and though he had every desire to co-operate he had
no intention of being pushed aside. It appeared from subsequent enquiries that
this was not Airwork’s intention ; their apparent opposition was a tactical move
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