Advantages to the UK of the Australian Scheme
6 These are as follows:
(i) UK and Australian consumers will benefit from the
new low fares, the lowest of which could be around £200 lower than the current lowest return fare of £500.
(ii) One-way passenger journeys are expected to increase by 75,000 to 100,000 the first year to a total of about 600,000. Most of the additional traffic would be passengers who would otherwise be unable to afford to travel.
•
(iii) BA calculate that the scheme is in their commercial
interests. They estimate an overall net increase in profit of £5-6m per annum, which represents a 50 per cent improvement in the profitability of this route. Although they would lose their rights to carry traffic between the Gulf, India and Singapore on the one hand and Australia on the other, the first two of these are of little significance and BA believe that the loss of the third would be considerably outweighed by the gains which they would make from taking over, with Qantas, the traffic carried by Singapore International Airlines (SIA) and other intermediate carriers between London and Australia. The scheme is in keeping with BA's deliberate policy of moving towards end-to-end services without intermediate traffic stops. Low point-to-point fares have been introduced on other major traffic routes, eg London-New York, London-Los Angeles, and the proposed new low fares can be regarded as a logical progression. (The total UK-Australian traffic is about the same size as London-Los Angeles approximately 500,000 one-way passenger journeys and less than half the size of London-New York.)"
Possible Disadvantages to the UK of the Australian Scheme
7 These might be as follows:
(i) Flights between Australia and the United Kingdom
would be reduced from 34 to about 16 each week each way but a frequency of two a day for such a long journey is nevertheless good.
(ii) The stimulus of competition from a third carrier
(whether scheduled or charter, eg Laker) would not be present. We have told Laker in confidence of the proposals and, although we have said that we have not yet made up our minds how to respond, we have given no grounds for optimism that the decision will favour Laker. Laker are however considering modified proposals which might be saleable to the