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base in Hong Kong and most of their routes in regional Asia were operated with very high load factors. They had tended to be conservative in the development of their routes, and had not yet experienced any real competition of the type that would result from grant of the present applications.
Mr Chen said that, although his father's company did not have offices in either the UK or Europe, he was well aware of the current market situation through contacts with travel agents. As wholesalers they were primarily interested in mass markets and would only go into a market when they considered a large volume of traffic was available. At present Eupo-Air had a monopoly with BA of the Hong Kong London market and there was not the incentive for wholesalers to put forward a new programme with any degree of optimism as to its success.
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Although BA had a GIT fare available selling at under 7000 HKS for 14 days he said that it would only permit the carriage of passengers on a group basis of 10 passengers or 15 in the peak season. In order to attract passengers in large numbers a lower fare in the region of 4000 HKS would be necessary.
He said that Cathay should not be licensed either as sole carrier or in some kind of cartel as they were traditionally a protective, monopolistic, pool-type, high-fare carrier which might eventually eliminate low fares in order to maximise profits. That type of situation would not be in the best interests of the Hong Kong people.
Mr Goodman said that Intasun had been unable to negotiate any satisfactory charter or scheduled service agreements with either BA or BCal and Laker was the only carrier which could provide them with the type of service they required in order to develop the Far East market. Intasun would be able to market two weeks in Hong Kong at just under £300 which included room only accommodation and air fare; they would be able to sell between 30,000 and 50,000 round trips in the course of a year and if the service commenced in 1980 this level would be achieved in 1981. Based on their experience in Miami he expected that on the announcement of their programme other tour operators would introduce similar programmes.
Mr Goodman said that they understood that there was hotel availability during the summer months in Hong Kong and that the hotel element of the 13 night holiday would be approximately £60. They had not as yet approached any specific hotels to see if they were prepared to supply accommodation at that price. Hong Kong would not be promoted as a beach resort and it would be for the passengers to decide whether they wanted to take a holiday at a time of year when humidity rose to 90% and there were tropical rainstorms.
BRITISH AIRWAYS' OBJECTIONS
Mr Philipson said that although they did not admit that there was any need for the provision of additional capacity by other carriers on the route British Airways would not oppose the licensing of one additional carrier provided there was sensible limitation of additional capacity. BCal and Laker would both provide a massive excess of capacity on what was a thin route and for that reason both applications had been opposed.
Mr Nolan said that if Laker or BCal were to be licensed in addition to Cathay it would be equivalent to dual designation of British carriers on a long haul route where there was a reciprocal operation by a foreign carrier. BA believed that current CAA policy dictated that Cathay should be licensed, and to license that carrier would ensure that the best additional service was provided to the public in both the short and long term. Although the advantages to Gatwick were recognised BA did not consider that the size of the route warranted the development of two separate terminals and route structures from London. The grant of traffic rights at Kuwait to BCal and between London and Bahrein and/or Dubai to Cathay would impact severely on BA and the Authority was asked not to include a traffic call to any intermediate point in any licence granted.