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The objections to Cathay's case were unfounded. BCAL's main case was that Cathay would not compete with BA, who regard Cathay as potentially its most effective competitor, whereas BCAL had never competed effectively either with BA or with anyone else. They had criticised Cathay for not disclosing preliminary working papers either in Hong Kong or London, when they had themselves refused to provide details of their Manila traffic survey which related to their plans for expansion in the Far East and which would impact severely on their ability to carry end to end London/Hong Kong passengers. Cathay was well able to commence its service within 8 weeks of getting a licence. The aircraft were on order, the publicity campaign had been prepared and cargo and passenger sales managers appointed. BA'S objections had been limited to saying that Cathay should not be granted mid-point rights because it would damage BA elsewhere and that the four frequency regime was not practical. As regards the four frequency regime, Cathay's proposals were not immutable and, if the results did not justify building up the route as proposed, Cathay would not do so, in which event the losses forecast in BA's evidence would not arise.
BCAL had made it clear that they were seeking new low risk routes to further the extension of their route networks. Although not high risk politically the Hong Kong route from the evidence that had been presented would nevertheless inevitably be a high risk financially and BCAL would be in difficulties if the route did not develop as envisaged since they did not have Cathay's financial resources. They would simply be offering the services of another British airline and would not attract the volume of traffic that would be attracted to Cathay's services. Its aircraft were inferior and its case was inconsistent and vacillating. They had said that Cathay should be on the route but have given no positive reason for being on the route themselves. They had claimed that the DC10 was more suitable than the 747 but, allowing for peaks and troughs, the DC10 would be too small within months and their success or failure on the route would depend on their obtaining intermediate traffic rights.
Laker was seeking to attract low fare charter traffic which did not exist in sufficiently high numbers. Their costings were unrealistic and the proposed low fares were not economically viable in a market where it had already been established that the proposed fares would have to be increased. For Laker's service to be viable" it would be essential for them to have traffic and cargo from intermediate points which they were unlikely to obtain in any great numbers or quantities. Cathay asked the Authority to reject the applications from both BCAL and Laker and to grant Cathay's unconditionally, in which case Cathay would then ask the Hong Kong Authority to vary the licence granted to them so as to remove the frequency restriction.
Mr Bebchick said that the need for a competing daily service had not been disputed. The route was comparable with London/Lagos where there were twenty frequencies and the market was substantially larger than London/Houston or London/Atlanta on which second carrier competitive services were to start in 1980. The decision of the ATLA had been based on the needs of the market and had been derived by analysis of objective economic criteria. They had decided that it was necessary to maintain an end to end load factor of not more than 65%. since above that figure passengers were turned away, and that based on market forecasts there was a need for an additional daily service.
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