COM
STIAL
SECTION 4 DIRECTION TO THAT EFFECT. TO DO SO WOULD HAVE THE FURTHER ADVANTAGE OF CURING A SERIOUS SITUATION FACING THE TRAVELLING PUBLIC THIS SUMMER ARISING FROM BCAL'S BREACH OF THEIR
PROMISE TO ATLA TO COMMENCE FLYING IN APRIL IF LICENSED AT BOTH ENDS. IN ANTICIPATION OF THE ADVENT OF OTHER CARRIERS ONTO THE ROUTE, BA HAVE REMOVED SOME FLIGHTS FROM THEIR SUMMER SCHEDULES. BY AUGUST, WHEN BCAL HAVE ANNOUNCED THEY NOW INTEND TO COMMENCE, THE SUMMER PEAK IS PAST. CATHAY ARE READY TO COME ONTO THE ROUTE IF LICENSED WITHIN A VERY SHORT TIME AND WOULD BE ABLE TO TAKE UP THE ANTICIPATED SHORTFALL IN CAPACITY IN THE EARLY SUMMER''.
MOREOVER ARGUMENTS ABOUT THE VIABILITY OF TWO CARRIERS COMPETING
WITH BA ON THE LONDON/HONGKONG ROUTE HAVE NOT TAKEN INTO ACCOUNT THE VERY CONSIDERABLE FLEXIBILITY WHICH BA HAS TO TAILOR ITS CAPACITY TO THE TRAFFIC OFFERING BY ADDING INTERMEDIATE AND BEYOND POINTS SUCH AS PEKING OR SEOUL TO THEIR ROUTE. IT IS BY NO MEANS PROVEN THAT A 3 CARRIER REGIME CANNOT POSSIBLY RESULT IN A VIABLE OPERATION FOR ALL THE CARRIERS.
ENDS
MACLEHOSE
FILES
HK+GD
MAED
MR. MURRAY
MR. EVANS
MISS BROWN
COPIES SENT. TO
CAIR/DOT
-9-
CONFIDENTIAL
COPIES TO :
MR. GARDINER,
LEGAL ADVISERS
HONG KONG GOVERNMENT
OFFICE, LONDON