13. THE ATLA WAS OF THE VIEW THAT AS IT HAD LICENSED BOTH BCAL AND CPA FOR A DAILY SERVICE BOTH SHOULD BE ALLOWED TO DEVELOP THEIR SERVICES UP TO THAT LIMIT. AS THERE IS EVIDENCE TO SHOW THAT DEMAND IN 1980/81 WILL PROBABLY REACH THE LEVEL WHICH THE ATLA LAST YEAR ESTIMATED FOR 1981/9? WHEN THE FREQUENCY RESTRICTIONS WOULD HAVE BEEN AUTOMATICALLY LIFTED, THE ATLA DECIDED TO LIFT THE RESTRICTIONS ON BOTH AIRLINES FORTHWITH. THE ATLA DID NOT ACCPET CPA'S ARGUMENT THAT THE RESTRICTION ON CPA ONLY SHOULD BE LIFTED SO AS TO ENABLE CPA, AS THE HONG KONG FLAG CARRIER, TO COME UP TO SOME DEGREE OF PARITY WITH UNITED KINGDOM-BASED AIRLINES, BEARING IN MIND THE AMOUNT OF CAPACITY IT IS ABLE TO PROVIDE ON THE ROUTE. 19. THE ATLA WAS OF THE OPINION THAT NO EVIDENCE HAD BEEN PRODUCED TO SHOW THAT ITS 1979 DECISION WAS WRONG IN PRINCIPLE AND WAS SATISFIED THAT CIRCUMSTANCES HAD NOT SO CHANGED SO AS TO JUSTIFY LICENSING LAKER AND HAS THEREFORE REFUSED THE APPLICATION. IT INDICATED, HOWEVER, THAT IF THE DEMAND ON THE ROUTE INCREASED SO THAT THE EXISTING CARRIERS COULD OR WOULD NOT SATISFY THAT DEMAND OR IF THEY RAISED FARES TO AN UNJUSTIFIED EXTENT, THEN SUCH CIRCUMSTANCES WOULD ALLOW IT TO LOOK SYMPATHETICALLY ON A FRESH APPLICATION FROM LAKER.
ENDS
CATER
J
LIMITED
MAED
HK & GD
NEWS D
OID
LEGAL ADVS.
MR DONALD
MR BRAITHWAITE
[COPIES SENT TO CAIR/DOT]
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