5
10.
BCal and CPA then applied to the Civil Aviation Authority (CAA) in London for reciprocal licences as did Laker. The CAA decided that the route would only support one extra carrier and granted that one licence to BCal, but with no frequency limitation. It took a more pessi- mistic view of the market potential and considered that
if 3 carriers were operating one or more of them may have to go off the route, despite firm declarations to the contrary by all applicants and the initial frequency limitation which had been imposed by ATLA.
11.
This decision was the subject of an appeal by
CPA and Laker to the Secretary of State who eventually
decided that the decision was wrong in that the CAA had not given enough weight to Laker's evidence, and that he supported a "dynamic approach to civil aviation". The Secretary of State allowed the appeals and licensed all three applicants. He categorically denied that this was a political decision but must have been pleased that he
could come to that decision on the evidence.
12.
BCal, CPA and BA all contend that the Secretary
of State did not actually agree with Laker's forecast of about 470,000 passengers in 1980/81 but only supported his general approach. We feel that is taking too fine a point
in view of the Minister's words when he said in the House
of Commons that he was convinced by Sir Freddie that there was a large, untapped market. It would, however, have been helpful if the Minister had stated what evidence he
accepted which had been rejected by the CAA. He also was somewhat vague when he said that he considered that a four carrier regime would be economic "over a period" but did not specify what he considered the length of that period
to be.
C. The Current and Future Market
13.
In its decision of November 1979 ATLA thought a reasonable forecast of traffic for 1980/81 was 234,000
(total), based on the fares then cited to it and a 12% per
annum growth rate for the next four years. In fact the .lower
1