15
32.
This Standard Skytrain system of reservation
clearly has some advantage and the Authority looked at it carefully last November. It concluded that such advantage would however decrease with the length of the journey and the reverse advantage offered by the other airlines of being able to book ahead would increase. We think Sir Freddie Laker acknowledged that when he said he was considering an advance bookings system on Standard
Skytrain. It is to be noted that on BCal a reservation can be made at the 'bottom dollar' fare of $1,661 only 34 hours in advance. This fare seems to be very attractive
indeed and, so far as the public is concerned, must be
hard to fault.
33.
The Authority felt that perhaps the strongest argument in favour of licensing Laker was that we could virtually ignore the interplay between capacity and the market demand and simply rely on commercial considerations to prevent uneconomic overlapping. That being so the
public would then have maximum choice of reservation system
and type of fare while the carriers would control them- selves by limiting frequency to match demand.
34.
The Secretary of State appears to have adopted that principle when he said that to license all applicants did not mean they would all start straight away. They would each have to make a decision on if and when to start and with what capacity. It is, however, now Laker's declared intention, if licensed,
to commence with a daily service in December and we have
little doubt that in order to compete effectively with
that and with BA, both BCal and CPA if so licensed would be forced to follow suit. This must result in an enormous extra capacity being put on the route. Allowing for 20% of seats being reserved for the Middle East traffic, such a four carrier regime would provide about 840,000 seats a year, which at a 70% load factor requires a market of about 570,000 one way passengers. Even Sir Freddie's estimate of 470,000 does not come close to that. Mr. Beckman said that while
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