99
1439
HKK 18416
RECEIVED IN REGISTRY NO. 51 23 JUL 1980
DESK OFFICER
EINDEX.
No
Airline Profitability:
AIRLINE PROFITABILITY: LONDON-HONG KONG
11.9 a.m.
PA
RSAR
23174
11 July.
[ LORDS]
Lord MERRIVALE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is their forecast of profitability for airlines, by reference to traffic statistics, of a two-carrier, three-carrier and four-carrier régime for the first two full years of operation, that is, 1981-82 and 1982-83, between London and Hong Kong; and how they can justify the viability of a four-carrier régime.
Lord TREFGARNE: My Lords, in taking his decision the Secretary of State had regard to the profitability forecasts which were given in evidence at the hearing before the Civil Aviation Autho- rity. The Secretary of State, in con- sidering an appeal, must do so on the basis of the evidence given at the hearing and he was satisfied that on the market forecast by Laker four carriers could operate profitably.
Lord MERRIVALE: While thanking the noble Lord for his reply, I see he only refers to Laker. Would the noble Lord agree with a first-year forecast, in these figures mentioned, of £79 million costs against revenue of only £70 million with the presently licensed three-carrier régime? So, if a fourth carrier is licensed with seven flights a week, requiring £38 million extra costs, would my noble friend not agree that profitability in the first year would be even more disastrous?
Lord TREFGARNE: No, my Lords, I would not agree with that. Costs depend, first, upon the efficiency of the operator, and the revenue depends on the efficiency of operators in securing business.
Lord REIGATE: My Lords, would not my noble friend agree that the introduc- tion of a large element of competition is thoroughly to be welcomed?
Lord TREFGARNE: Yes, my Lords.
Lord MERRIVALE: My Lords, would not the noble Lord agree that in the
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figures that he did not mention, of those put up before the CAA, with a three- carrier régime, as forecast in London, in comparative terms there would be a loss of profitability of £412,000, and with a two-carrier régime as forecast in London there would be a profit of £2,320,000? -
Lord TREFGARNE: No, my Lords; the profitability of the three- or four- carrier régime depends, as I have said, upon the efficiency of the carriers and the costs which they therefore incur followed by their success or failure in obtaining the necessary business.
Lord CAMPBELL of CROY: My Lords, is my noble friend aware that with some of the proposals for low-cost flights for example, £99 to Hong Kong- it may soon be cheaper to fly from London to Hong Kong than from London to Inverness?
Lord TREFGARNE: My Lords, that is an interesting point.
Lord MERRIVALE: My Lords, in view of the extra strong support that Her Majesty's Government are giving to Laker, in terms of justice and fair play would he not agree that Her Majesty's Govern- ment should strongly support British Caledonian's application to the CAA to have a right to land in the Middle East? At the moment the other two licensed airlines have that right, which therefore adds to their that is Cathay's and British Airways'-profitability.
Lord TREFGARNE: My Lords, the first part of my noble friend's supple- mentary, suggesting that we are specially supporting Laker, is a mistake. We are not specially supporting any particular carrier. As regards the British Caledonian application to the Civil Aviation Authority, that is a matter for them upon which I could not comment.
PELICAN STREET CROSSINGS
11.14 a.m.
Lord MONSON: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
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99
Pelic
To ask Her M how they intend t by Help the Aged action to redi injuries caused to Pelican" pedes crossings.
66
Viscount LONG Majesty's Governm the conclusions and the report publishe While they are m injuries to pedestria at Pelicans must be the thousands of mi made at Pelicans ev ty's Government possibility of impro ing and have inde receiving this repo whether some mino and phasing of t beneficial. These place at 40 Peli London. But I Pelican crossings a aid to pedestrians roads and the elde be discouraged fro
Lord MONSON noble Viscount fo of which I found fr aware that it is no find the time all short, but many y people do as well? aware that far to these crossings revving up their e way through crow the crossing wher and even driving are red, as I have many occasions? that a few well- followed by convic of substantial fine to bring it home must not behave i manner?
Viscount LON agree that we are not only the elder and especially ch there have not be children dashing As regards prosec