340
He explained that they had discounted the yield on the first class and economy full fare for proration by 7% which, in the absence of detailed yields and proration factors for Hong Kong had been based on their experience elsewhere on their network. The average cargo yield of £1.15 during the period 1980-1983 was not considered unreasonable as the Hong Kong market was particularly buoyant.
35. The B.Cal market load factors had been intended to demonstrate under
the two and three carrier regimes what the carriers would achieve on the end to end allocated capacity available, and that load factors would be high generally and substantially high in specific cases. It was meant to be a forward prediction under different operating regimes and had not been intended to demonstrate that BA had turned away traffic. It did however, have some value in assessing seat availability as in their particular submission it was considered necessary to estimate the capacity available end to end in order to make an assessment of seat availability.
CATHAY PACIFICS CASE
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37.
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40.
Mr Bowsher said that there had been a strong measure of agreement from the parties that Cathay should be one of the licensed operators and, although BA had not expressly agreed, the inference was contained in their case as Cathay was the only potential competitor that would ensure that capacity was tailored to demand, which BA had considered to be of prime importance.
The route was a cabotage route and as such Section 3 of the 1971 Act was not applicable as there were no foreign commercial airlines involved. Alternatively, Section 3 (1) did not prevent a finding in favour of Cathay as it was open to the Authority to decide that it was reasonable for Cathay to provide the competing service and that there was insufficient room for B.Cal. The Authority would then be absolved from the requirement to ensure that a section 3 British Airline was competing with BA.
Cathay had the support of the Government and people in Hong Kong and as a local carrier would have to be responsive to the demands of that market. It would be extremely unlikely that Cathay would in any circumstances abandon the route. They had made a considerable contribution to the British Aerospace industry and would by the end of 1982 be the only all Rolls Royce powered airline of its size in the world. The 747 was eminently suited to the route both in break-even point, cargo capacity and airport constraints. They were the only applicant that had traffic rights to or from Bahrain and proposed to serve the London-Hong Kong route as an end in itself.
Mr Bluck said that CPA had a long history of profitable operation and had a substantial route network in the Far East from which traffic could be fed onto a London-Hong Kong service. Many countries currently served by them had no direct service to London and were not at present served by a United Kingdom carrier. From London they would be able to introduce innovative promotional packages to carry groups and individuals to Hong Kong and beyond through their own network.
Customer preference was for the 747 as opposed to the DC-10 and it was not accepted that a smaller aircraft with 270 seats was better suited to a thin long haul route than a 747 with 408 seats during the initial period as it was the long term development of the route that was important.
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