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Three fare types would be offered which would cover the whole range of air travel from economy class downwards which compared with 24 different existing fares on BA. The economy fare of £309 compared with BCal's at £350, Cathay's at £399 and BA's at £501. The excursion fare of £148 which covered all the promotional fares from Excursion to Super Apex, was an average fare which would be operated with a peak, off peak and possibly a shoulder level and would compete easily with Cathay's Mid-week budget fare of £136.
The standard fare of £133 which was available all year was lower than the £136 proposed by Cathay and he did not accept that it was not bookable. The lowest fare offered was BCal's standby fare of £100 to £115 but that would only apply to six or seven passengers a flight. The seats to be offered to Intasun would be based on the excursion fare of £148 less agents commission of 10% factored from a 73% load factor to the 100% load factor which had been guaranteed by Intasun. Laker had the lowest seat mile cost of the three applicants, their aircraft in terms of fuel consumption per seat mile were substantially better and they would always be able to achieve the lowest seat price.
Laker believed that all the carriers should be licensed and that the airlines should be left to operate their own styles of air transport with the consumers deciding in the market place which product and service they preferred. The route was already served by 12 operators who were offering approximately seven flights a day between them and the Authority had to consider whether additional British operators should be allowed to compete on the route which was essentially a British route.
None of the other carriers had attempted to predict the traffic that would be carried between London and Hong Kong if Laker was in the market and their traffic forecasts which purported to show Laker's load factors were meaningless because Lakers traffic had not been included in their forecasts.
The General Electric engine used in the DC-10 was the only genuine pollution free engine in use and it was inconceivable that the Hong Kong government would stipulate that the 747 aircraft should be used instead of the DC-10 in their efforts to control congestion a Kai Tek airport. If that was the case it would then have to impose the same regulation on all carriers in the region which would exclude the DC-10s operated by Japan Airlines and the Tristars operated by Cathay.
G
The fares of £309, £148 and £133, subject to adjustment in the light of cost changes, would be offered from day one assuming full traffic rights at Sharjah. Sir Freddie recognised that no Air Services Agreement existed between Sharjah and the UK and confirmed that he had not spoken to the Department of Trade about the legal procedures necessary to secure such rights. He estimated that there would be 9,128 seats available for Sector traffic London Sharjah, Sharjah-Hong Kong and that Laker would need a fare level of only half the existing yield for Hong Kong Middle East traffic. They had not made any market forecasts for the Sharjah traffic, or decided on the range of fares that would be offered, as the Airport had only been open for about four days and there were no statistics available on which to base any forecasts.
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He believed that initially Laker would be the sole carrier at Sharjah and as it did not have any direct cargo services at present he would expect to carry a substantial amount on his services not only originating in Sharjah but also from Dubai and Muscat. Also, as cargo out of Hong Kong was capacity limited, he would expect to achieve a proportionate share of that market so that overall the estimate that Laker would achieve 80% of BCal's forecast cargo was not unreasonable. To break even they would need a 65.3% end to end seat factor which left 87,386 seats to sell out of a total of 251,850. Of these 18,712 would, he estimated, be taken up by sector traffic leaving 68,674 for passengers from Intasun and similar travel organisations.
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