TNAG-0965-FCO40-1184-Air-services-between-the-UK-and-Hong-Kong-1980 — Page 33

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14.

The Authority considered that this evidence, which was also given along similar lines by Mr. Smith of BCal and Mr. Stirland of CPA, did have the effect of discounting to some extent the sharp increases shown for traffic this summer but nevertheless clearly there had been a big increase, the main reason being the substantial reduction in fares in the economy section over those quoted last November. Everybody agrees that this route is highly fare-conscious and such reductions were bound to considerably increase demand. If these low fares

remain, or at any rate there is no dramatic increase, demand should remain high, though if operating

costs are well above those fares, as CPA in particular allege, some increases may well be inevitable.

15.

The attitude of each of the four airlines to this

traffic increase was very different. Laker said it was such as to show that the Authority was mistaken last November, that the market was in fact greater than predicted and with his airline operating as the fourth carrier it would be very much greater. BCal and CPA said the genuine increase was well below what the base figures seemed to indicate but it did call for some extra capacity, which they were prepared to provide, while BA said the traffic was still within present capacity and no increase at all was justified. Mr. Nolan, for BA, pointed out that they have in the past put on extra flights to cover peaks such as school holidays and might do so again. He pointed out that the economics of

such flights were doubtful. The aircraft tended to go one way full of student fare passengers and to return virtually empty. He considered that year-round capacity at present on the route was already well above that required. However, while vigorously opposing Laker's application as a fourth carrier, BA would not be as concerned by an increase in BCal and CPA's frequency.

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