- 17
37.
We accept that the Regulations do permit some degree of overlapping or to put it perhaps better, some over-capacity, if the public interest overrides that of the airlines. What it does not accept is that there should be such vast over-capacity as to put such an intolerable financial strain on those airlines so as to cause instability and a possible reduction in standards. Sir Freddie was reported as comparing airline operations with taxis or other transport services which he thought were not restricted in Hong Kong. Even if that was so, which it is not, we feel he should be the first to realise that the scale of investment required with an airline makes such comparisons meaningless.
E. Conclusion
38.
The Authority is of the view that as it has licensed both BCal and CPA for a daily service, both should be allowed to develop their services up to that limit. There is evidence that demand has increased at a greater rate than forecast by the Authority in 1979, due mainly to the dramatic reduction in fares and such
This means very low fares being more freely available. that in 1981 the market will probably reach the level which the Authority estimated for 1982 when the restric- tions on BCal's and CPA's frequency would have automati- cally been lifted. We think it right therefore to remove those restrictions now. CPA argued that BCal's limitation should remain so that, as the Hong Kong based arrier, it could come up to some degree of parity with the UK air- lines. We do not accept that view. On the basis of each operating a daily flight CPA will have substantially more seats to offer than BCal and BCal's reservation system seems to us to offer some advantages that CPA does not. The question of reciprocity is a difficult one as no specific reference is made to it in the Regulations, so it must be considered in the context of the general public interest. We consider that in that context it would be wrong to continue the restriction on BCal while lifting
No comments yet.
Private notes are available after approval.