consider trying to confine the sharing of revenue to those routes which both AC and BA operate. But this would also break the commercial agreement. Under the terms. of the
ASA, if the commercial agreement ends, Air Canada loses the right to serve Western Canada non-stop.
4. CP Air have an unreciprocated service to Hong Kong. are pressing the Canadians to allow CPA to serve Vancouver from Hong Kong. If there was a general confrontation with the Canadians we could consider stopping CP Air's services until CPA were allowed on the route. We could, however, expect considerable Hong Kong opposition to being used (as. they might see it) as a pawn in the Gatwick dispute.
We
This is
5. Intergovernmental cooperation. There is an agreement between the CAA and the Canadian Department of Transport to collect air navigation charges on behalf of the Canadian Government. We do this because the Canadians have no menas of enforcing the collection of charges from many of the airlines which do not have offices or assetts in. Canada (the charges are for services provided by the Canadians in their FIRS, not necessarily in Canadians airspace). worth some $11 million per annum to the Canadian Government. Although we could envisage some CAA opposition, it is not inconceivable that we could refuse to collect these charges on their behalf. However we would check this with our Legal Advisers. I am not aware of any similar reciprocal action on our behalf by the Canadian authorities.
6.
In short any Canadian retaliation is likely to take place in connection with North Atlantic scheduled services, but they stand to lose as much (if not more than they might gain). We are in a strong position on charters and air navigation service charges, and CP Air's services to Hong Kong.
31 January 1979
Miss Stoddart
c.c.
Mr Boyes
Mrs Denza (Legal Advisers) NAD
G Hall
Maritime, Aviation & Environment Dept