DRAFT
CONFIDENTIAL
PRIORITY HONG KONG
RFI
(for ROBERTS)
Your telno 1388: air services on London-Hong Kong route.
1 We do not think that the position of the applicants before
the CAA is as unfavourable as you suggest. We have already
acknowledged that section 3(1) of the Act favours British airline
as defined and not Hong Kong-based airlines and we have nothing
to add to paragraph 4 of our telno 672. We suggest however that
your anxiety about greater quote legislative prejudice unquote
is not well-founded because We question the validity of linking
the Guidance (Cmnd 6400) with that Section of the Act, for the
following reasons:
nevertheles
A The Court of Appeal in its decision in the Laker
case declared that paragraph 7 of the Guidance and
the proviso to paragraph 8(b) were ultra vives.
Accordingly no question of British Airways' consent
arises.
B We stand by our previous comment (para 3 of our
telno 672) that the CAA does have discretion in the
way it applies the sphere of interest policy:
it is clear from the decision of the Court of Appeal
that the Guidance cannot be mandatory in effect.
While the CAA supports the generality of the policy,
it has exercised discretion in applying it in some
cases. An example is their giving a licence to BCAL
to serve Dallas/Forth Worth.
1
We have
never
clared that CAA is
6400) a to
legally entitled to
pohl
meas it in