CONFIDENTIAL
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6. With three applications under consideration by each
authority there are various ways in which a conflict could
arise. Not all of these would however be equally serious for
our relations with Hong Kong. If, for instance, CAA were to
Licence BCAL and/or Laker and they were
and they were not licensed in Hong
Kong the airlines would be barred from operating on the route.
If the ATLA licensed BCAL and/or Laker and CAA did not, the CAA
decision could be varied; even if it were
even if it were not and the airlines
were unable to operate this would not be too serious from the
point of view of the Hong Kong Government. A serious problem
would only arise if CPA were given a licence by the ATLA and not
by CAA. The problem would be aggravated if at the same time a UK-
based airline had been licensed by both authorities. This is
a problem that could be overcome through the appeal procedure
or through a direction by the Secretary of State for Trade. The
DOT have argued that it would be improper in advance of the CAA
hearing for their Minister to comit himself to any particular
course of action. We have not pressed them on this point as it
is quite possible that the CAA will decide to license CPA. I f
the decision goes against CPA it will of course be open to our
Ministers as well as the Hong Kong Government to put the Hong
Kong case to the Secretary of State for Trade.
19 September 1979
CONFIDENTIAL