CONFIDENTIAL
-2-
B
C
appropriate for him to intervene.
The Dui and the CAA were
therefore obliged to withdraw from the consultation process
and CPA has now filed an application with the CAA for a licence
for the London/Hong Kong route. It is now up to the CAA
-
to decide after a hearing, which will probably take place
towards the end of the year, which, if any, of the three
applications should be accepted.
4. The problem with this procedure is that under the 1971
Civil Aviation Act the CAA has various duties to "British airlines"
which, to meet the definition in the Act, must have their
principal place of business in the United Kingdom. The Hong Kong
誓
authorities have quite rightly pointed out in their telno 959
that this places CPA at a disadvantage (though the extent to
which this disadvantage will affect the outcome of the CAA hearing
cannot be predicted). Mr Cortazzi therefore argued in his letter
of 22 June to Mr Steele that something should be done to rectify
this bias. This is however rather difficult. The definition
of "British airline" in the Act is quite clear and further
discussion of the problem has confirmed that there are doubts as
to the propriety of a direction to the effect that the definition
be disregarded in a particular case. In these circumstances we
on
are not/sufficiently strong ground to urge our Ministers to
intervene in the hope of persuading the Secretary of State for
Trade to reconsider his decision against issuing any direction
at this stage.
CONFIDENTIAL
15.