Registry

No.

ECURITY CLASSIFICATION

Top Secret,

Secret.

Confidential.

Restricted.

Unclassified.

RIVACY MARKING

CONFIDENTIAL

DSR 11

DRAFT

To:-

C W Roberts Esq

Department of Trade

Type 1 +

From

Mr Gertazzi

Mumay

Telephone No. Ext.

Department

In Confidence

I'm

on leave!

I am replying to

AIR SERVICES ON THE LONDON HONG KONG ROUTE Hugh Cortazze's absence 1. Thank you for your letter of 3 August. In my view it would

be much more equitable and much less likely to give rise to misunderstandins and resentmentif all the airlines concerned

in this particular application wereto be treated by Cââ on an equal footing. If this is not done the authorities in Hong Kong are bound to regard any decision unfavourable to CPA as highly suspect.I accept, however, that there are

doubts about the propriety of a direction to CAA on this point and that any intervention of this kind by your Minister would be open to challenge in the courts. As you are proposing in any case to amend Section 3 of the Civil Aviation

Act we considered whether these difficulties could be

overcome by an amendment to the definition of British airline. I accept however that this would have far reaching effects and be difficult to justify while CAA has no substantial jurisdiction in Hong Kong or over Hong Kong

aircraft.

2 In these circumstances it is particularly important to

assure the Hong Kong authorities that any bias they may fear in the CAA procedures can be corrected and that they will not be faced with the argument, if the CAA decision happens to go against CPA, that because all the statutory procedures have been satisfied there are no grounds for your Minister

to vary the decision. We are not of course asking for a guarantee that a CPA will be given a licence. It would however be helpful to have an assurance that your Minister does not rule out the possibility of varying the CAA decision if this is the only way of ensuring fair treatment for CPA and that he recognises the need to take Hong Kong's interests and the future of our relations with the territory into account in any decision he may come to. It is not enough to tell the Hong Kong

Dd 0532000 800M 5/78 HMSO Bracknell

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