Miss Stoddart MAED 1
CONFIDENTIAL
125
HERIFULS RECEIVED IN REGISTRY NO. 51 - 9 AUG 1979
DESK OFFICER
REGISTRY
INDEX
1.Act
• Take
N.
22
AIR SERVICES ON THE LONDON-HONG KONG ROUTE
1. Mr Cortazzi has asked for advice on how to reply to Mr Roberts' letter of 3 August containing the DOT's long- delayed response to Mr Cortazzi's letter of 22 June to Mr Steell My views (in the light of your very helpful minute of 6 August) are as follows; in the meantime you will have seen my minute of 7 August regarding the outcome of the Hong Kong Attorney-General's
talks with the DOT.
In his letter of 3 August Mr Roberts makes it clear that the Secretary of State for Trade's decision not to direct the CAA to regard CPA as on an equal footing with UK-based airlines was taken primarily for policy reasons. The only reason mentioned is Mr Nott's unwillingness to change by direction a provision clearly stated in the Civil Aviation Act of 1971.
3. It seems to me that there are equally strong policy reasons for taking a different view. The British Government's control over rights to and from Hong Kong, and its use of them as bargaining counters in air services negotiations are sensitive issues in terms of UK/Hong Kong relations. The question of rights on the London-Hong Kong route is particularly sensitive and needs to be handled very carefully. It is not, I think, essential from the point of view of UK/Hong Kong relations that CPA should be awarded the London route, though that would be a desirable outcome. But it is essential that the procedures through which a decision is reached are not only fair, but should be seen to be fair by all concerned. The DOT argue that any bias against CPA written into the procedures can be corrected by the Secretary of State for Trade if there is an appeal. I entirely agree with Mr Gardiner (his minute of 31 July) that it is better in principle to avert injustice rather than let it happen and then hope to remedy it. Moreover, I share your doubts about the practicability of overturning a CAA decision against CPA on appeal. If the CAA make it clear in recording their decision that they would or might - have awarded the route to CPA but for the bias against non-UK- based airlines written into the 1971 Act, well and good. The Secretary of State could no doubt change the ruling or direct that the case be heard again. But a great deal of time would have.been lost and much illwill generated. on the other hand, the CAA ruled in favour of one of the UK- based airlines without referring to the bias against CPA, he would, I suggest, find it very difficult politically to vary the ruling. CPA would then have a strong and legitimate grievance. Against this background it would be particularly difficult to resolve a difference of view between CAA and ATLA.
If,
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