the case, came to him on appeal (as inevitably it would).
6
As a result of this, the liong Kong Government have asked HMG
These would include a survey of for discussions on the problem. existing services and comparison with other routes, definition of the air transport market, and a study of the possible introduction of competition.
7
It would be very difficult for the Department to participate in such discussions if there was any chance that subsequently an application may be made to the CAA, since, if we had to consider an appeal against the CMA's decision, we might be held to have
A fortiori it would be even more difficult prejudiced our position. for the CAA to do so - indeed they have told us that they could not participate if there were any possibility that they might have to hear an application for a licence to onerate on the route. the talks are to take place, we need the expertise of the CAA.
8
If
The only way I can see out of this dilemma is to direct the CAA under S.4(3)(b) of the 1971 Act not to entertain applications
thing with for the UK/Hong Kong route; then to negotiate the whole the Hong Kong Government; and ultimately to direct theto issue
S.4(3)(b) clearly a licence in accordance with the outcome. envisages this sort of problem since it empowers the Secretary of State;to give a direction to the CAA on any matter affecting IMG's relations with a country or territory outside the UK.
9
In holding the discussions we would have to take considerable care to assure Laker, BA, and other interested British lines that their interests were safeguarded as well as they are by CAA proce- dures. This would involve keeping them informed of the discussions and of the recommendations which we had it in mind at the end of the discussions to make to you. I have it in mind that at that stage we would undertake that we would put to you any representation they cared to make and offer them an opportunity if they wished to make representations to you orally.
10 Such a procedure would be a sort of cross between a CAA hearin
It is unusual; and a bilateral negotiation with a foreign country. but so are the circumstances. I am sure we can make it work.
Before we
I have discussed the problem informally with the CAA. make a Direction we have to consult the,CAA formally and on this occasion the Chairman has asked that he, personally be consulted. If our proposal. is acceptable to you in brinciple, 1 would propose to write to the Chairman accordingly and provided he is content issue the Direction.
12 We have formulated these proposals in close consultation with the Solicitor's staff. It is however important that they should be legally water-tight and I am therefore sending this submission to you through him.