route in response to the heavy pressures from Hong Kong while still maintaining his political credibility. Against this background, it is difficult to see how the Hong Kong Government can do other than support before the ATLA a solution similar to the one he adopted in London. Nevertheless, for the Government to do so would mean a change in the arrangement it advocated at the ATLA and the CAA hearings. The Government's opinion was that the route could not support more than two competing daily services, but this opinion was based on traffic forecasts over the next two or three years. To quote Sir Freddie Laker, forecasting is not an exact science and as Mr. Nott says, it could well be that there are hitherto untapped sources of traffic. In this respect there are many unknown factors, such as: the dynamic impact on the travelling public of a change from a long-established monopoly to a position of competitive services; the possibility of diversion from non-British carriers; the possibility of expansion of the China tourist trade and its effect on demand on the cabotage route.
19.
In the circumstances it is proposed that, provided no adverse circumstances (e.g. financial difficulties) in respect of any of the airlines come to light, the Hong Kong Government should support any renewed application made to the ATLA by Laker to serve the Hong Kong/London route, and by BCal and CPA to have the restrictions on their frequencies removed. The Government would argue that the Secretary of State for Trade's direction to the CAA has changed the situation. He has advocated a much more open policy than the Hong Kong Government has been pursuing. While the Hong Kong Government still has some reservations on the consequences for the airlines involved, it must consider that the Secretary for State may be right - and certainly the Hong Kong public appears to think so (see paragraph 21 below). Above all, the Government would not wish to see, yet again, a position in respect of licensing at one end of the route inconsistent with the licences granted at the other.
Public relations aspects
20.
And they
Reaction by the two successful appellants (CPA and Laker) has naturally been enthusiastic. BCal has expressed some disappointment at Mr. Nott's decision but has declared that they will continue with their plans to serve the route from 1st August 1980. have said that they will apply to the ATLA to have the restrictions on their licence removed (paragraph 7 above). Although their public statements have been guarded, BA appear to be resigned to being faced with competition from as many as three airlines.
CONFIDENTIAL