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For discussion

on 8th July 1980

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MEMORANDUM FOR EXECUTIVE COUNCIL RECEIVED !!! REGISTRY NO. 21

1 8 JUL 1980

HONG KONG'S AIR LINKS WITH BRITAIN

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Introduction

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In October 1979 Members considéred memorandum XCC(79)97 which:

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(a) informed Members of the latest developments

regarding the possibility of another airline joining British Airways (BA) on the London/ Hong Kong air route; and

(b)

sought Members' advice on whether as a matter of policy the Hong Kong Government should advocate the introduction of a second airline on the route.

As regards (a) above, Members noted the developments leading up to the hearings by the Hong Kong Air Transport Licensing Authority (ATLA) and the United Kingdom Civil Aviation Authority (CAA), to be held in November and December 1979 respectively. In summary, three airlines had applied to both the ATLA and the CAA for a licence to serve the Hong Kong/London route in competition with BA, the sole existing carrier (under the present regulations, licences are required from both authorities in order to serve the route, except by BA which is exempted from licensing in Hong Kong). The

three airlines were British Caledonian Airways (BCal)

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Laker Airways (Laker) (both of which are UK-based airlines) and Cathay Pacific Airways (CPA).

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As regards (b) above, the Council advised

and the Governor ordered that the Hong Kong Government should advocate the introduction of a second airline on the Hong Kong/London route. The lines which it was proposed the Government should follow in so doing were set out in memorandum XCC(79)97. Briefly, it was proposed to support the application of a Hong Kong- based carrier (i.e. CPA) as the second airline on the route.

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The purpose of this Memorandum is to inform Members of developments since that time, and to seek the advice of Members on the attitude the Government should now take in respect of further applications to the ATLA as a consequence of these developments.

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