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Air Services
1002
would also ask this question of the I ord: in the airline business, is not are equity of an airline based largely ; assets? The average airline's main is its licence to operate. Without its whole equipment is virtually ess. Therefore, if at short notice cence is going to be modified, altered allenged, does that not seriously lice the equity of the airline in jon? May I ask the Minister whether uld not review this situation and n us of some means by which to ish the validity and protection of licences?
+.m.
d TREFGARNE: My Lords, I am d to noble Lords for what they have I am sorry that they were not receptive to this Statement. This hinged on the judgment that my honourable friend made upon the available on this route. My right rable friend came to the conclusion he figures advanced by Laker in original application were more likely ve justified than the more pessimis- ures which the authority took into it when they made their original ɔn. I can tell the noble Lord, Beswick, that my right honourable had no additional information him when he considered this Under the procedure, he is not ted to do that but only to have to the facts as they were put before thority at the original application. is entitled to consider any further ation of the facts that the original to the application put before the ity at that time.
noble Earl, Lord Amherst, referred Et he thought was the dilution (if the correct word) of the effect of ence originally granted to British nian and asked whether they were ive any compensation. The origi- nce was granted only two or three
ago, in March. There is no n of compensation. In any event, Ive said, we believe that there is t business for all four carriers route.
less BURTON of COVENTRY: ds, as the House knows, the Civil n Bill has gone to ground in the ins and we are awaiting its Second
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[ 17 JUNE 1980 ]
1003
Hong Kong-London
Reading here. As my noble friend Lord Beswick has said, this Bill gives much more power to the Civil Aviation Auth- ority. I am in favour of more choice for air travellers. May I ask the Minister whether I am correct in understanding the background to this matter when I say that I understand that the service given by British Airways to Hong Kong was not deemed satisfactory and that someone suggested that British Caledonian should apply for a licence? Is the noble Lord aware and I must put this in the form of a question-that I, personally, think that British Caledonian is a first- class airline and I have always admired its slogan, We never forget that you have a choice "? It would be useful if more airlines felt the same. Is he also aware that Cathay Pacific is reckoned also to be one of the best airlines in the world? At the time that the decision was reached, I regretted that British Caledonian and Cathay Pacific were not included in the granting of a licence.
66
May I ask three specific questions? Does it not seem unfortunate that the Civil Aviation Authority and the Govern- ment did not get together a little earlier on this matter? I am not talking about the appeal but about the application. Did they, in fact, get together; and is this a change of heart? Secondly, under the new arrangement, is it suggested that British Airways should have the larger share of the operation? Thirdly, if, as I understand it, British Airways did not make full use of the quota that they were given for the service to Hong Kong, could we not have a more equitable arrangement in the future? If that could be done, would it not help British Cale- donian to overcome the financial draw- backs that they now fear and which they had no reason to suspect would be theirs under the ruling given by the Civil Aviation Authority?
Lord TREFGARNE: My Lords, there is no question of the Government getting together with the CAA in the first instance when the authority are considering the initial application. That, I think, would be wrong. The Government have a role in this matter only when there is an appeal from the original decision of the authority; and that is what has happened in this case. As for British Airways' share of the market, to which the noble Baroness
1004
Air Services
referred, the future share of the market will depend upon the success of the individual airlines in a very competitive situation.
Lord TAYLOR of GRYFE: My Lords does the noble Lord accept that this is an industry in which regulation is essential and that the Civil Aviation Authority is the appropriate authority to weigh up all aspects of applications for licences? Is there a precedent for the Secretary of State overturning a decision of the Civil Aviation Authority? Does it not under- mine the authority of the CAA in viewing future licences or is it now Government policy that there has to be a "free for all" on many other routes? Is that the logic of the decision in this particular case?
Would the noble Lord accept, too, that British Caledonian have entered into sub- stantial commitments in order to service the licence that they were given-including the setting up of a maintenance depot in Scotland in an area of very substantial unemployment in order to increase em- ployment facilities in the maintenance of aeroplanes? In view of all these circum- stances, does the noble Lord not accept the suggestion made by the noble Lord, Lord Beswick, that this might be reviewed with the Civil Aviation Authority?
Lord TREFGARNE: My Lords, I think that the commitment to which the noble Lord referred, the British Caledonian engineering base, was made long before this matter became an issue. It would not be fair to say that they entered into that commitment simply for the purpose of operating this route.
Lord MONSON: My Lords, may I congratulate the Government on living up to their free enterprise and free com- petition philosophy in this instance to the great benefit of the consumers? May I ask the Minister whether the Government will now consider abolishing, or at any rate limiting, the power of the CAA to impose monopoly or semi-monopoly con- ditions on other routes and allow much freer competition, subject only to safety considerations?
Lord TREFGARNE: No, my Lords; I am afraid that I cannot accept that suggestion. The authority will remain as