(London-Hong Kong)
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n to be barred because it had been previously. May I ask for your ce on this point, Mr. Speaker?
Speaker: It is quite simple. I am to make another statement to- y when I have looked at the matter but if a question is not permissible Table Office it is not permissible as ementary question. It is as simple
I shall look at the matter further I need to correct myself.
Dalyell: Further to that point of Mr. Speaker. When you look at the further tomorrow, will you take count that question No. 32 on the Paper on Diego Garcia implied rations of troop movements?
Speaker: That point has not
me.
R SERVICES (LONDON-
HONG KONG)
ecretary of State for Trade (Mr. | lett): With permission, Mr. in view of the widespread inter- e matter, I should like to make a t about the decision that I have oncerning air services between
and Hong King.
ear three airlines, British Cale- Laker and Cathay Pacific, a Hong sed airline, applied to the Hong r Transport Licensing Authority Civil Aviation Authority for licen- erate on the London-Hong Kong addition to British Airways. At British Airways provides the only rvice, although there are, of ready a large number of services Hong Kong and other European
uthorities heard evidence separ- hese applications. In December Kong authority licensed Britsh n and Cathay Pacific, but re- eir frequency of service to four flights a week respectively. In s year, the Civil Aviation Au- nounced its decision to license sh Caledonian.
> applicants who were unsuc- ore the Civil Aviation Authority appeals to me under the provi- gulation 16 of the Civil Aviation
Air Services
17 JUNE 1980
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Authority Regulations 1972. I also re- ceived a number of representations, in- cluding one from the Government of Hong Kong, that under the powers conferred on me by section 4(3) of the Civil Avia- tion Act 1971, I should direct the authority to license Cathay Pacific in the interests of the United Kingdom's rela- tions with Hong Kong.
I have given this matter the most careful consideration, in particular against the criteria set out in section 3 of the Act, and I found myself in disagreement with the Civil Aviation Authority in a number of ways. In particular, I was convinced by Sir Freddie Laker's contention that there is a large untapped market for this route if fares are pitched at the right level. In his evidence he described this market as consisting of
"the forgotten men and women at the bottom end of the market
>>
who might wish to fly if they could afford to do so. I find myself in agreement with this dynamic approach to civil aviation, and in my view it should be acknow- ledged.
I also felt that the authority had placed too much emphasis on the economics of the proposed additional services in the short term, and too little on the benefits to the development of the United Kingdom civil aviation industry generally of choice of service and competition on a route such as this-in particular, competition with other non-British airlines.
I felt that it was in the interests of air- line passengers that they should be offered a wider choice of service than exists at present, that it would be unrea- sonable to expect British airlines, within the meaning of section 3(1) of the Act, to be granted exclusive rights when Cathay Pacific are based in Hong Kong and com- mand much local loyalty, and can expect to draw traffic from their network of regional services.
I concluded therefore that the substan- tial new traffic likely to be generated over a period by a wider variety of services would offer a reasonable prospect that four operators could, over a period, achieve an economic return on this route.
I have accordingly upheld the Civil Aviation Authority's decision to license British Caledonian but, in addition, have directed it to reverse its decisions on the other two applications and to issue licen-
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(London-Hong Kong) ces in the same terms to Cathay Pacific and Laker, but without prejudice to the former's existing rights between Hong Kong and Bahrain. The authority and the other parties to the appeals are being informed of my decision today.
As I have reached this decision by the normal appeal criteria, I do not intend to issue a political direction under section 4-and I have informed the Hong Kong Government accordingly.
I believe that my decision will be wel- comed by airline passengers generally, and in Hong Kong, where freedom to compete is one of the cornerstones on which the economic success of Hong Kong has been built. I hope, therefore, that the Government of Hong Kong will lend support to the applications which Laker may now wish to renew to the Hong Kong Air Transport Licensing Authority and to any applications which British Caledonian and Cathay Pacific may wish to make to increase the fre- quency of their services, should they be- lieve it is in their interests to do so.
Secretary of State will be aware that in this extraordinary and surprising decision he has effectively overturned a CAA licence decision. Does he recollect that, in recommending the Civil Aviation Bill to the House recently, he argued that a role in licence applications and that he Secretary of State should play less of a
should give greater scope and authority to the CAA? In this early decision on a licence application, is he not totally confounding the policy that he says underlines the Bill?
Mr. John Smith: I am sure that the
Is he aware that in the evidence that was given at great length to the CAA at the licence hearing nearly everyone except Laker argued that the market was limited in scope and demand? The CAA was clear in its decision that this was not a North Atlantic situation. It said in crystal clear terms that on the evidence that was given it believed that too many carriers would destroy the route and would not provide a proper service to the public.
Does the right hon. Gentleman realise that if he takes a different view from the body that was established to judge these matters on the same evidence he under- mines any confidence in its future deci- sions? Has he accepted evidence from