(d) He believes it would be unreasonable to expect British
airlines within the meaning of Section 3(1) to be granted exclusive rights to provide services between London and Hong Kong in view of the volume of traffic involved when there was an airline in that territory willing and able to participate in the provision of those services.
(e) He accepts the arguments for a competing service based in
Hong Kong, the evidence submitted on the loyalty which Cathay commanded locally, and the traffic which they could expect to draw from their services from other points to Hong Kong.
(f) In his view the Authority places too little emphasis on the
benefits to the development of the UK civil aviation industry of choice of service and competition on a route such as this.
The Secretary of State concludes from the above that the substantial new traffic likely over a period to be generated by a wider variety of services offers a reasonable prospect that four operators can over a period achieve an economic return on this route, and that he should accept the argument of Cathay and Laker that they be licensed on the route in addition to BA and BCal.
The Secretary of State therefore in exercise of his powers under Regulation 16(10) hereby upholds the Authority's decision to license BCal, and in addition directs the Authority to reverse its decision on applications 1B/24437 and 1B/24430 and grant licences to Cathay Pacific and Laker in the same terms as that already granted by the Authority to BCal, but without prejudice to the rights which Cathay already enjoy between Hong Kong and Bahrain.
No order is made as to costs.
Copies of this letter are being sent to British Airways, British Caledonian Airways, Laker Airways, Beaumont & Son (representing Cathay) and Hewitt, Woolacott and Chown (representing the Government of Hong Kong).
Yours faithfully