DRAFT TELEGRAM
TO: HONG KONG
CONFIDENTIAL
IMMEDIATE
PERSONAL FOR GOVERNOR
Priority
Repeat/to Ottawa (for Roberts), Washington
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This disin
London-Hong Kong Air Route Appeals
1 The Secretary of State for Trade has considered the appeals
submitted by Cathay Pacific Airways (CPA) and Laker Airways
against the Civil Aviation Authority's decision to licence
British Caledonian Airways (BCAL) on this route.
2 He has also considered the submission by the Hong Kong
Government which urged him to make a direction in favour of
CPA, using his powers under Section 4 of the Civil Aviation Act
1971 (your telnos. 668 and 669).
3
The Secretary of State has decided to direct the CAA to
issue licences to both CPA and Laker on the same terms as that
they have already granted to BCAL, but without prejudice to
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CPA's existing rights between Hong Kong and Bahrain.
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a)
that the CAA had given undue weight to the
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In reaching this decision the Secretary of State considered -
traffic forecasts of BCAL and Cathay, and had
been unduly dismissive of the possibility of
substantial new traffic being generated by a
wider choice of services;
b) that the Authority had placed too much emphasis
on the economics of the proposed additional
service in the short term;
1