00 WASHINGTON
$ 270
CONFIDENTIAL
FROM DOT 121545Z
TO IMMEDIATE WASHINGTON
In viel
willian's
द्द
TELEGRAM NUMBER ALLOT 71 OF 12 JUNE
а
FOR BAKER FROMROBERTS
MARD
NAD HRIGD
Miss Bunn
Riza
(81)
Ji
16
HK
6
12 JUN 1980
ASILER.
по
FAB
PA
713.6 1. THE SECRETARY OF STATE FOR TRADE EXPECTS TO ANNOUNCE ON 17 JUNE
HIS DECISION ON THE APPEALS BY CATHAY PACIFIC (CPA) AND LAKER
AGAINST THE CAA'S DECISION TO LICENCE ONLY BCAL IN ADDITION TO
BRITISH AIRWAYS FOR THE HONG KONG ROUTE. STRICTLY FOR YOUR OWN
INFORMATION THE SECRETARY OF STATE HAS DECIDED TO DIRECT THE
CAA TO ISSUE LICENCES TO CPA AND LAKER. THE PRINCIPAL GROUNDS FOR
HIS DECISION ARE THAT COMPETITION, AND THE NEW LOW FARES PROPOSED
BY LAKER WILL OPEN UP A WIDER MARKET, AND THAT THE CAA PLACED TOO
GREAT AN EMPHASIS ON THE SHORT TERM ECONOMICS OF THE PROPOSED
ADDITIONAL SERVICES.
2. THE DECISION IS BOUND TO BE CONTROVERSIAL AND WILL BE ATTACKED
PARTICULARLY BY BCAL AND BA. THERE MAY ALSO BE ATTEMPTS TO SUGGEST
DISAGREEMENT BETWEEN THE SECRETARY OF STATE AND MR TEBBIT ON THIS
DECISION, ESPECIALLY AS THE LATTER WILL NOT BE IN THE UK WHEN THE
ANNOUNCEMENT. IS MADE. FOR THIS REASON MR TEBBIT WISHES TO ISSUE
A STATEMENT TO COINCIDE WITH THE ANNOUNCEMENT HERE (3.30 LONDON TIME ON 17 JUNE) INDICATING HIS OWN ASSOCIATION WITH THE RULING.
WE WILL SEND A DRAFT OF THIS STATEMENT TO YOU VERY EARLY NEXT WEEK
AS SOON AS IT IS CLEARED HERE. THIS TELEGRAM IS THEREFORE PUT TO
YOU ON NOTICE AND TO GIVE YOU AN OPPORTUNITY TO CONSIDER THE BEST WAY
OF PUTTING THE STATEMENT OUT WHEN MR TEBBIT IS IN ANNAPOLIS.
3. THE AMERICANS MAY SEE THIS DECISION AS A MOVE TO AN OPEN SKIES
POLICY AND WE WILL WANT TO AVOID GIVING SUCH AN IMPRESSION. CERTAINLY
THE DECISION INDICATES THE GOVERNMENT'S INTENTION TO INTRODUCE
WIDER COMPETITION IN CIVIL AVIATION BUT THIS HAS TO BE ON THE BASIS
OF FAIR AND EQUAL OPPORTUNITIES BETWEEN AIRLINES SUCH AS CAN BE
ACHIEVED ON THIS CABOTAGE ROUTE, BUT WHICH RARELY APPLY IN INTERNATIONAL CIVIL AVIATION.
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