"I am frankly not satisfied with the present tightly
regulated international civil aviation arrangements. I believe that
a more liberal market environment would provide airlines with the
ability to offer a variety of products at a range of prices to satisfy
all sectors of consumer demand, would be more satisfying to consumers,
and would allow the airlines industry to continue to grow and develop
to the benefit of both government and consumers.
"I am very well aware of course that civil aviation has
had a very difficult year. But that is not because of any lack of demand
from airline passengers
indeed British Airlines carried in 1979
about nine per cent more than they did in 1978 but because of sudden
——
high increases in fuel prices. The prospects for 1980 are themselves
uncertain. But the aviation market has proved itself dynamic in the
past through all the fluctuations in the world economy, and for that
reason alone it would be a mistake to decide our long-term aviation
policy by reference just to short-term criteria -- that would be an
argument for fossilisation from a fear to take a view for the future.
"Of course in our civil aviation relations with many
overseas countries it is not open to us in practice to operate an open
and competitive system. Many governments insist that their airlines
should have 50 per cent of the market, irrespective of customer preference.
Some governments with very large financial commitments to their airlines
go to great lengths to protect them. In other instances airline operations
are determined as much by considerations of prestige as by commercial
forces. These factors militate against competition, and as long as
governments around the world direct their nationals onto their own
carrier and prop up uneconomic services with subsidies, it will not be
possible to speak in terms of world-wide competition in civil aviation,
/Although I