XN000022-1980-06-18 — Page 15

"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