XN000022-1980-06-18 — Page 16

5

Although I espouse the ideal I do not suggest that it is proving a

realistic target in the short term.

"In the case of the London-Hong Kong route, relations with

foreign governments were happily not an issue. It is know!I

to use the jargon as a cabotage route. In my judgement the decision

on the number of carriers turned above all on the assessment I had to

make of the effect of greater competition on traffic demand.

One point

of view is that steady growth of the existing market is the most that

can be expected. The other, more radical, view is that new types of

service and new types of low fare will open up a much wider market,

and draw in hitherto untapped sources of traffic. It will attract, to

use Freddie Laker's expression, the forgotten men and women at the

bottom end of the market".

"I concluded that the substantial new traffic likely to

be generated over a period by a wider variety of services and fares

offered a reasonable prospect that four carriers could over a period

achieve an economic return. I therefore accepted the argument of

Cathay and Laker that they should be licensed on the route in addition

to British Airways and BCAL.

"I believe also that British airlines have lost business

in the recent past to our international competitors between Europe and

Hong Kong and this must partially be attributed to the past restriction

to one carrier.

"My decision does not necessarily mean that four competing

services will be on offer immediately. The timing of commencing flights,

the frequency, and indeed whether they want to fly at all, are matters

for the airlines themselves. Before new airlines come onto the route

they require licences from the authorities both here and in Hong Kong.

The necessary