XN000022-1985-11-20 — Page 4

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WEDNESDAY, NOVEMBER 20, 1985

+CONSEQUENTLY, MANY, IF NOT MOST, BILATERAL AIR SERVICES ARRANGEMENTS PROVIDE FOR ONLY ONE AIRLINE TO BE DESIGNATED BY EACH PARTY TO OPERATE ALL ITS ROUTES OTHERS PERMIT NO MORE THAN ONE AIRLINE PER ROUTE FOR EACH SIDE,+ SIR JOHN SAID.

IN THESE CIRCUMSTANCES, SIR JOHN SAID, DESIGNATION OF MORE THAN ONE HONG KONG AIRLINE ON ANY ROUTE WOULD BE CONSIDERED ONLY IN CIRCUMSTANCES WHERE IT WAS JUDGED THAT MORE COMPETITION WAS NEEDED IN THE PUBLIC INTEREST AND THE TRAFFIC WAS SUFFICIENT TO SUSTAIN A SUBSTANTIAL OPERATION BY MORE THAN ONE HONG KONG AIRLINE.

SIR JOHN SAID THAT IN SEEKING RIGHTS TO SATISFY AN AIRLINE LICENSED TO OPERATE A NEW ROUTE OR IN DESIGNATING AN AIRLINE FOR AN EXISTING ROUTE, IT MIGHT BE FOUND THAT THE OTHER PARTY TO THE AIR SERVICES ARRANGEMENTS WAS TRYING TO EXACT A PRICE FOR THOSE RIGHTS OR THE DESIGNATION OF A NEW CARRIER RESPECTIVELY.

+ IF THIS PRICE WAS, IN THE OPINION OF THE GOVERNMENT, UNACCEPTABLE IN THE OVERALL INTERESTS OF HONG KONG OR UNDÚLY DAMAGING TO THE INTERESTS OF AN AIRLINE ALREADY OPERATING ANOTHER ROUTE BETWEEN HONG KONG AND THE DESTINATION COUNTRY, THEN THAT PRICE WOULD NOT BE PAID, HE SAID.

TURNING TO NON-SCHEDULED SERVICES, SIR JOHN SAID THAT UNDER THE RELEVANT PROVISIONS OF THE AIR TRANSPORT (LICENSING OF AIR SERVICES) REGULATIONS, IT WAS THE DIRECTOR OF CIVIL AVIATION WHO DECIDED WHETHER OR NOT TO GRANT A PERMIT AND WHAT CONDITIONS, APPROPRIATE TO THE NATURE AND CIRCUMSTANCES OF THE APPLICATION, TO ATTACH TO A PERMIT.

+THE DIRECTOR OF CIVIL AVIATION WILL NORMALLY APPROVE AN APPLICATION FOR A PERMIT FOR AN AD HOC, NON-SCHEDULED SERVICE IF THE APPLICANT AIRLINE HOLDING AN AIR OPERATOR'S CERTIFICATE HAS REASONABLY DEMONSTRATED THAT CORRESPONDING SCHEDULED SERVICES CANNOT SATISFY A GENUNINE DEMAND BY PROVIDING THE SERVICE OR CAPACITY REQUESTED, WHETHER FOR PASSENGERS OR CARGO, AT THE PRICE OFFERED.

+APPLICATIONS FOR NON-SCHEDULED SERVICES FOR THE SAME ROUTE WILL BE DEALT WITH ON A FIRST-COME-FIRST-SERVED BASIS. OF COURSE APPROVAL BY THE DIRECTOR OF CIVIL AVIATION MUST BE MATCHED BY EQUIVALENT APPROVAL BY THE OTHER ADMINISTRATION CONCERNED,+ SIR JOHN SAID.

SIR JOHN SAID THAT FOR MANY YEARS THERE HAD BEEN ONLY ONE ACTIVE HONG KONG AIRLINE.

HOWEVER, HE SAID, TWO ADDITIONAL AIRLINES HAD BEEN ESTABLISHED, ONE WAS ALREADY OPERATIONAL AND HAD MOUNTED A NUMBER OF CHARTER SERVICES, AND THE OTHER WAS PLANNING TO START OPERATIONS AT AN EARLY DATE.

/SIR JOHN