XN000022-1987-02-18 — Page 4

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WEDNESDAY, FEBRUARY 18, 1987

DESIGNATION WAS THE NOMINATION OF AN AIRLINE TO OPERATE SCHEDULED SERVICES ON A SPECIFIC ROUTE. SUCH SERVICES WERE GOVERNED BY BILATERAL, INTER-GOVERNMENTAL AIR SERVICES ARRANGEMENTS. IN THE CASE OF HONG KONG, IT WAS, AT PRESENT, UNITED KINGDOM/SECOND COUNTRY AIR SERVICES ARRANGEMENTS WHICH COVERED HONG KONG ROUTES.

MR JACOBS EXPLAINED THAT INTERNATIONAL AIR TRANSPORT OPERATED UNDER A HIGHLY REGULATED SYSTEM AND THE BILATERAL AIR SERVICES ARRANGEMENTS FORMED AN INTEGRAL PART OF THAT SYSTEM.

+ IF THE RIGHTS TO OPERATE ON A PARTICULAR ROUTE ARE AVAILABLE WITHOUT THE NEED FOR ANY FURTHER INTER-GOVERNMENTAL NEGOTIATIONS THE HONG KONG GOVERNMENT WILL REQUEST THE UNITED KINGDOM GOVERNMENT TO DESIGNATE THE LICENSED HONG KONG AIRLINE TO OPERATE THE ROUTE. +ASSUMING THAT THE DESIGNATION IS ACCEPTED BY THE OTHER GOVERNMENT INVOLVED AND OTHER REQUISITE FORMALITIES, SUCH AS THE GRANT OF THE NECESSARY OPERATING PERMISSION TO THE DESIGNATED HONG KONG AIRLINE BY THE AERONAUTICAL AUTHORITIES OF THE OTHER COUNTRY CONCERNED, ARE COMPLETED, THEN, AND ONLY THEN, MAY THE HONG KONG AIRLINE COMMENCE SERVICES ON THE ROUTE.+

IF RIGHTS TO OPERATE SCHEDULED SERVICES ON THE PARTICULAR ROUTE DID NOT EXIST, THEN THE SITUATION WAS FAR MORE COMPLEX AND WAS LIKELY TO TAKE COMSIDERABLY LONGER TO RESOLVE.

+WHEN RIGHTS DO NOT EXIST, THIS WILL BE DUE TO EITHER THE COMPLETE LACK OF AIR SERVICES ARRANGEMENTS BETWEEN THE UNITED KINGDOM GOVERNMENT AND THE GOVERNMENT OF THE OTHER COUNTRY CONCERNED, OR THE FACT THAT THE EXISTING AIR SERVICES ARRANGEMENTS DO NOT PROVIDE FOR THE ROUTE FOR WHICH THE HONG KONG AIRLINE HAS BEEN LICENSED.

+ALSO, THERE MAY BE NO PROVISION TO DESIGNATE A SECOND HONG KONG AIRLINE FOR THE ROUTE UNDER EXISTING AIR SERVICES ARRANGEMENTS,+ HE ADDED.

IF THERE WERE NO EXISTING AIR SERVICES ARRANGEMENTS, THEN THE HONG KONG GOVERNMENT COULD REQUEST THE UNITED KINGDOM GOVERNMENT TO OPEN NEGOTIATIONS WITH THE GOVERNMENT OF THE OTHER COUNTRY CONCERNED.

IN CIRCUMSTANCES WHERE THERE WERE EXISTING AIR SERVICES ARRANGEMENTS NOT SPECIFICALLY COVERING THE ROUTE FOR WHICH THE LICENCE HAD BEEN GRANTED, OR WHERE EXISTING ARRANGEMENTS ONLY PROVIDED FOR THE DESIGNATION OF ONE AIRLINE FROM EACH SIDE, THE GOVERNMENT WOULD CONSIDER REQUESTING THE UNITED KINGDOM GOVERNMENT TO SEEK RIGHTS BY NEGOTIATING AMENDMENTS TO THE EXISTING AIR SERVICES ARRANGEMENTS WITH THE GOVERNMENT OF THE OTHER COUNTRY CONCERNED.

/MR JACOBS .....................