TNAG-0777-FCO40-981-Involvement-of-Hong-Kong-in-air-services-agreements-1978 — Page 155

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DRAFT

TE ON THE MACHINERY FOR ESTABLISHING AIR TARIFFS AND CAA RESPONSIBILITIES

IN THE MATTER

1. The Civil Aviation Authority is the UK body responsible for the approval of air tariffs (i.e. passenger fares and cargo rates) and is concerned with

the tariffs of the following kinds:-

(a)

international tariffs (i.e. those between the UK and foreign

countries or between British overseas territories and foriegn

countries);

(6)

cabotage tariffs (i.e. those between the UK and British overseas

Overseas territories territories or between two or more British); and

(c)

domestic tariffs (i.e. those within the UK, Channel Islands,

and Isle of Man).

Category (c) is mentioned for completeness but it does not fall within the scope

of this paper.

2.

In discharging these duties, the Authority must have regard to the provisions

of the Civil Aviation Act 1971, the procedures set out in the Civil Aviation

Authority Regulations 1972, the Policy Guidance of February 1976 (Cmnd 6400),

and, in the case of international tariffs, the UK's obligations under international

treaties in the form of a series of bilateral Air Service Agreements. The Policy

Guidance exhorts the Authority, subject to international constraints, to seek

to secure tariffs which are rational, simple and enforceable; it adds that as

a guiding principle for the longer term each charge should be related to costs

at a level which will yield sufficient revenue to cover the costs of efficient

operators, including an adequate return on capital. Against that background,

the procedures followed for negotiating, considering and approving tariff proposals

are outlined below.

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