TNAG-0777-FCO40-981-Involvement-of-Hong-Kong-in-air-services-agreements-1978 — Page 161

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at its discretion.

These procedures are complemented in some cases by procedures

in the overseas territories. Where the two produce differing decisions, it is

arguable that neither prevails, in which case carriers would find themselves

in the impossible position of having to breach their obligations to one or other of the regulatory bodies concerned (or of having to suspend operations

8.

The criteria applied by the Authority when considering proposals for these

tariffs is much the same as those applied to international tariffs (except that

cargo rates are not regulated and levels are left to the commercial judgement

of the operators). Cabotage tariffs are not subject to the provisions of ASA's

but, nevertheless, they must maintain a sensible relationship to international

tariffs in order to avoid gross anomalies and distortion of traffic flows which

could provoke retaliatory action by foreign carriers and governments.

In some

circumstances where tariffs on a cabotage route were seriously affecting the

international fare structure, the UK might be obliged by its international obligatio

to modify the cabotage tariff inquestion.

9.

Although the procedures for these tariffs are statutorily prescribed, the

Authority, within these procedures processes proposals along similar lines to

those adopted for international tariffs. Carriers are called upon to provide

economic justification which is assessed against the criteria in the Guidance

and the comparable international tariffs; and the overseas territories affected

are notified of the proposals, given an abstract of the justification, and invited

to comment. The significant differences are that there are no ASA deadlines to

observe (although for the reasons explained above, international obligations

cannot be disregarded) and it is open to the overseas territories to lodge a formal objection (instead of merely commenting). In the event of such an

objection, the Authority would almost certainly exercise its discretion to hear

the objector who could thus be represented at the hearing. Although deadlines

are not usually given for comments, it is nevertheless important for overseas

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