TNAG-0864-FCO40-1074-Involvement-of-Hong-Kong-in-air-services-agreements-1980 — Page 23

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funnel traffic on to the Hong Kong-London route. It would also develop Bahrain traffic into Gatwick if it obtained the necessary traffic rights. The proposals and supporting evidence had stood up to the most critical cross examination and the points of criticism by BA had been mostly on matters of judgement and instinct.

109. Laker's application appealed to the people of Hong Kong who were used to a free economy but his costings and market forecasts were questionnable. The route to Hong Kong could not be compared with the North Atlantic where there was a large charter market. Laker had not been granted a licence from the ATLA and the Hong Kong Government had not been provided with sufficient financial information; their concern on that aspect of Laker's application had not been allayed. The Hong Kong Government was anxious to improve the end to end London-Hong Kong route and if, as Laker had proposed, there were onward services round the world, there would be risk of delays.

110.

111.

112.

113.

The preference of the Hong Kong Government had been for Cathay to be the sole licence holder with the alternatives in order of preference of Cathay plus BCal or Cathay plus Laker or Cathay plus BCal plus Laker of BCal plus Laker or BCal alone or Laker alone or no one.

The decision of the ATLA stood until it was over-ruled. They had decided that a daily service was needed and they thought that the results of their decision would provide it. Both BA and Cathay had agreed that a sufficient service would be provided with Cathay and BA on the route. BA had maintained its objection to Cathay but it was a formal objection. No party had really objected to Cathay except that BCal and Laker had said that if only one carrier was to be licensed then it should be them.

Mr Keep said that Kai Tek airport was currently operating at 80% of its annual capacity and during two to three hours of the day it had been operating close to its peak. The IATA scheduling committee had attempted from the initial applications to transfer some operations out of the peak hours so that the airport capacity was not exceeded. In the 1980's it would be important to ensure that the use of the airport was maximised, and that move- ments with low load factors or without Hong Kong destined passengers were kept to a minimum. It was not permitted to schedule aircraft movements after 23.30 hrs, and after 24.00 only under specific rules which had resulted in an average of only one aircraft movement between the hours of 24.00 and 06.00.

Mr Beckman said that neither Cathay nor BCal would be effective competitors for BA. There was a substantial category of demand for low fare traffic and only Laker proposed to offer sufficient capacity to that type of traffic, both in the UK and Hong Kong. It was a British airline and licensing it would be consistent with the sound development of British Civil Aviation. The Hong Kong Government's representation had to be considered with circumspection, and the ATLA had taken the decision that Laker should be refused because they would not provide accommodation for first class passengers. The Hong Kong Government had made up its mind before Laker even applied for a licence. The Hong Kong Government appointed the members of ATLA, and the Officials of the Government were appointees of the Governor and could not be regarded as speaking for all the people of Hong Kong. Laker would accept the licensing of Cathay but maintained that to do so would be inconsistent with Section 3. If all three applicants were considered as equal Cathay would certainly be the most disadvantageous under the terms of Section 3, and would provide the least attractive service.