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CONFIDEN HAL
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11 JUL1979
CONFIDENTIAL
FM HONG KONG 100651Z JUL 79
TO IMMEDIATE FOREIGN AND COMMONWEALTH OFFICE
TELNO.959 OF 10 JULY.
INFO HONG KONG GOVT OFFICE LONDON
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YOUR TELNO,423 AND D.C.T TELNO.ALLOT 63:
AIR SERVICES ON THE LONDON-HONG KONG ROUTE.
1. WE HAVE NOW CONSIDERED THE AIR TRANSPORT LICENCE APPLICATIONS MADE BY BRITISH CALEDONIAN AIRWAYS LTD (BCAL) APPLICATION IB/24429,
AND BY LAKER AIRWAYS LTD (LAKER) APPLICATION IB/24430 AND
IB/24432, TO THE CIVIL AVIATION AUTHORITY (CAA).
2. WE BELIEVE CATHAY PACIFIC AIRWAYS LTD (CPA) IS SHORTLY TO SUBMIT ITS OWN APPLICATION AND HAVING REGARD TO THAT FACT IN THE
LIGHT OF THE STATUTORY AND OTHER MATERIAL LISTED IN M.!.F.T
WE REFER YOU TO WHAT WE SEE AS BEING THREE MAJOR DIFFICULTIES.
THESE ARE:-
(1) SECTION 3 OF THE 1971 ACT CREATES A LEGISLATIVE PREJUDICE
AGAINST AN INDEPENDENT OPERATOR HAVING ITS PRINCIPAL PLACE OF
BUSINESS IN HONG KONG (SUCH AS CPA), IN THAT IT DOES NOT FALL WITHIN THE DEFINITION OF BRITISH AIRLINE'' DESPITE THE FACT
THAT IT IS FOR ALL PRACTICAL PURPOSES CONTROLLED BY U.K INTERESTS
BASED IN LONDON. THE CAA, THEREFORE, WILL PROBABLY HAVE TO EXERCISE ITS STATUTORY AIR TRANSPORT LICENSING FUNCTION IN SUCH
A MANNER AS POSSIBLY TO EXCLUDE CPA FROM THE GRANT OF A LICENCE WHICH WOULD ENABLE IT TO COMPETE WITH BRITISH AIRWAYS (BA) OR ANY OTHER BRITISH AIRLINE ON A PARTICULAR ROUTE FOR SERVICES ON
WHICH THERE IS A NEED FOR COMPETITION. THE WORDS (SO FAR AS BRITISH AIRLINES MAY REASONABLY BE EXPECTED TO PROVIDE SUCH
SERVICES )' IN SECTION 3(1)(A) HAVE NOT SO FAR AS WE ARE AWARE
EVER BEEN CONSTRUED BY THE COURTS OF THE CAA, AND WE DO NOT
CONSIDER THAT WE CAN SAFELY RELY UPON A FAVOURABLE CONSTRUCTION
AS A MEANS OF AVOIDING THE LEGISLATIVE PREJUDICE REFERRED TO.
CONFIDENTAL
1OUR
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