TNAG-0870-FCO40-1080-Air-services-between-Hong-Kong-and-the-UK-1979 — Page 109

CONFIDENTAL

APPLICANTS, BUT INSTEAD WERE TO BE HANDICAPPED BY U.K LEGISLATION.

NO MORE ACCEPTABLE WOULD BE THE CONTINUATION OF THE PRESENT BA MONOPOLY WHICH IS THE LIKELY PRACTICAL EFFECT IF, AS IS POSSIBI THE CAA AND THE ATLA, AFTER FULL HEARINGS, WERE TO REACH DIFFERENT CONCLUSIONS. BOTH THE HONG KONG GOVERNMENT AND THE LOCAL PUBLIC REGARD COMPETITION FOR BA ON THIS ROUTE FROM ANOTHER BRITISH CONTROLLED AIRLINE (AS OPPOSED TO A FOREIGN AIRLINE) TO BE NOT ONLY

DESIRABLE BUT NECESSARY IF THE PUBLIC ARE TO BE PROVIDED WITH A

PROPER SERVICE.

6. WE DEAL SPECIFICALLY WITH THE OPTIONS SET OUT IN PARAGRAPH 4

AS FOLLOWS:-

(1) A DIRECTION SUCH AS THAT REFERRED TO IN OPTION (A) WOULD ENABLE CPA TO APPEAR BEFORE THE CAA ON THE SAME BASIS AS LAKER BUT PROBABLY NOT SO WELL PLACED AS BCAL. TO ENSURE FAIR COMPETITION A DIRECTION IN THE FORM OF THAT PROPOSED OUGHT TO BE SUPPLEMENTED BY A DIRECTION IN THE FORM OF THAT SET OUT ABOVE AS OPTION (B). WE SUBMIT THAT A DIRECTION EMBRACING THE CONCEPTS IN OPTIONS (A) AND (B) IS JUSTIFIABLE FOR THE FOLLOWING REASONS:

(1) THE PRINCIPAL SHAREHOLDERS OF CPA ARE:

SWIRE PACIFIC LTD (A H.K PUBLIC COMPANY)

H.K AND SHANGHAI BANKING CORP.(A H.K PUBLIC COMPANY) BRITISH AIRWAYS ASSOCIATED COMPANIES LTD.

69%

25%

15%

(11) TO THE BEST OF OUR KNOWLEDGE AND BELIEF, SWIRE PACIFIC LTD, IS EFFECTIVELY CONTROLLED BY A UNITED KINGDOM LIMITED LIABILITY COMPANY, NAMELY, JOHN SWIRE AND SONS LTD., AND WE FURTHER BELIEVE THAT MOST OF THE OTHER SHAREHOLDERS OF SWIRE PACIFIC LTD., AND THE SHAREHOLDERS OF HONG KONG BANK ARE LIKELY TO BE U.K NATIONALS AS DEFINED IN SECTION 64(1) OF THE

1971 ACT.

(111) ANY DOUBT THAT CPA IS CONTROLLED BY U.K NATIONALS 15, OF COURSE, NOT FATAL IN ANY EVENT AS THERE IS PROVISION IN SECTION 3(1) FOR THE SECRETARY OF STATE TO APPROVE THE SHARE-

HOLDERS OF CPA FOR THE PURPOSES OF THAT SUB-SECTION.

(IV) THUS THE ONLY STUMBLING BLOCK WE SEE TO THE TREATMENT OF CPA AS A BRITISH AIRLINE IS THE FACT THAT IT DOES NOT HAVE ITS PRINCIPAL PLACE OF BUSINESS IN THE U.K.

4 CONFIDE

[(W) THERE