TNAG-0870-FCO40-1080-Air-services-between-Hong-Kong-and-the-UK-1979 — Page 138

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DEPARTMENT OF TRADE

1 VICTORIa street

LONDON SWIH OET

TELEPHONE DIRECT LINE 01 2153212

SWITCHBOARD 01 215 7871

HAH Cortazzi Esq CMG Foreign & Commonwealth Office Far Eastern Department King Charles Street London SW1A 2AH

18 June 1979

Dear Hush,

Thank you for your letter of 13 June about air services on the London-Hong Kong route.

Two UK airlines, BCAL and Laker, have now filed applications with the CAA for licences to operate scheduled services between London and Hong Kong.

My Secretary of State discussed the procedural aspects of this with other DOT ministers and officials (including the Department's Solicitor) on 13 June.

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He has decided that he is not prepared to issue a direction to the CAA requiring them not to consider any such applications. His reasoning is that any such direction could only be construed as Ministerial interference contrary to the wishes of Parliament as expressed in the 1971 Act for which there is not just cause. He is even more reluctant to give a further direction to the CAA to issue a licence to an airline whose principal place of business was not in the UK, the Channel Islands or the Isle of Man without the due processes having been gone through; he feels that such a step could place him in a position of acute political embarrassment. He acknowledges that the wording of the 1971 Act could be interpreted as loading the dice in favour of UK based airlines to the disadvantage of a Hong Kong based airline, were such an airline to express an interest, but the due processes allow for Hong Kong interests both Government and airline to make their views known to the CAA prior to that body reaching its decision and to himself if the matter comes to him on appeal. Whatever procedure is used there can be no practical outcome which satisfies all parties but, he would be happier rebutting criticism of the outcome if the due processes had been gone through.

We did also consider whether it would be proper for the Secretary of State to issue a direction to the CAA that, in considering applications for licences for the Hong Kong route, it should treat Hong Kong based airline(s) no less favourably than UK based airlines, but on the advice of the DOT Solicitor the Secretary of State decided that it would not be proper for him so to direct.