TNAG-0870-FCO40-1080-Air-services-between-Hong-Kong-and-the-UK-1979 — Page 143

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Hir Kerry Del Kr Salmon Sel A Mr Dick CAP

Hr Rogers CÍR Er Bryant CAIR1 Mr Whitaker CAP2 Mr Colejate CAA

MR TEBBIT

PUSS(T)

through Er KERRY Sol

AIR SERVICES UK-HONG KONG

1

We have a procedual problem over air services to Hong Kong, a solution to which involves giving a direction to the Civil Aviaticr Authority.

2

'

At present the only :cheduled service between this country and Hong Kong is provided by British Airways. The Hong Kong Government has for some time complained about the quality of the service provided and although PA claim to have put much effort into improving it, the complaints persist, The forerument of Hong Kong considers that service would probanty be Panned by the introsuction of competition; and has proposed discussions with HG on the subiect: They have in mind the introduction of a service by the Hong Kong based airline Culnay TaciCe Airway, (Crt.). At the same time we know that Laker are interested in oouraging, a Skytrain-type service as part of an (ultimately) envisaged London-long Kong-Lo.. Angeles- London service.

3

لي

The traffic rights to and from Hong Kong are reserved to the UK andțare of great importance to us in our bilateral negotiations with foreign governments. In these negotiations we are responsible for safeguarding the interests of Hong Kong and Crk Lut the net benefit to the UK is considerable. The Hong Kong Government are very sensitive about this; and it is important to retain their confidence that we do not unduly subvert their interests to those of the UK.

4

The legal situation is as follovs. Any Britich or Hong Kong airline needs a licence from the Civil Aviation Authority (CAA) to operate between the UK and Hong Hong. Any such airline other than BA, which is exempt, needs a licence from the long long licensing authority (HKLA ). The CAA hus duties under section the Civil Aviation Act 1971 in effect to further the interests of UK based airlines. There is a right of appeal from the CAA to the Secretary of State. There is no right of appeal against a decision of the HKLA.

5

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of

The normal procedure would be for cra to anuly to the CAA for a licence and for the CAA to sort out the conflicting interests of BA, CPA and Laker (and anyone else) in the usual way.

The Hong Kong Government feel with come justice

with some justice - that because of the bias of S.3 of the Act, this procedure would load the dice aquinat CPA. It is also likely that it would lead to conlicting decisions by the CAA and the IMLA which somehow or other the Secretury of State would have to sort out with the Hong Kong Government when