TNAG-0870-FCO40-1080-Air-services-between-Hong-Kong-and-the-UK-1979 — Page 149

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Miss Brown

Mr Cortazzi

CONFIDENTIAL

CIVIL AVIATION: HONG KONG

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19 JUN 1979

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113/01

114/6.

Mr Cortazzi asked in his minute of 8 June for advice

on Mr Steele's letter of the same date.

Mr Nott turned down Mr Steele's recommendation because

he rejects the idea of Government interference when an inde-

pendent body, the CAA, already exists to deal with competing

claims to a particular route. In theory the Hong Kong Government

should not object to putting their case to an independent body

which is known to be generally in favour of more competition.

They would however have to be reassured that it would give CPA

a fair hearing despite its obligations to keep in mind the

interests of UK-based airlines. Even if this can be done Hong

Kong are likely to be suspicious especially as DOT could not

continue the current discussions on the route once CAA hearings

had started. There could also be a serious problem if, eg

CAA decided in the end to allow BCAL a licence (only BA is

exempt from this requirement). The procedure proposed in

Mr Steele's submission would avoid these risks and he will

be explaining this more fully to his Ministers at tomorrow's

meeting.

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CONFIDENTIAL

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