TNAG-0936-FCO40-1155-Visit-of-Norman-Fowler--Minister-of-Transport--to-Hong-Kong--1980 — Page 39

AIR SERVICES TO HONG KONG LATEST DEVELOPMENTS

London/Hong Kong Route Applications

Line To Take (defensive)

Mr Fowler should not raise the subject of civil aviation in Hong Kong since it is a most sensitive subject at present in view of the UK Civil Aviation Authority's decision to licence British Caledonian rather than Cathay Pacific, the Hong Kong-based carrier, in addition to British Airways to operate scheduled services on the London-Hong Kong route. If the subject is raised he may say that it would be inappropriate for him to comment on the decision or on the likely outcome of any appeal to the Secretary of State for Trade.

Background

For some years there was growing discontentment in Hong Kong about the standard of service, punctuality etc. that BA were offering on their scheduled services on the London-Hong Kong route.

Last year British Caledonian, Cathay Pacific and Laker Airways applied to the Hong Kong Air Transport Licensing Authority and to the UK Civil Aviation Authority to operate scheduled services on the route. The Hong Kong ATLA decided in favour of BCal and CFA. There is no appeal against their decision. The CAA recently decided in favour of BCal only on the route in addition to BA. This has caused a predict- able furore in Hong Kong and there will almost certainly be appeals for CPA (and Laker) to the Secretary of State for Trade.

Civil Aviation International Relations Division

Department of Trade

24 March 1980