CONFIDENTIAL
CALL ON MR BLAKER BY MR JOHN SWIRE AND MR ADRIAN SWIRE, CHAIRMAN AND VICE-CHAIRMAN OF JOHN SWIRE & SONS LIMITED RESPECTIVELY:
CATHAY PACIFIC AIRWAYS
ESSENTIAL FACTS
1. John Swire and Sons Limited hold a 60% share of Cathay Pacific
Airways (CPA) and British Airways (BA) have 15%
2. For many years BA and their predecessor, BOAC, have had a
monopoly on the London-Hong Kong route. In recent years there
has been an increasing dissatisfaction in Hong Kong about the
standard of BA's service. Last summer CPA, British Caledonian (BCAL)
and Laker Airways decided to apply for licences to fly the route.
3. Since the route is a cabotage, ie domestic route, the decision
was not one for inter-governmental negotiation. Instead the decision
rested with the Air Traffic Licensing Authority (ATLA) in Hong Kong
and the Civil Aviation Authority (CAA) in the United Kingdom.
4. The Hong Kong ATLA held its hearings first last autumn and
decided to license both CPA and BCAL to fly 3 and 4 times weekly
respectively. This decision took many by surprise since it was
generally assumed that CPA only would be licensed. There is, however,
no right of appeal against an ATLA decision.
5. The CAA started their hearing in December last year and announced
on 17 March that they had decided to license BCAL only to fly 7 days
a week on the London-Hong Kong route. They maintained that the route
could only accommodate BA and one other carrier and judged that the
DC 10s operated by BCAL would provide the most flexible service on
the route, being smaller than the Boeing 747s which CPA proposed to
use. The CAA did not accept that there was sufficient passenger
demand to enable the larger aircraft to operate profitably. This has
particularly annoyed CPA because it was at the behest of Ministers
CONFIDENTIAL
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