TNAG-0964-FCO40-1183-Air-services-between-the-UK-and-Hong-Kong-1980 — Page 184

CONFIDENTIAL

C) THIS SITUATION HAS ARISEN BECAUSE, BY ITS TERMS OF REFERENCE,

LIKEE THHOSE OF THE HONG KONG AIR TRANSPORT LICENSING AUTHORITY, THE DECISION OF THE CAA WAS NARROWLY BASED AND THE PRODUCT OF A QUASI-LEGAL PROCEDURE. IT WAS THUS DEBARRED FROM TAKING THE COMMON SENSE VIEW THAT THE ROUTE SHOULD BE SHARED BETWEEN THE TWO DESIGNATED CARRIERS OF THE UK AND HONG KONG. D) WE HAVE GOT INTO THIS TANGLE BECAUSE OF THE COMBINATION OF AIR

LICENSING PROCEDURES IN HONG KONG AND THE UK WITH VERY UNUSUAL AND PROBABLY UNIQUE CIRCUMSTANCES. IT THEREFORE SEEMS WHOLLY APPROPRIATE THAT MR NOTT SHOULD USE HIS POWERS OF DIRECTION TO GET US OUT OF IT. MUCH THE BEST SOLUTION WOULD APPEAR TO BE THAT THE ROUTE BE SHARED BY DAILY SERVICES OF BOTH BA AND CPA AS SOON AS POSSIBLE. IF FOR SOME REASON THIS DIRECTION IS OBJECTIONABLE, THE HIGHLY UNDESIRABLE REPERCUSSIONS OF THE CAA DECISION WOULD BE MUCH REDUCED IF IT WERE DIRECTED THAT THE ROUTE BE SHARED BETWEEN BA, BCAL AND CPA, THE LATTER TWO BETWEEN THEM PROVIDING A DAILY SERVICE IN COMPETITION TO BA. HONG KONG OBJECTIONS TO SUCH AN ARRANGEMENT COULD NOT BE SUSTAINED SINCE THIS WAS THE RATHER SURPRISING DECISION OF THE HONG KONG AIR TRANSPORT LICENSING AUTHORITY ITSELF. NEVERTHELESS THE BEST SOLUTION WOULD BE A STRAIGHT SPLIT BETWEEN BA AND CPA.

MACLEHOSE

FILES

HK & GD

MAED

MR MURRAY

MISS BROWN

MR GARDNER

COPIES TO:

KEGAL ADVISER

HONG HONG GOVT OFFICE

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CONFIDENTIAL