TNAG-0964-FCO40-1183-Air-services-between-the-UK-and-Hong-Kong-1980 — Page 185

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CONFIDENTIAL

35)

CONFIDENTIAL

FM HONG KONG 010950Z APR 80

TO IMMEDIATE FCC

TELEGRAM NUMBER 476 OF 1 APRIL

HKK18416

RECALL) BAECKERY NO. 51 - 2 APR 1980

INFO IMMEDIATE HONG KONG GOVT OFFICE LONDON DE OFFICER

INDLX

PA

YOUR TELNO 277 AND PARAGRAPH 1(D) OF OUR TEL NO 461. Ju

AIR SERVICES : CAA DECISION.

IN OUR OPINION THERE ARE VALID GROUNDS IN CIVIL AVIATION TERMS

FOR THE CAA DECISION TOBE CHANGED IN CPA'S FAVOUR. OTHER THAN IN

THE SHORT TERM PERHAPS, 7475 WILL BE MORE APPROPRIATE THAN THE DC10S. IN THE SHORT TERM, CPA CAN USE THEIR INTERMEDIATE TRAFFIC RIGHTS TO FILL THEIR 747S, AND BECAUSE OF THE PEAKS AND TROUGHS IN THE NUMBERS OF PASSENGERS DURING THE WEEK, AT WEEKENDS IN PARTICULAR THE 747 WILL EVEN NOW BE MORE APPROPRIATE ANYWAY.

2. THESE AND OTHER CIVIL AVIATION POINTS WE SHALL COVER IN OUR COMMENT ON THE APPEAL (PARA 1(B) OF OUR TELNO 461). WE SUGGEST THAT LORD CARRINGTON'S LETTER TO MR NOTT SHOULD SUPPORT HKG

ON SOME OF THE FOLLOWING POLITICAL POINTS WHICH WILL BE INCLUDED 36

AMONG THOSE IN OUR FORMAL SUBMISSION TO THE S OF $ FOR TRADE (PARA 1(C) OF OUR TELNO 461)

WITH

(A) THE APPLICATIONS FOR A UK/HK LICENCE CANNOT BE VIEWED IN THE

SAME WWAAYY AS UK DOMESTIC LICENCE APPLICATIONS OR COMPARED

CABOTAGE APPLICATIONS TO, SAY, BERMUDA. HK IS UNIQUE AMONG

DEPENDENT TERRITORIES IN HAVING A MAJOR AIRLINE OF ITS OWN AND

AN ECONOMY SUFFICIENTLY DEVELOPED TO GENERATE A SUBSTANTIAL

PROPORTION OF THE TRAFFIC ON ITS ROUTES:

(B) UNQUESTIONABLY BUT FOR HK'S DEPENDENT TERRITORY STATUS AND IN TERMS OF NORMAL INTER-GOVERNMENTAL AIR SERVICES ARRANGEMENTS,

CPA WOULD LONG AGO HAVE BEEN DESIGNATEE AS HK'S CARRIER ON THE HK-LONDON ROUTTEE. THERE WOULD NOT HAVE BEEN A MONOPOLY NOR ANY POSSIBILITY OF A DUOPOLY OF UK-BASED AIRLINES ON THE ROUTE. THERE WOULD BE A BALANCE OR NEAR-BALANCE, ACTUALLY OR POTENTIALLY, BETWEEN THE EARNINGS OF CARRIERS BASED ON EACH END OFF THEE ROUTE. WHILE THE CAA WAS NOT REQUIRED TO HAVE REGARD TO THIS CONSIDERATION, THE QUESTION OF FAIR AND EQUAL OPPORTUNITY FOR AIRLINES AT BOTH ENDS OF THE ROUTE CANNOT, IN ALL EQUITY,

BE IGNORED.

(C) CPA AND GOVERNMENT OFFICIALS IN HK ARE AWARE THAT, OVER A LENGTHY PERIOD OF TIME WHEN THEIR APPLICATION SHOULD HAVE STOOD A GOOD CHANCE OF SUCCESS IN THE ABSENCE OF INTEREST FROM BCAL AND LAKER, CPA WERE DISSUADED BY DOT FROM APPLYING TO CAA TO SERVE THE HK-LONDON ROUTE. CPA WERE LEFT WITH THE FIRM IMPRESSION THAT THE DOT WOULD INDICATE WHAT THE RIGHT TIME WOULD BE FOR THEM

TO PUT IN THEIR APPLICATION:

(D) IT WAS DOT WHO IN THE FIRST TWO MONTHS OF 1974 APPLIED CONSIDERABLE PRESSURE TO CPA TO DISSUADE THEM FROM BUYING DC1øs,

CONFIDENTIAL

/NOW