2
• 12 1
CONFIDENTIAL
4.
This decision caused deep resentment in Hong Kong, where CPA is regarded very much as the local airline, and the licensing of BCal has been alleged by critics to represent a colonialist approach. Laker regarded the CAA ruling as an example of the continuing anti-competitive approach to civil aviation, in which charge he is anxious to join the present Conservative Government. Both airlines appealed to me against the CAA decision, and in addition the Hong Kong Government requested me to use my powers of direction to the CAA to give a licence to CPA for political reasons based on wider Hong Kong/UK relations.
5. Public and Parliamentary opinion is obviously divided, but in political terms the prevention of competition and the thwarting of Laker's attempts to introduce cheaper travel to a wider travelling public is incompatible with our general stance. Furthermore it could be damaging to our trade and political relations with Hong Kong if we do not allow CPA onto the route.
6. Having considered all the evidence I have been convinced by Laker's views of the potential development of traffic on the route which are very much more optimistic than those of the other carriers. Laker argued that there is a vast untapped market at the bottom end of the price range (in his words "the forgotten men and women at the bottom end of the market") who will fly the route if fares are pitched at the right level. I am sure that this dynamic approach to civil aviation is right and should be acknowledged. I have therefore decided to direct the CAA to
licence CPA and Laker in addition to BA and BCal.
No comments yet.
Private notes are available after approval.