TNAG-0965-FCO40-1184-Air-services-between-the-UK-and-Hong-Kong-1980 — Page 34

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D. The Basis for Reconsideration

16.

The Hong Kong Government supported all

applications and said that the Authority could, within the limits imposed by the Regulations, follow the decision

of the Secretary of State and grant all three applications.

The crux of the Attorney General's argument was that there

was a difference between the situation in November 1979

and what it is today. He pointed out that in its previous decision the Authority had provided some over-capacity to ensure year-round seat availability and to stimulate competition. It should not then shirk from providing more over-capacity if the market was shown to be much larger

than estimated. It was also pointed out that the

Authority in its 1979 decision had said that the Laker submission was in keeping with Hong Kong's general economic approach and he supported that view, as did the Secretary

of State.

17.

The Attorney General submitted that there is

much to be said for having the same decision from the respective licensing authorities at each end of the route. The question of 'uneconomic overlapping' is relevant in the United Kingdom under the Civil Aviation Act as it is

under our Regulations. In the UK Act the reference is

to 'an economic return to efficient operators on the sums invested in providing the services '. If the Authority felt it could do.so within the framework of the Regulations, the Attorney General said it should match the decision made in London. We accept

that argument though it does not seem to have been a

factor considered by the CAA in reaching its decision not

to license CPA.

18.

Laker's contention was that the Authority was

obliged to effectuate the Secretary of State's decision if it is legally able to do so consistent with its Regulations and the evidence. We would not quarrel with that if the words "was obliged" were replaced with "should endeavour" while bearing in mind the Authority's duty to have regard to the interest of the Hong Kong public and to existing carriers.