HC Deb 17 June 1980 vol 986 cc1358-73
The Secretary of State for Trade (Mr. John Nott)

With permission, Mr. Speaker, in view of the widespread interest in the matter, I should like to make a statement about the decision that I have taken concerning air services between London and Hong King.

Last year three airlines, British Caledonian, Laker and Cathay Pacific, a Hong Kong-based airline, applied to the Hong Kong Air Transport Licensing Authority and the Civil Aviation Authority for licences to operate on the London-Hong Kong route in addition to British Airways. At present, British Airways provides the only direct service, although there are, of course, already a large number of services between Hong Kong and other European cities.

Both authorities heard evidence separately on these applications. In December the Hong Kong authority licensed Britsh Caledonian and Cathay Pacific, but restricted their frequency of service to four and three flights a week respectively. In March this year, the Civil Aviation Authority announced its decision to license only British Caledonian.

The two applicants who were unsuccessful before the Civil Aviation Authority submitted appeals to me under the provisions of regulation 16 of the Civil Aviation Authority Regulations 1972. I also received a number of representations, including one from the Government of Hong Kong, that under the powers conferred on me by section 4(3) of the Civil Aviation Act 1971, I should direct the authority to license Cathay Pacific in the interests of the United Kingdom's relations with Hong Kong.

I gave this matter the most careful consideration, in particular against the criteria set out in section 3 of the Act, and I found myself in disagreement with the Civil Aviation Authority in a number of ways. In particular, I was convinced by Sir Freddie Laker's contention that there is a large untapped market for this route if fares are pitched at the right level. In his evidence he described this market as consisting of the forgotten men and women at the bottom end of the market who might wish to fly if they could afford to do so. I find myself in agreement with this dynamic approach to civil aviation, and in my view it should be acknowledged.

I also felt that the authority had placed too much emphasis on the economics of the proposed additional services in the short term, and too little on the benefits to the development of the United Kingdom civil aviation industry generally of choice of service and competition on a route such as this—in particular, competition with other non-British airlines.

I felt that it was in the interests of airline passengers that they should be offered a wider choice of service than exists at present, that it would be unreasonable to expect British airlines, within the meaning of section 3(1) of the Act, to be granted exclusive rights when Cathay Pacific is based in Hong Kong and commands much local loyalty, and can expect to draw traffic from its network of regional services.

I concluded therefore that the substantial new traffic likely to be generated over a period by a wider variety of services would offer a reasonable prospect that four operators could, over a period, achieve an economic return on this route.

I have accordingly upheld the Civil Aviation Authority's decision to license British Caledonian but, in addition, have directed it to reverse its decisions on the other two applications and to issue licences in the same terms to Cathay Pacific and Laker, but without prejudice to the former's existing rights between Hong Kong and Bahrain. The authority and the other parties to the appeals are being informed of my decision today.

As I have reached this decision by the normal appeal criteria, I do not intend to issue a political direction under section 4—and I have informed the Hong Kong Government accordingly.

I believe that my decision will be welcomed by airline passengers generally, and in Hong Kong, where freedom to compete is one of the cornerstones on which the economic success of Hong Kong has been built. I hope, therefore, that the Government of Hong Kong will lend support to the applications which Laker may now wish to renew to the Hong Kong Air Transport Licensing Authority and to any applications which British Caledonian and Cathay Pacific may wish to make to increase the frequency of their services, should they believe it is in their interests to do so.

Mr. John Smith

I am sure that the Secretary of State will be aware that in this extraordinary and surprising decision he has effectively overturned a CAA licence decision. Does he recollect that in recommending the Civil Aviation Bill to the House recently he argues that a Secretary of State should play less of a role in licence applications and that he should give greater scope and authority to the CAA? In this early decision on a licence application, is he not totally confounding the policy that he says underlines the Bill?

Is he aware that in the evidence that was given at great length to the CAA at the licence hearing nearly everyone except Laker argued that the market was limited in scope and demand? The CAA was clear in its decision that this was not a North Atlantic situation. It said in crystal clear terms that on the evidence that was given it believed that too many carriers would destroy the route and would not provide a proper service to the public.

Does the right hoh. Gentleman realise that if he takes a different view from the body that was established to judge these matters on the same evidence he undermines any confidence in its future decisions? Has he accepted evidence from any other body that was riot before the CAA when the licence decision was taken? Has he received any further evidence from Hong Kong or from any of the other interested parties?

The right hon. Gentleman has effectively countermanded the CAA's decision, and in the forthcoming Bill he is depriving himself of powers to decide a general policy for the authority to follow. There will be total confusion about British civil aviation licensing policy, on which the Government's view is to be deduced from random decisions made by the Secretary of State rather than by parliamentary approval, as in the past. In this circumstance, has not the right hon. Gentleman totally undermined the process of civil aviation licensing in Britain?

If the right hon. Gentleman feels that there were some other matters that the CAA should have taken into account but which it did not, surely the proper course would have been to refer those matters back to the CAA for further consideration, which would be fair to all those whose interests are involved.

Mr. Nott

It is true that in this case, having studied the same evidence as the CAA, I came to a different conclusion. That is the purpose of the appeal procedure. The change that I am making in the new Bill is a major one in the sense that I am removing ministerial guidance and placing within the Bill the criteria on which the CAA will operate in future. I am keeping an appeal procedure. In that respect the position will remain exactly the same. There was nothing extraordinary or new about using the appeal procedure.

I did not take into account the North Atlantic route in arriving at my decision. I arrived at it purely on the evidence submitted to the CAA and on the basis of the evidence submitted by the parties on the various submissions. I took no evidence into account other than that contained in the appeal procedure and in the original submissions.

There is no confusion about the policy. Section 3 of the 1971 Act is continuing in the new Bill in more or less the same form. It provides a series of objective criteria to avoid arbitrary political decisions. I have not made an arbitrary political decision. My decision was taken entirely in accordance with existing appeal arrangements. I have exercised my judgment in an entirely proper way.

Mr. Smith

The right hon. Gentleman referred to arbitrary political decisions. If a Secretary of State comes to a totally contrary decision from the Civil Aviation Authority, and without taking any further evidence or bringing to bear any further consideration overrules the authority, is that not an arbitrary political decision? If it is not, what is?

Mr. Nott

There is no point in having an appeal procedure if it is not used. I found myself convinced by Laker's argument that there was a large untapped market for an air service that was safe, efficient and cheap. I favour a dynamic approach to civil aviation. I believe that the forgotten men and women at the bottom end of the market will fly on holiday to the Far East if fares are at the right level. It is in that belief and on that judgment that I have come to my decision.

Mr. Anthony Grant

Is my right hon. Friend aware that the CAA is not God Almighty, and that he is entitled to reverse its decision if it is in the national interest to do so? Is he further aware that any stimulus to competition on this important route will be welcomed by the air traveller, especially by the business air traveller? Is he satisfied that this will not lead to such cut-throat competition as might cause bankruptcies or financial failures that would be gravely damaging to the travelling public?

Mr. Nott

I am making no judgment on the timing and frequency of the flights, which the four operators must decide for themselves. How often each airline decides to fly the route, or whether it decides to fly it, must be for its economic judgment. As long as unforeseen circumstances do not arise, I believe that all four carriers should be able to operate profitably on the route. In the end it will be the market that decides. The operators that have sought to fly the route must seek the additional traffic, find it and tailor their operations to the market as it develops. That is what business is all about.

Mr. Donald Stewart

Is the Secretary of State aware that his decision will mean that no longer will the CAA be regarded as the arbitrator of licensing and that it will be regarded as a stage in applications until the appeal goes to the Minister? That is the inevitable effect of the decision that he has taken.

Is the right hon. Gentleman further aware that his decision will cause great alarm in Scotland, as the British Caledonian operation was tied up with the installation of the aero-engineering works at Prestwick, which will not now be a viable proposition?

Mr. Nott

I do not believe that the right hon. Gentleman's latter statement is correct. I have read a statement made by Mr. Kelvin Kellaway, the managing director of the plant in Scotland to which the right hon. Gentleman referred. I believe it to be an accurate report. On Friday he was alleged to have dismissed the fear that the right hon. Gentleman has enunciated. He said that the plant had been planned before British Caledonian was awarded the Honk Kong licence. The possible loss of work—about 6 per cent. of the total expected business—was easily within the business fluctuations forecast. That is what he is reported to have said. I have no reason to believe that that is an inaccurate report of his views.

Mr. Hordern

My right hon. Friend will know that I am in favour of free competition and the free market. However, does he consider that the system is adequate that allows the Civil Aviation Authority to grant a licence, upon which substantial investment subsequently takes place, which decision can then be revoked by ministerial judgment? Is there any useful purpose, in those circumstances, in allowing the process of the CAA to grant a licence?

Mr. Nott

It is desirable to have a licensing procedure because it enables all the facts to be considered by an independent body. That is what happened in this instance. To end the licensing procedure and to make every decision subject to ministerial decision, without the objective criteria that are legally based in the Act, would lead to one political decision after another.

I favour a continuation of the objective legal criteria that are contained in the 1971 Act, and that we are continuing in the new Bill, so that politics are, as far as possible, removed from the process.

In deciding the appeal I have made a judgment that is based purely on the evidence presented to the CAA. We could get rid of the appeal procedure, but I do not think that that would be sensible, as ultimately aviation policy must be subject to a judgment by the Government of the day on the basis of the criteria that are set out in the Act.

Mr. Sheerman

Is the right hon. Gentleman aware that many of my constituents may feel that it is fantasy to believe that competition will see those at the bottom end of the market flying to the Far East for their holidays? Bearing in mind the present levels of unemployment, they will be lucky to go to Scarborough.

Has the right hon. Gentleman considered the nature of a policy that allows a Minister to interfere with the decisions of the CAA? I remind him that his hon. Friend the Under-Secretary of State for Trade repeatedly assured us in Committee, when we were discussing the Civil Aviation Bill, that it was important for the CAA to have a more independent role so that the Government would not interfere continually with route licensing, and that the CAA was to be trusted to be an independent arbiter. Many people in the industry will be appalled at this decision, especially in the light of the Government's stated intentions. I refer the right hon. Gentleman to those many pages where this attitude was spelt out.

Is the Secretary of State satisfied that this will produce a safe, efficient and cheap airline industry? Many of us in this House are worried about the safety aspects of competition. Sometimes corners are cut and people are put at risk.

Mr. Nott

All the safety aspects are laid out in the Act, and clearly they are of overriding importance. The Secretary of State, in deciding the appeal, and the CAA, in considering applications, have to act in accordance with the 1971 Act.

On the question of the ability of the hon. Gentleman's constituents to travel to the Far East, may I tell him that Hong Kong is just over 6,000 miles from here and Edinburgh—which is within distance of the constituency of the right hon. Member for Lanarkshire, North (Mr. Smith)—is nearly 400 miles away. At present a sleeper journey from London to Edinburgh costs almost £50. In the submissions to the CAA, most of the applicants were suggesting a single one-way tare to Hong Kong, at the lower end of the scale, of between £100 and £150. The present lowest return APEX fare is £400. The hon Gentleman is saying that his constituents will not be able to afford the fare. On the basis of the evidence submitted, it is not much over double what it now costs to go on the sleeper journey to Edinburgh. I believe it costs more than £100 for his constituents to go on their holidays in Spain.

Mr. McCrindle

Would the Secretary of State accept from one who is a believer in competition in aviation that there are several reasons to question whether the maximum potential foreseeable traffic on the London-Hong Kong route can conceivably justify four airlines flying it? In coming to his decision, did he have occasion to look across the Atlantic to see the results of the deregulation policy introduced a few years ago in the United States and note the plunge in profitability of some of the airlines there, as a result of which many of them are on the verge of bankruptcy? Would he not agree that if that were to be the result of his decision it could not conceivably be in the long-term interests of the business or domestic traveller?

Mr. Nott

Clearly if that were the result, it would not be to the advantage of their airline operators or the passengers. I think that is an indisputable fact.

May I remind my hon. Friend that similar gloomy predictions about competition in world aviation were made before the arrival of Skytrain on the North Atlantic? In the year following the arrival of Skytrain on the North Atlantic, which was in 1978, British Airways passenger revenues on the route exceeded all previous records. Pan Am and TWA had an equally good year.

May I remind my hon. Friend of what happened on the North Atlantic? I accept that at present the airlines are not going through a profitable phase. That, overwhelmingly, in the current period is because of massive increases in aviation fuel costs. In 1979 airline passenger growth rose by 9 per cent. over 1978. The current problems of the airlines are the problems of rising aviation fuel costs and other costs. I do not think that we can decide a medium-term and long-term aviation policy on the basis of short-term criteria. If we are frightened for the future, we shall never have the right aviation policy.

Mr. Gregor MacKenzie

Is the Secretary of State aware that by effectively countermanding the decision taken by the CAA he has succeeded in pleasing no one because the three airlines concerned could not operate viably on this route? I am ignoring the Secretary of State's geographical error when he talked of taking a sleeper train to Edinburgh. It is a pity he did not take a sleeper train to Glasgow to consider the effect on the employment prospects of the people who work for British Caledonian in the Strathclyde area, which already suffers from exceptionally high unemployment. We hoped that that was a factor he would take into consideration. We all regret that he seems to have ignored it completely.

Mr. Nott

I did not think that the appeal which I was deciding was, by its very nature, one in which I would please everyone. I certainly accept that this decision on appeal will not please all the airline operators, but I believe it will greatly please future airline passengers.

My duty under the Act is to weigh the interests of the airline passenger with those of the airline operator. On the evidence submitted on the appeal—aviation fuel costs have of course risen since then—we are talking about extremely attractive fares at the lower end of the scale.

I am not instructing the airlines how many flights to fly ; I am not telling them what frequency they should have. British Airways now have seven flights a week to Hong Kong. I am not saying how many flights British Caledonian or Laker or Cathay Pacific should fly. That is up to them. They must make their own economic choices. I believe that this route will throw up a large untapped market of future air travellers. That is why it is important. It is the only cabotage route, the only international route, on which we have control and are able to make a decision. I believe that there are great prospects on this route over the long term. I think that the CAA took too short term a view in this case.

Mr. Trotter

Does my right hon. Friend see extra traffic developing here from the whole of the Far East area which could be to the interests of all the operators on this cabotage route? Is the practical consequence of his decision that both British Caledonian and Cathay Pacific can operate immediately, whereas Laker, in practical terms, must obtain the approval of the Hong Kong Government?

Are there any implications here for the future? Is there any possibility of its leading perhaps to more competition on routes nearer home on which the fares are even more outrageous than those on the sleeper route to Glasgow?

Mr. Nott

I think I had better leave other routes alone for the present. Sixth freedom carriers are fairly numerous on this route—Swissair, Lufthansa, Air France, KLM, Singapore Airlines, Malaysian Airlines, Thai International and Air India.

I believe that there is scope—I cannot say how great it is—in attracting business to British airlines on the Hong Kong-London route. I want British airlines to compete as effectively as possible with other foreign airlines. That is the whole basis upon which I am instructed under the Act to pursue the policy.

I cannot tell how much diversion there will be, but I believe that there should be a considerable amount as a result of this decision.

Mr. David Steel

Has not the Secretary of State admitted in both his statements and his replies to questions that he has, in effect, overruled the CAA by bringing his political view of the development of aviation to bear on exactly the same evidence? If so, is he not directly intervening ministerially in the decisions of a statutory body and therefore virtually setting aside its role? What is its role to be in future licensing?

Mr. Nott

I have not taken a political view in any way. I deny that suggestion completely. I have looked at the evidence which was presented to the CAA on the applications. I have looked at the appeal papers and I have made a judgment about this route, based on the evidence that was given to the CAA. It was not a political decision. In this case, under the 1971 Act, I acted in an appeal capacity, in a quasi-judicial capacity, and it was solely in that capacity that I took this decision.

Several Hon. Members rose——

Mr. Speaker

I propose to call four more hon. Members on either side, which I think will give a good run.

Mr. Tapsell

Is my right hon. Friend aware that, whether or not events prove that there is room for three new airlines on this route, there will be much satisfaction at his decision to overrule the CAA and that if he had sustained his decision to exclude Cathay Pacific from the route there would have been deep resentment in Hong Kong—one of our best potential export markets—where there has been a feeling of resentment over many years that air traffic rights in Hong Kong have been used by Britain to the disadvantage of Hong Kong as a form of what I have heard described as "old-fashioned colonialist exploitation"? Should not that last point weigh with the Opposition?

Mr. Knott

I am grateful to my hon. Friend for making that point. Of course, I was asked by the Government of Hong Kong, given that that was their view, to make a political direction under section 4 of the Act. I rejected that application in favour of a decision under section 3 of the Act, because there is a large market here which all four airlines, over a period, can make economic if they go out and really sell their business to the general public at what will be a wider choice of fares and at lower fares. What my hon. Friend said about the feelings in Hong Kong is true.

Mr. Harry Ewing

Is the Secretary of State aware that his decision appears to be based on no more than the report that Freddie Laker said that there were more passengers available?

Is the Secretary of State aware that the Scottish Council (Development and Industry), as well as British Celadonian Airways, says that the right hon. Gentleman's decision will cost a substantial number of jobs in the Prestwick area? The Secretary of State for Scotland claimed that his personal intervention on another aircaft matter caused the creation of jobs. In this instance, is it the case that the Secretary of State either did not intervene, or intervened and was merely brushed aside by the Secretary of State for Trade?

Mr. Nott

I note the hon. Gentleman's view that this decision will cost a number of jobs. However, British Caledonian is not operating this route at present. It is due to start operating the route in August. If the hon. Gentleman is talking about future jobs, that is a judgment for British Caledonian to make. I believe that British Caledonian is likely to fly this route. The frequency and the timing with which it does so is entirely a matter for it, based upon its own economic judgment of how it can make this route pay.

Mr. Onslow

Will my right hon. Friend underline the fact that he has not withdrawn any licence from British Caledonian in the way which has sometimes been suggested and that there would be general disappointment among British Caledonian's many friends in this House if its management took the view that it could not compete in this situation which my right hon. Friend has created?

Before the Civil Aviation Bill comes back to the House, will my right hon. Friend take another look at the draft guidelines which have been linked with the Bill? If he finds that they do not reflect the same dynamic approach which his decision today indicates, will he change them so that they do reflect it?

Mr. Nott

I thank my hon. Friend for his remarks. As he says, no one is withdrawing a licence already granted to British Caledonian. It was granted a licence by the CAA and I am upholding that decision. [HON. MEMBERS : "Oh ".] That is surely correct. The right hon. Member for Lanarkshire, North, (Mr. Smith) is entitled to be a protagonist for one airline. I understand that. If he had read the evidence, he would know that there were protagonists for all the airlines.

Unless I am mistaken, the existing draft guidelines relate to the 1971 Act. The CAA has not yet issued any guidelines in connection with the Bill which will come before the House and which will change the basis of the policy. Certainly I shall be looking with great interest at any guidelines which the CAA may decide to issue in relation to the Bill when it becomes an Act.

Mr. Ogden

As the Government were elected to provide competition, those outside the House who put the Government in office should not complain if he does so. Will he deal with a practical point? He knows from experience that Hong Kong has only one international airport; we have several. Will he use his influence to persuade the operators, especially the tour or leisure operators, that the United Kingdom end of the route does not have to be only Gatwick or Heathrow ; it should also be the Midlands, the North-East or Scotland. That is where the key to the leisure traffic lies.

Mr. Nott

I very much agree with what the hon. Gentleman said. Of course, we want the airline operators to use the widest number of regional airports in attracting the kind of traffic which I believe is available for the Hong Kong route. The question whether the traffic should go from regional points to Hong Kong, or from regional points via London to Hong Kong, is important. I agree with the hon. Gentleman's general point that there is a broad market in the United Kingdom. Of course, I should like to see the tour operators attracting people from all round the United Kingdom with what will be lower fares and a greater choice of service.

Mr. Speaker

Mr. Kenneth Warren.

Mr. Warren

It is so nice to have the name correct, Mr. Speaker. Does my right hon. Friend appreciate that I thoroughly applaud his decision and trust it will mean that he will have the same progressive attitude towards forthcoming decisions on cheaper air fares to Europe? May I press him further? Bearing in mind that he does not want to use the section for political direction, which he rejected, will he say precisely what negotiations he had with the Hong Kong Government to make sure that Laker is allowed to operate out of Hong Kong?

Mr. Nott

I have not had any negotiations with the Hong Kong Government. The Hong Kong licensing authority operates independently of the Hong Kong Government. I merely said in my statement that if Sir Freddie Laker decided that he wished to reapply to the Hong Kong licensing authority. I should hope that the Hong Kong Government would support that application—I cannot say more than that—and that they would grant it. It is up to Sir Freddie Laker to decide whether he wishes to reapply. Naturally I hope that he will, but the decision is for him.

Mr. Foulkes

Surely the Secretary of State appreciates that if British Caledonian take two DC 10s out of service it will pose an immediate threat to the future of Caledonian Airmotive, and the forgotten men and women at the bottom of the pile will not get jobs. They could not fly even to Luton, let alone Hong Kong. Does the right hon. Gentleman accept that the Secretary of State for Scotland has once again been overruled and slapped in the face on this issue? Will he perhaps advise the Duke of Edinburgh, who is officially to open this plant on 3 July, what he can say about the future of jobs at Caledonian Airmotive?

Mr. Nott

I do not share the hon. Gentleman's view of British Caledonian. I think that it is an excellent airline. It can and will compete on this route. I do not understand why so many members of the Opposition feel that British Caledonian is uncompetitive. I am not instructing British Caledonian about how often it should fly. I am merely upholding the CAA's decision that it should be allowed to fly. That is perfectly correct.

I read in the newspapers that British Caledonian has purchased two DC10 aircraft for this route. If it did so before a decision was taken on the route, that cannot be my responsibility. I believe that British Caledonian will want to fly this route and that it will fly it successfully. There is a very large untapped market here. In due course, the four airlines will be profitable on this route.

Mr. Geoffrey Johnson Smith

On the question of the purchase by British Caledonian of two DC10s, will my right hon. Friend confirm that as far as he knows that was done without a nod and a wink from his own Ministry and on the initiative of British Caledonian, not in expectation of getting the route which was awarded to it by the CAA on the basis that there would be two carriers? Will he take it that Government supporters fully understand the philosophy that guided his decision and are friends not only of competition but of British Caledonian with respect to the part that it has played in private aviation in this country? Will not my right hon. Friend need to say rather more than he has to- day about the reasons that led him to believe that the route to Hong Kong can support four airlines as opposed to two? Does it not take considerable investment for an airline to support any number of flights, be it one a week or two a week?

Mr. Nott

I think that my hon. Friend will find the evidence submitted to the Civil Aviation Authority of great interest. Laker Airways and British Caledonian operate from Gatwick. I believe that there is a large, untapped market. Many men and women at the bottom end of the market will fly here if they are given the opportunity to do so. I do not share the pessimism or belief that the world airline market is static. I believe that it is dynamic. British airlines must go out and capture the market in competition with other airlines. I do not share the negative attitude to airline competition. Having read the evidence, I believe that I am justified in taking that view.

Mr. Dalyell

The Secretary of State taunted my right hon. Friend the Member for Lanarkshire, North (Mr. Smith) and other hon. Members when they argued in favour of British Caledonian. However, is it not equally true that he has been the protagonist of Laker Airways? The Civil Aviation Authority said in black and white that it believed that Laker Airways had failed to make a convincing case for a licence. In those circumstances, what is the purpose of having the CAA?

Mr. Nott

In return, may I ask the hon. Gentleman what the purpose of an appeal procedure is if it is not used in such a case as this?

Mr. Maxwell-Hyslop

If my right hon. Friend's decisions are consistent rather than capricious, will he apply the same principles as he has enunciated today to another greatly abused cabotage route on which excessive fares are charged for a poor service? I refer to the route between the United Kingdom and Gibraltar.

Mr. Nott

If airline operators submit fresh applications for that route, the CAA will examine them under the existing licensing system. Those who object to its decision are free to appeal to me. I shall make a decision on the facts contained in those applications. If my hon. Friend knows of any operator that is interested in that route, I hope that he will encourage it to apply.

Mr. Clinton Davis

Is the right hon. Gentleman aware that the appeals procedure exists for him to review the evidence in a quasi-judicial capacity and not—as has been the case—in a political capacity? What evidence is there, in contrast to the findings of the CAA, to show that there is a vast, untapped market? Will he draw our attention to the specific evidence that he has relied on?

Has not the right hon. Gentleman totally undermined the authority of the CAA? Not only is the finding on the evidence in complete conflict with the findings of the CAA; the right hon. Gentleman has undermined any previous definition of policy. Will he bear in mind that the CAA and the Hong Kong authorities conclusively found that that route would not bear four carriers? Indeed, they concluded that only two carriers should be maintained. Why did he not remit the issue to the CAA so that it could consider the evidence about which he had expressed anxiety and thus ensure that justice was done?

Mr. Nott

I founded my decision on appeal on the evidence that was presented to the CAA and on the appeals that were submitted to me. On appeal, I am entitled to take a different view from the CAA about the evidence. I did so. As the hon. Gentleman would have wished, the process was handled as a quasi-legal procedure.

As the hon. Gentleman made a political charge, I shall conclude with a political point. If the attitude characterised by the hon. Gentleman's remarks were to prevail, it would be almost as expensive to travel from Westminster to Hackney Marshes as it is to travel from Westminster to Hong Kong. I believe in a dynamic market. The route provides great opportunities. Over a period, the four operators will take advantage of those opportunities. That will be of great benefit to airline passengers, because it will mean lower fares and a wider choice.