HC Deb 16 February 1981 vol 999 cc6-7
6. Mr. Allan Stewart

asked the Secretary of State for Trade what assessment he has made of the effect of the Government's decision to permit the new air transport services on the London-Hong Kong route.

Mr. Biffen

The travelling public have the benefit of a wider varity of services offered by three airlines and of significantly reduced fares as a consequence of the competition. In the first five months of these services, the number of passengers on the route increased by over 50 per cent. compared with the corresponding period in 1979.

Mr. Stewart

I am grateful for that information. Does it not prove that the customer has benefited greatly from competition on the route? Would not it be an additional benefit if that competition were created on internal, European routes?

Mr. Biffen

I am grateful to my hon. Friend for the support he expressed in the first part of his observation. I shall take note of what he says.

Mr. Carter-Jones

If three airlines provide good competition, why not have four, five, six, seven or eight?

Mr. Biffen

Laker Airways have been given a licence by the Civil Aviation Authority, but they are frustrated by not being able to get a corresponding licence in Hong Kong.

Mr. McCrindle

In order to keep a balanced view, will the Secretary of State say whether British Airways, British Caledonian and Cathay Pacific made a profit in the first six months of the open skies policy to Hong Kong? Does the 50 per cent. increase in passengers extend to first class and full economy fare passengers, without a full load of whom no airline can continue to fly at a profit?

Mr. Biffin

I am grateful to my hon. Friend for suggesting that one should take a balanced view. None of the three airlines operating in intensive competitive conditions has given any indication that it wishes to withdraw from the business.

Mr. Clinton Davis

Does the Secretary of State agree that originally the independents which sought licences to operate on this route did not seek stop-over rights and that that situation has changed? Will he venture an opinion about why that is so? Does he agree that the only organisation that will suffer as a result is British Airways because they will be required to give something up, whereas the others cannot be expected to do so?

Mr. Biffen

The hon. Gentleman will appreciate that the stop-over arrangements sought by British Caledonian are subject to an appeal by myself and I cannot make a comment until the appeal has been resolved.

Mr. Emery

Will my right hon. Friend remember that in the success of increasing the number of passengers to Hong Kong some persons are using the cheaper fares for onward transportation to Australia? Will he bear that in mind when applications are made for increased services to Australia?