HC Deb 29 March 1982 vol 21 cc4-5
6. Mr. Newens

asked the Secretary of State for Trade if he will make a statement about the allocation of route licences formerly held by Laker Airways

Mr. Sproat

The allocation of route licences is, in the first instance, for the Civil Aviation Authority to determine in accordance with its statutory duties. The authority will hold hearings to consider applications to take over the Laker route licences as soon as practicable. The Laker licences have not yet been formally revoked.

My right hon. Friend has directed the CAA to grant British Caledonian Airways a temporary exemption from licensing arrangements to enable it to operate a service between Gatwick and Los Angeles in place of that operated by Laker.

Mr. Newens

Is it not clear that in the past the method of allocating routes led to an oversupply of seats at minimum economic cost, with the result that, although passengers gained in the short run through cheap fares, in the long run there have been deficits, bankruptcies, redundancies and passengers losing all their fare money? Is there not a strong case for reviewing the allocation of routes and at least making it clear that no operation in which Mr. Freddie Laker has a part will be allocated any of the routes in future?

Mr. Sproat

The answer to the question about Sir Freddie Laker is "No". On the hon. Gentleman's suggestion that we look again at allocating the routes, the answer is also "No". My officials are this very week discussing with the American authorities the overcapacity of seats on the North Atlantic route.

Mr. Anthony Grant

Will my hon. Friend congratulate the Secretary of State on his sensible decision to grant the Los Angeles route to British Caledonian Airways? Will he remind everyone that British Caledonian is just as much an example of private enterprise as Laker Airways?

Mr. Sproat

I am grateful to my hon. Friend for making those two points. I reinforce what he says by pointing out that the private sector, as opposed to the public sector, last year made a profit. I thank him for his kind remarks about my right hon. Friend, who deserves them.

Mr. Woolmer

Will the Minister confirm the recent story in the Financial Times that the Government believe that the main cause of uneconomic operations over the North Atlantic is an excess of available seats? Are the Government pressing for a gateway moratorium over the North Atlantic? Has that not been a problem not only for Laker Airways but for all British airlines?

Mr. Sproat

It is true that in a time of world recession there is a problem of overcapacity. My answer to the hon. Gentleman's specific question about gateway moratoria is "Yes".

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