Beyond Lion Rock

by Gavin Young

  It was for Mr Bebchick to kick off. For a start, and for the benefit of the Authority, he rehearsed a number of facts, including notably that the present BA service was totally inadequate, with 53 per cent of its flights on this route arriving three hours late. He also stressed that BCal continued to support a ‘three carrier regime’, a sharing of the route among the three British companies. Cathay would be incapable of going it alone, he maintained. Their proposed three services a week were inadequate, and anyway their recently acquired Boeing 747’s very high break-even passenger load factor would make it uneconomical. As for Laker, Mr Bebchick dismissed him briefly and completely – his proposal for cheap mass flying was utterly unrealistic.

  Peter Bowsher reiterated Cathay’s suggestion in favour of two airlines, not three, with equality of opportunity from both ends of the route. Cathay already had one 747-200B and was expecting delivery of three others which would give them the capacity they needed. He pointed out that Cathay was naturally supported by the government and people of Hong Kong because, as a local carrier, it would be extremely responsive to the demands of that market. The ‘eastern-ness’ of Cathay – the image of it as ‘Hong Kong’s airline’ – was again expounded by Duncan Bluck when he took the stand. Cathay, he emphasized, had a long history of profitable operation in and out of the Colony; it had a large network of routes in the Far East and from these it could feed traffic into the London–Hong Kong service. As for the 747 being the right, or wrong, aircraft, Bluck said that for one thing customers preferred the 747 over the DC-10 and ‘We certainly don’t accept that a smaller aircraft [the DC-10] with 270 seats is better suited for a long haul route than a 747 with 408 seats. After all, it is long-term development of the route that is important.’ Bob Dewar, a skilled accountant and Cathay’s doughty Director of Airline Operations, and Richard Stirland, the Company’s bright young Planning Manager, developed these arguments in their turn. As for Laker, Stirland pooh-poohed the notion that hordes of Chinese with itchy feet were lurking in the bushes, waiting impatiently for cheap tickets to romantic places like London. Hong Kong passengers were mostly businessmen, government servants, officials: there was no mass market there for Laker-style Skytrains. As for holiday group tours to Hong Kong – Hong Kong was not Miami.

  Mr Bowsher weighed in again. Let it not be forgotten, he said, that Cathay had made a considerable and patriotic contribution to the British aerospace industry and would by 1982 be the only Rolls-Royce-powered airline of its size in the world. And of course the 747 was eminently suited to the route: its greater number of seats would also help relieve the expected overcrowding on the runway at Kai Tak Airport. But despite the projected extra demand for flights, he too dismissed the Laker application as unrealistic.

  Naturally, Sir Freddie was not going to be swept under the rug like that. He stoutly maintained that Hong Kong might indeed become another Miami. He would offer a daily service – a comfortable, one-stop service. He would develop low-cost tours from both ends of the route. He would cater, above all, for ‘the many, many forgotten men and women at the bottom end of the market’.

  The CAA hearings seemed set to last forever, frequently bogged down in tedious niggling over largely hypothetical figures. It was lucky for everybody present that their number included characters like the peekily abrasive Mr Bebchick and the ebullient Sir Freddie, both of whom demonstrated a public persona that, in another day and age, might have assured them a future in the music-halls. Laker’s confident predictions of a boom at the ‘bottom end of the market’ and his plans for cheap fares prompted Peter Bowsher to say that his rock-bottom fares would only appeal to those who didn’t mind what they sat on. He started to elaborate: ‘You could go on wooden seats’ – when an indignant interruption from Laker’s American counsel, Mr Beckman, silenced him. ‘This room,’ protested Mr Beckman, ‘is full of press writing down what Mr Bowsher is saying and the statement regarding wooden seats is untrue…. It is scandalous and very damaging to us.’ Presumably he feared the next day’s newspapers would come out with headlines like ‘Freddie Laker To Use Wooden Seats in Skytrain, QC alleges’. Mr Beckman was calmed by a word of support from Mr Colegate: ‘Let me say that I have sat in a seat in one of Laker’s DC-10s and it was quite comfortable.’ Not wood at all….

  At one point Sir Freddie sought to draw a conclusion from his estimate of future passengers and revenue, excusing the vagueness of it by saying, ‘Surely we are entitled even in these rather formal proceedings to have a little bit of latitude and do a bit of generalizing?’ Mr Philipson, for ΒA, suavely reassured him: ‘Generalizing, Sir Freddie, is something which I would never seek to persuade you away from.’ On another occasion, Sir Freddie exploded with, ‘If you pull all the feathers out of a bird it will not fly!’ But Sir Freddie came over as a good sport. It was he who closed the proceedings for the Christmas recess by booming ‘A very happy Christmas and a healthy 1980’ to one and all.

  BCal’s Mr Bebchick, adroit and very American, seems to have had a high old time of it. Even when flippantly referred to as ‘Mr Dabchick’ – an ornithological put-down which produced some laughter in court – he rose serenely above such mockery. At other times he engaged in exchanges reminiscent of those famous satires of courtroom proceedings chronicled by the late lamented J. B. Morton (‘Beachcomber’) in the old Daily Express of London – especially those proceedings that involved the imaginary Mr Justice Cocklecarrot and the fictional barrister, Prodnose.

  Thus:

  Philipson (sardonically from his great height, to the Chairman):

  ‘Mr Bebchick really does not understand the point of my cross-examination.’

  Bebchick: ‘I wish you would stop saying that I do not understand you. I am quite intelligent. I do not think that these snide references get you anywhere and it is rather unprofessional of counsel.’

  Chairman: ‘It could be a case of post hoc, ergo propter hoc.’

  (Prodnose: ‘Well, precisely, m’lud.’)

  Mr Beckman, the other American, fared no better than Philipson. He and Bebchick complemented each other physically: Bebchick short almost to vanishing point, Beckman thin, tall and dark.

  Bebchick: ‘I do not take Laker as serious. I am sure Sir Freddie takes himself very seriously.’

  Beckman: ‘…. Do you think this is a laughing matter?’

  Bebchick: ‘Yes, I consider your case to be a laughing matter…. I love Sir Freddie as a human being and he loves me, too, but when you approach a market like Hong Kong and put in a submission that says it’s going to be like Los Angeles, and Sir Freddie tells us with great conviction that he personally will ensure that the market grows from 200,000 to 475,000 in one year, then I think it is a joke. I think it is a farce. I do not take it seriously. I’m sure he does, and I know you do, Mr Beckman. But Freddie Laker can be wrong. We all make mistakes. He has made a bad mistake here and if I choose to say it is a joke, that is what I choose to say. I do not view it as a serious proposal. I just do not.’

  One up to Mr Bebchick.

  As time passed, the drama of the scene seemed to Richard Stirland to take possession of Messrs Bebchick and Beckman. Their gestures became sweepingly histrionic, the room filled with echoes reminiscent of Perry Mason exhorting invisible juries to dispatch wife-slayers to the hot seat. Bebchick strode up and down, dragging yards of wire behind him and declaiming into the sort of hand-held microphone favoured by nightclub entertainers. Sonorous phrases like ‘Let this court bear solemn witness’ and ‘May the record show….’ might have become the flamboyant rhetorical norm of these quite straightforward hearings had not Mr Colegate put a stop to it. When Mr Bebchick protested that Mr Beckman had produced an unexpected document with an unseemly lack of advance warning he got a brush-off which prompted the following exchange.

  Beckman (sadly): ‘Poor Mr Bebchick….’

  Bebchick: ‘I think the record should be clear….’

  Chairman: ‘Mr Bebchick and Mr Beckman, this hearing has not yet become a telev
ision serial, although it seems in imminent danger of becoming a serial without the television…. Let us just get on with things. Let us take a break for five minutes while we all cool down and then let us carry on.’

  When one evening Mr Bebchick said he would pop his ‘final question’ to a long-suffering witness, BA’s Philipson muttered, ‘I hope it will not be a leading one.’

  To this Bebchick remarked: ‘A leading question is one which requires the witness to answer yes or no. That is the American definition.’

  The weary Chairman groaned: ‘Perhaps we could do with more of those questions! Mr Bebchick, if I have understood the American way of life and terminology correctly, we are eighteen minutes into the “happy hour”.’

  *

  These rhetorical high jinks were the leavening in hearings that were at bottom very weighty. At the end of it all the CAA’s decision was awaited with bated breath and very few smiles. When it came, on 17 March 1980, ATLA’s decision was overturned. British Caledonian was the only one of the three airlines to be granted a licence to fly between Hong Kong and London.

  Laker was ruled out because the CAA doubted that Sir Freddie’s ‘forgotten men’ existed at all, at any rate in significant numbers. ‘As far as Hong Kong is concerned there is no significant charter market from which scheduled services can divert traffic.’ The CAA also doubted Laker’s ‘ebullient forecast’ of massive holiday traffic. Hong Kong was not Miami or Los Angeles. ‘The Authority must regretfully regard the “forgotten man” as a myth; there is certainly no evidence that he is waiting hopefully for the opportunity to travel between London and Hong Kong.’

  But why did the CAA choose BCal over Cathay?

  It is worth quoting the report’s relevant paragraph in full because the answer, in retrospect, is a very odd one indeed.

  Given its conclusion that the route will stand only one additional operator, the Authority is faced with the unenviable task of choosing between Cathay and BCal…. The conclusion is that Hong Kong and the public would best be served by granting the licence to BCal, whose aircraft size is better tailored to the needs of the route at its present stage of development. The Authority fully understands the desire of the Hong Kong Government for Cathay to be licensed. There would be some advantage in the route’s being developed by a carrier based at the Hong Kong end. Cathay is well placed to develop Asian traffic from its Far East network and it already has the advantage of rights between Hong Kong and Bahrain. However, the Authority does not consider that these advantages outweigh the disadvantage that Cathay could not satisfy the needs of the market as well with its 747s as BCal could with its DC-10s.

  The next paragraph surmised that political considerations influenced Hong Kong’s ATLA to grant Cathay a licence rather than ‘the harsh logic of the economic analysis’. It went even further than that, implicitly warning the Secretary of State for Trade that, should he overturn this decision of the CAA (it was in his power, and his alone, to do so), he would be saying in effect that ‘it was more important to give Cathay Pacific a place in the sun than to provide the service which is clearly better for the travelling public’. No wonder Duncan Bluck’s copy of the report at this point is splattered with angry exclamation marks and one ferociously scribbled word – ‘Rubbish!’

  The news of Cathay’s rejection fell like a stun-grenade among the Company’s directors and employees alike. Mike Hardy, the present Director of Flight Operations, was in Hong Kong waiting at a traffic light. His wife, in another car, was alongside. Their car radios were tuned to the news and the CAA decision was announced at that moment. They sat there dismayed and unbelieving, staring at each other through their car windows. The lights changed and they still sat there. ‘Cars were hooting impatiently,’ Mike says. ‘Drivers were shouting at us. But we had heard the news. We just couldn’t believe it. BCal had got the London route. We were nowhere. Impossible!’

  In Manila, in the flat of Duncan Pring, Cathay’s Philippines representative, guests were assembling for a small dinner party. His wife was pouring drinks. A telephone rang and Duncan went to answer it. He came back with an expression of doom on his face. Cathay refused! It was as if all the lights in the flat had gone out.

  Cathay Pacific lost no time in preparing an appeal to the then British Minister of Trade, John Nott, and Duncan Bluck called a press conference in Hong Kong to tell journalists that the basis of the Company’s appeal against this ‘extraordinary’ CAA decision would be public preference for Cathay’s 747s and the desire of Hong Kong people to see Hong Kong-based Cathay on the route: ‘We are not appealing on the legality of the matter, but rather on the morality of it,’ he said.

  It seemed clear to Bluck, to Adrian Swire and other Cathay directors, that the CAA decision was based essentially on the dubious premise that the smaller DC-10 was a more suitable aircraft for the route than the Jumbo 747. They hoped the Colony’s Governor, Sir Murray Maclehose, would share their outrage and mobilize the Foreign Office in London (and Lord Carrington, the Foreign Minister) behind Cathay’s case. Cathay had been insulted – treated by Colegate’s CAA like ‘a 2nd XI colonial airline striving unjustifiably to force its way into the profitable long-haul UK-based preserve of pukka U.K. independents’. It would now be necessary to mount a wide press campaign in Hong Kong, to gain support from local Chinese administrative bodies and so on. ‘Inevitably and sadly’ – there one hears the patriotic voice of Swire – ‘this campaign would have to follow the perfidious Albion line.’

  It must have seemed like perfidious Albion indeed. At the headquarters of John Swire & Sons, Mr Heseltine’s smiling intervention over the TriStars on behalf of Rolls-Royce and the TriStar had not been forgotten. A joint telex from Adrian, Bluck and Bremridge to Michael Miles, Managing Director in Hong Kong, ended with these words:

  We have now reached the ludicrous situation where the U.K., having leaned on Cathay to prevent it buying the DC-10, is now proposing to richly reward BCal purely for having done so.

  It was not in the least surprising that this theme recurred in a letter from Adrian to Bluck a little later as they waited on tenterhooks for John Nott’s decision on Cathay’s appeal. If the decision went against them, ‘We must react very quickly and positively if we are to extract the maximum from an injustice of this kind.’ Among other things, they should demand an immediate meeting with John Nott. The purpose of such a meeting would be – partly – ‘to put on record that, in our view, HMG had let us down/double-crossed us on a very fundamental matter, and that this double-dealing gravely undermines our faith for the future in HMG’s evenhandedness….’ The fundamental matter referred to was, of course, the pressures that had been brought to bear ‘to make us change our DC-10 order to the Rolls-Royce-powered Lockheed 1011’.

  The result of the appeal was expected in June 1980. Meanwhile speculation and backstairs activity carried on apace.

  On the adverse side, Duncan Bluck reported that certain people in ΒA were now in a bloody-minded mood and making it clear that they would do their best ‘to run us off the London route’ if Nott did allow them on it. On the other hand Michael Miles, invited to dine à trois with a local friend and John Nott in Hong Kong on a visit, reported that Nott was ‘very relaxed’ and spoke sympathetically of ‘Cathay’s natural claims’ to the route. Nott also struck Miles – as he struck numerous others – as a man of very independent mind. He was well briefed, too, and obviously had a good grasp of Cathay’s problems. That sounded just what everyone in Cathay wanted to hear.

  Popular support for Cathay in Hong Kong gathered momentum. Everyone who was anyone wrote in to call for the overturn of the CAA’s ‘outrageous decision’. That included the Chinese press. For example, Wah Kiu Yat Po:

  The CAA considered BCal’s DC-10s to be more suitable for the route than Cathay’s 747s. Such reasons are incomprehensible since BA which is at present monopolising the route is also using 747s. We can predict that about half the would-be passengers on the Hong Kong–London route will be orientals
and it is only justifiable that Cathay, as an experienced airline servicing Asian countries should be granted the licence…. A majority of passengers would certainly pick Cathay as their first choice. So the CAA’s worry about the shortage in passenger demand is unjustified.

  The Hon. O. V. Cheung in the Legislative Council had this to say:

  Cathay was encouraged to buy UK equipment. They specified their 747s should be powered by Rolls Royce engines. So far they have invested £70 million in Rolls Royce engines to that end and plan to invest £10 million a year on other equipment in furtherance of reciprocity….

  And a columnist in Sing Tao Jih Pao wrote under the headline ‘Hong Kong Loses Face’ something much stronger, something that underlined in thick black strokes of the pen how much Cathay Pacific and the Hong Kong Chinese population had come together:

  I vaguely remember an anecdote in Dr Lin Yu-tang’s book. It went like this: one day in the 19th century, a Chinese ambassador was walking in his clumsy padded quilt coat on a street in Washington, D.C., and coming across a swaggering American who asked, ‘What the hell are you? Japanese? Chinese? or Siamese?’

  The Chinese Ambassador replied coldly, ‘What are you anyway? A monkey? An ass or a Yankee?’

  This of course, happened in the age of gunboat diplomacy when China was generally regarded as a colony, or simply a geographical term instead of a sovereign state. The Chinese were then treated as hordes or coolies next only to dogs which were prohibited to enter public parks in the international settlement of Shanghai.