Archive

Large scale document archive

1983 Apr 6 We
Archive (Reagan Library)

Economy: Reagan letter to Thatcher (aviation) [declassified 1998 & 2000]

Document type: Declassified documents
Document kind: Archive
Venue: White House
Source: Reagan Library: NSA Head of State File (Box 35)
Journalist: -
Editorial comments: Reagan letter declassified 13 Oct 1998, Clark briefing 28 March 2000.
Importance ranking: Major
Word count: 621 words
Themes: Privatized & state industries, Trade, Foreign policy (USA), Law & order, Transport

(1) President Reagan’s letter:

Declassified 98-005#10
By SMF, NARA, Date 10/3/98

Confidential

April 6, 1983

Dear Margaret:

Your message of March 29, regarding the antitrust investigation of airline price-fixing, reached me just as I left Washington for a few days in California. I wanted, however, to respond as soon as possible, as you asked.

After checking with my officials, I am afraid that we cannot defer any longer the antitrust investigation by our Justice Department of British and other air carriers. There are substantial allegations involved, including fixing and raising air fares without the approval of our aeronautical authorities, and it is my clear obligation to see that our antitrust laws are enforced.

We have reviewed whether this matter should be handled under our bilateral aviation agreement, and have concluded that the agreement does not provide an exception to our antitrust laws. We therefore feel that we can defer the investigation no longer, and will issue subpoenas unless the carriers agree to provide the [end p1] required information voluntarily.

The continuance of the Justice Department investigation does not preclude further rounds of consultations between our officials on this issue, although the correct format will have to be worked out. I have asked George Shultz to be in touch with Francis Pym to make the necessary arrangements.

You know how highly I value our personal relationship and the unique co-operation between our countries on important matters. However in this case I feel that I do not have the latitude to respond to your concerns. I would emphasize that at this point the Justice Department is only investigating allegations, but it is my responsibility that the investigations proceed. [sic] Knowing your personal interest, I will stay abreast of developments in this case.

Sincerely,
Ron

(2) Clark briefing for letter:

Declassified F96-107#187
By SMF, NARA, Date 3/28/00

Confidential

Memorandum for the President
From: William P. Clark
Subject: Reply to Mrs. Thatcher’s Letter on Airline Antitrust Investigation

Issue
Whether to send a message to Mrs. Thatcher turning down her request to suspend the Justice Department’s investigation of British Airways, and to resolve the issue through bilateral consultations.

Facts
Mrs. Thatcher has written to you (Tab B) concerning the Justice Department’s investigation of price fixing by two national British airlines (two US companies and two other foreign airlines are also involved). She asks that you suspend the investigation and resolve the matter through government-government consultations under the US-UK airline agreement. The US-UK airline agreement does not have a provision for consultation of this sort, and one was specifically rejected by the United States during the negotiation of the agreement.

Discussion
Mrs. Thatcher is concerned that the Justice Department investigation will turn up damaging evidence of price-fixing. The now defunct Laker airways has a civil suit pending against British Airways. The British government fears that the evidence in the Justice Department antitrust investigation, if used in the civil suit, will cost British Airways a great deal of money, and make more difficult their plan to denationalize the company. The Justice and State Departments have already made several gestures to British concerns in this investigation, and they feel that government-government consultations can go on in parallel with the investigation, but that it would be wrong to suspend it. The reply for your approval at Tab A tells Mrs. Thatcher that you do not feel that you can suspend the Justice Department investigation, but offers to have consultations as it proceeds. [end p2]

[President ticked to approve the draft.]