CONFIDENTIAL
Background Note for the Chancellor of the
Duchy of Lancaster
KLM and Hong Kong
The Governor's views on the admission of major trunk
carriers to Hong Kong are well known. He has expressed the
desire that as many as possible of the major airlines who
apply for traffic rights should be admitted to Hong Kong.
This is in pursuance of the aim that Hong Kong should become
a major centre of tourism and communications in the Far East.
He will have been told of the details of the present
Dutch initiative by his political adviser who has recently
been in London and discussed the issue with Hong Kong
Department. It is possible that the Governor will press for
the admission of KLM to Hong Kong. He has recently reminded
us that he would also welcome the admission of SAS.
2.
3. The last Administration refused these rights to the
Dutch in Karch, 1969. In his letter to the Netherlands Prime
Minister the then Prime Minister said however that we would
always be happy for a solution to be found in the civil
aviation context. The Dutch then initiated a statistical
review of the balance of earnings under the bilateral air
services agreement, in an attempt to prove that the excess
earnings of U.K. carriers justified the grant to KLM of a
once-weekly service to Hong Kong. This examination proved
inconclusive with experts on both sides differing over the
interpretation of the figures. The Dutch eventually wrote
on 20 April, 1970 to call the exercise off.
4.
Mr. Luns, with whom the subject has become something
/of....
CONFIDENTIAL