CONFIDENTIAL
Governor being informed). There are very strong aviation
reasons against giving UAA rights at Hong Kong in any new agreement that may be negotiated, but we cannot entirely exclude the possibility that it would be politically
difficult to refuse.
7. The Governor opposes any move to terminate UAA's
rights at Hong Kong. He maintains that the cancellation
of UAA rights is likely to revive public criticism of the
U.K.'s restrictive control of traffic rights at Kai Tak,
the more so since H.M.G. makes no contribution to the
provision of facilities at Kai Tak (see separate brief).
He also claims that the loss of UAA landing feea will
cost Hong Kong about £70,000 a year.
8.
Consideration has been given to the possibility that
if at the next round of talks UAA's traffic rights at Hong
Kong were withdraw, we could soften the blow for Hong Kong
by substituting KLM for UAA, It is however impossible to
predict the outcome of these talks and there is always the
possibility that for political reasons we might not wish
to exclude UAA. We cannot therefore, until nearer the
time, give the Board of Trade a firm promise that we will
agree to refuse the Egyptians, even in order to transfer some
of their rights to the Dutch.
9. The possibility of such a deal has not been discussed
with the Governor. If he should raise the subject of UAA's
rights at Hong Kong, it is recommended that the Chancellor
should say that Hong Kong's views are well known and that at
the next round of talks in Cairo they will be taken fully
into account.
CONFIDENTIAL