A
cackgzorci
4. Air servicos negotiations were held at Singapore's request
in London to meet MSA'c wich fox a Zoute to London and across
the Atlantic. Unfortunately the Singapore dolegation, having
done their sums wrong, arrived convinced that BOAC and Cathay Pacific Airway (CPA) were making three times as much out of
the then air service agreement as was MSA. On this basis they
expected to got all they wanted without concessions on their
part. In fact, on the basis of correct figures, profitability
of the two countries' air lines undor the air services agroencnt
has latterly been just about in balanco and we accordingly argued that Singapore could have what it wanted (or most of it)
only if CPA - which to Hong Kong based - were allowed a few more
services to Sing
This had been a sine qua non by the
Governor of Hong Kong, who has long felt aggrieved at the shabby
way CPA is treated by Singaporo.
5.
Prolonged discussion failed to reconcile the two sets of
Pigures and since the Singapore delegation clearly had no
discretion to concede anything to CPA, negotiations broke up without agreement, the British side cmphasising their readiness
to renew the talks at any time. Unfortunately, although tho
Singapore Covernment undoubtedly soon realised that they had
been arguing on false premises, an element or loss of face was
involved and Lee Kuan Yow reacted intemperately. It is doubtful,
however, whether he seriously thought that harassing BOAC would
secure concessions from Her Majesty's Government and his Ministers
2
CONFIDENTIAL
Page 225Page 226