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[TEXT]

Please pass the following to Mr Royle as additional

briefing for his visit to Hong Kong.

UK/MALAYSIA AIR SERVICES NEGOTIATIONS

1. The authorities in Hong Kong have been disturbed by a

recent report emanating from a Malaysian airline source

transmitted by Mr Wilson of BOAC in Hong Kong. He reported

that the Malaysians might be aout to change their negotiating

stance to.one from which they would be prepared to grant

traffic rights in Malaysia only for the BOAC trunk services

to Australia and expect to recieve in return traffic rights

in Hong Kong for their direct services from Kualalumpur.

This report was forwarded in BCARFE's telegram ALOT 65 which included the BOAC Wilson's report that the source had

confirmed that the Malaysians intended to grant no rights for

Cathay Pacific Airways and appeared to anticipate that no

CONFIDENΤΙΑΙ,

!

/rights

}

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