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CONFIDENTIAL
AIR SERVICES
19.
Hong Kong build and maintain their own airport.
The UK controls the use of it, largely in the world-
wide interests of Britiah Airways and, to a lesser
extent, of the Hong Kong airline CPA. This is a
constant source of friction.
20. The Government of Hong Kong have for some time
been urging us, for their own political and commercial
reasons, to license a service to Hong Kong by the
Scandinavian airline SAS. Our continued refusal has
grown from a minor to a major issue. There have
however been further discussions with the Hong Kong
Government, as a result of which agreement has been
reached on the handling of the Scandinavian request.
The Hong Kong Government agree that it is to the
advantage of Hong Kong, no less than the UK, to
maintain the value of Hong Kong as a bargaining counter
in negotiations over air traffic rights, and that there
is no reason to give the Scandinavians something for
nothing. The DTI have therefore agreed with the Hong
Kong Government that a single weekly service should be
offered to the Scandinavians for reasonable
compensation within the normal framework of air traffic
rights negotiations. We have proposed a meeting to
discuss this, with the Scandinavians as soon as possible
and their reply is now awaited. Offer of a bright weekly
to offer.
They may not like the
service. But this is all that Hong Kong have asked us
There may also still be disagreement on the
amount of compensation to be paid. On this Hong Kong
will be upset if they think we have prevented
agreement by holding out for too high a figure.
CONFIDENTIAL
/REGISTER