can be no question of CPA enjoying fifth freedom rights beyond Kuala Lumpur to them. The question then arises as to whether it would be worth putting them into the Route Schedule, albeit without rights. I reached the conclusion that, with the direct route over China available, no airline in its right mind would fly from Hong Kong to the Gulf via Kuala Lumpur without fifth freedom rights and therefore it was not worth trying to persuade the Malaysians to let us have them as route points without their wanting something in return.

4 Singapore as a bevond point on UK Route 3

Although we have implicitly in the letter given up Singapore as a beyond point with rights on UK Route 3 (and explicitly offered to give it up during the May talks), CPA might well some day want to use it in combination, and, better still, with rights. I have therefore put it into the Route Schedule.

5

Intermediate Rights

These, in the concern over beyond rights, got no mention at all in either the February, May or July discussions. I think our best plan is to give them no mention in the CMU and thus quietly get out from under those petty restrictions on CPA's ability to exercise intermediate fifth freedom rights contained in the Wilson/Ibraihm exchanges of 19 December 1975 and the CMU of 13 March 1974. Also by including Kuala Lumpur and Penang in the Route Schedule, no mention elsewhere gives CPA the automatic right to secure them both on all services. I also thought it just worthwhile retaining Saigon (Ho Chi Minh City) in UK Route 2.

Yours sincerely

*...

TH Stables

cenich

Se.c. BCARFE, Hong Kong

сми

P. IM, BIZ, Kuala Lumpur

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