GRS 530
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RECEIVED
DESK OFFK MIDEX
A
NO. $1
Action :kken
FM PEKING 121345Z JUN 79.
DES BY FCO 121607Z HONG KONG 138071Z
TO IMMEDIATE FCO
TELEGRAM NUMBER 549 OF 12 JUNE.
INFO IMMEDIATE HONG KONG.
No
FOLLOWING FROM DELEGATION.
eel
166
ры
162
MY TELNOS 545 AND 546: UK/PRC AIR SERVICES NEGOTIATIONS.
1. AT LU'S SUGGESTION A FURTHER TETE A TETE WAS HELD THIS AFTER-
NOON (12 JUNE).
2. LU STARTED OFF 3Y SAYING THAT OUR REPRESENTATIONS HAD SEEN
CAREFULLY CONSIDERED BY QUOTE HIS GOVERNMENT UNQUOTE. THEY HAD
DECIDED TO ACCEDE TO OUR DEMAND FOR AN ASSURANCE THAT A HONG KONG
BASED CARRIER YOULD CE ABLE TO OPERATE THE HONG KONG-PEKING ROUTE (UNDER TERMS TO BE AGREED AT THE TIME) ONCE BA CEASED TO OPERATE OVER HONG YONG AND ADOPTED THE DIRECT ROUTEING TO PEKING. HOWEVER, THEY WERE NOT REPEAT NOT PREPARED TO MOVE ON ANY OF THE OTHER
POINTS IN PARA 2 OF MY SECOND TUR.
3.
ROGERS MADE IT PLAIN THAT HE THOUGHT THAERE WAS NO CHANCE OF
AGREEMENT ON THIS BASIS. DESPITE LENGTHY ARGUMENT LU REFUSED
TO BUDGE ON THE RATIO OF CAPACITY AND POINTS IN THE REGION AND ON ANY INCREASE IN BA'S TRAFFIC RIGHTS BETWEEN HONG KONG AND PEKING ABOVE THE QUOTE TRUNK ROUTE STOP OVER UNQUOTE, WHICH HE HAD PREVIOUSLY OFFERED. HOWEVER HE EVENTUALLY ACCEPTED A COMPROMISE FORMULA REGARDING BA'S CAPACITY ON THE TRUNK ROUTE. THIS WAS THAT BA SHOULD BE ABLE TO OPERATE 2 B747 SERVICES A WEEK FROM THE OUTSET ON THE UNDERSTANDING THAT THE CAPACITY TO BE USED FOR THE CARRIAGE OF END TO END LONDON-PEKING TRAFFIC WOULD BE RESTRICTED TO THE EQUIVALENT OF 2XB707 SERVICES. THE SAME RESTRICTIONS WOULD APPLY TO CAAC WHEN THEY SUBSTITUTED B747S FOR B707S ON THE TRUNK ROUTE. LIKE ALL THE OTHER PROVISIONS THESE RESTRICTIONS WOULD BE SUBJECT TO REVIEW A YEAR OR TWO AFTER SERVICES COMMENCED.
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