?
G.F. 326
CONFIDENTIAL # 3
- 7 -
(c) under the Chicago Convention air
traffic rights essentially derive
from sovereign territorial rights.
An airport in China would involve
transferring traffic rights from
HMG (and thus Hong Kong) to China
and the end of the Hong Kong-UK
cabotage route. The only way this
could be avoided would be by an
arrangement giving HMG sovereignty
over the site of the airport. It is
inconceivable that China would be
willing to concede sovereignty in
this way;
(a) while therefore an airport in China
might meet HK's needs in terms of
air transport (leaving aside the
possibility of disruption by political
or other disorder) and there would
be no difficulty in securing traffic
rights for UK and HK airlines there,
our present international bargaining
position based on landing rights
for other airlines in Hong Kong would
go. This would be serious for BA
but disastrous for CPA. CPA would
have to depend on what support CPG
was prepared to give it and in practice
it would have to become another
Chinese airline;
CONFIDENTIAL # 3