1
CONFIDENTIAL
HKG D
FCS/80/98
AKK 18416
RECEIVED IN REGISTRY NO. 51
0 3 JUN 1980
DESK OFFICER
INDEX
PA
J3.6
SECRETARY OF STATE FOR TRADE
REGISTRY Action Taken
Aw 316
Hong Kong/UK Air Route:
cc PS
Ps/Les
Ps luur. Blaker PS IPUS Sir. D. Mailand Mr. Donald Mus. Brown
Civil Aviation Authority Decision
мнед
Legal Advisors.
1. The Hong Kong Attorney-General wrote to you on 21 May
about Cathay Pacific Airways' appeal to you against the
decision of the CAA to license British Caledonian Airways on
the Hong Kong/UK route. Much of what is said in that
submission confirms what Ian Gilmour said in his letter to
you of 7 April.
2. I continue to be concerned about the effect on our
relationship with Hong Kong that your decision on CPA's
appeal could have. There are plenty of purely civil
aviation arguments that you will have been considering, but
my concern is that insufficient account may have been taken
of the United Kingdom's wider relations with Hong Kong.
These relations lead clearly to a Hong Kong/London route
served by airlines based at each end. Two British-based
airlines are not what the Hong Kong public wants. There
has been a considerable and forceful reaction to the CAA
decision in Hong Kong from virtually all sections of the
press, industry and commerce. This reaction indicates how
resentment will further build up if Hong Kong is denied what
the people there will regard as its rightful share of this
important route. Such resentment is likely to affect
Britain's wider interest in Hong Kong and frustrate the
efforts that our Government and Hong Kong are making to
further these interests.
3. I should add that the discussions on the Defence Costs
Agreement will resume in the middle of June. The
preliminary indications are that we will be asking the Hong
Kong Government to increase its contribution to the cost of
CONFIDENTIAL
/the garrison