CONFIDENTIAL

(C) THE REASONS FOR FINDING THE DC10 (WHICH HAS COME UNDER CONSIDERABLE ATTACK FROM THE PUBLIC ON ACCOUNT OF ITS SAFETY RECORD) MORE SUITABLE FOR THE ROUTE THAN CPA'S B7478, PARTICULARLY

IN VIEW OF FACT THAT BA OPERATE B7475.

(D) THE OWNERSHIP OF BCAL AND THE APPARENT CAA BIAS IN ECAL'S FAVOUR, PARTICULARLY IN THE LIGHT OF BCAL'S NOW-PROPOSED AUGUST INAUGURATION OF THEIR LONDON-HONG KONG SERVICE (IT IS WELL-KNOWN HERE THAT CPA HAD PLANNED TO UTART OPERATIONS ON 9 MAY). THERE HAVE ALSO BEEN SUGGESTIONS THAT BCAL IS CURRENTLY EXPERIENCING FINANCIAL DIFFICULTIES.

(E) GENERALLY DECISION IS BEING INTERPRETED AS A POLITICAL DECISION IMPOSED BY AN IMPERIAL GOVERNMANT ON A COLONY IN ORDER TO PROTECT UK-REGISTERED AIRLINES AGAINST THE INTEREST OF A HONG KONG-REGISTERED AIRLINE. THIS IN TURN INVITES COMPARISON WITH OPEN HONG KONG MARKET FOR UK EXPORTS PARTICULARLY IN THE LIGHT OF RECENT SUCCESSES IN MAJOR PROJECTS.

MACLEHOSE

ALLOT

DIST:

MAED

HK YGD

2

CONFIDENTIAL

COPIES TO":

Дот/слен

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