CODE 18-77
HIT 1984
Mr. McQuade
Hong Kong and General, Dept.
Reference
m groan
don't see why
41
1259
in their letter le posts
read to Jo into
за
arguments worth poss. wa youpse
mua
15
лю
12/11
I APPLY
CATHAY PACIFIC AIRWAYS
1.
рож
droppo reply
aughing in favour of
Callery pret proprael,
Post
in foregy
Вене
I should be grateful if you would look at aspects of Mr. Steven's letter to me of 4 October (photocopy attached) about Cathay Pacific Airways.
2+ ·
Sex42
As it happens PSD has up till now regarded Cathay Pacific not only as a British airline but also as enjoying full parity with BA and B. Cal, so far as FCO business is concerned. Mr. Stevens' intended advocacy of the airline may now, paradoxically, result in its relegation behind the other two carriers for our business on the London Dubai Hong Kong route. Je was therefore right, but not in the way he had in mind, when he suggested in his opening sentence that the position on Cathay Pacific may not be generally understood!
3.
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His reasons for regarding Cathay Pacific as a 'British carrier' for the purposes of our fly British policy, have given rise to some questioning in PSD. Ile says that airline is 70% owned by the Swire Group of London. That seems intended to imply that the Airline's operations somehow benefit the UK economy.
I believe, however, that since Cathay Pacific is Hong Kong based, all its revenue and profits are channelled to the colony, remain there, are invested there and so bring no direct benefit to the UK economy (other than through dividends paid to UK-based share owners). It would be interesting to have confirmation, or otherwise, of whether that understanding is correct. The Airline's profits due to the Hong Kong and Shanghai Banking Corporation in respect of its 30% shareholding would also, I understand, go into the Bank's treasury in Hong Kong and are not relevant to the economy.
4.
Mr. Stevens also makes the point that the Airline's aircraft are all fitted with Rolls Royce engines. But then so are the aircraft of many foreign airlines and we would be unlikely to persuade the Treasury and the DOT to alter the fly British policy to allow us to use any carriers which fly 'planes containing bits manufactured by British industry.
13
5.
Our thought here is not to undermine the position whereby Cathay Pacific is regarded as an honorary' British airline. On the contrary, we see it as in our interests generally to have as many carriers as possible qualifying under the fly Rritish rules. But we want to avoid going into print to posts with arguments that are open to question.
6.