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CONFIDENTIAL
the
the airline must approach the DCA, Hong Kong
Hong Kong to settle
basis
which on
he will support their exercise of traffic rights under intergovernmental Air Services Agreements (ASAs), for which HMG retains responsibility for the time being. DCA then consults with HMG to decide how and when an approach to the other country in question should be made in order to negotiate traffic rights for scheduled
be operated until we
services. Scheduled services cannot be
have secured the specific
the specific agreement of the other Government
and negotiations are often protracted.
4.
as originally
For the reason
given
in pa ra
2
incorporated,
DAL did not meet the
designation of
airlines
to
requirements for the
operate International
and
because i t was not substantially owned
Y
an interest
Services
effectively
a
controlled by HMG or British Nationals. In October 1985
when Sir
K
acquired
in DAL,
radical
restructuring of the airline's shareholding took place, apparently with the aim of meeting the necessary. ownership and control criteria. Details provided by DAL now suggest
that about 65% of the shares are owned
British by
Nationals, with Sir Y K and companies under his control
accounting for about 35% of
A final view has
yet to be reached on whether DAL meet the ASA ownership and control criteria and we await the views of the HKG.
the total.
5.
Sir
The Prime Minister's
Y K Pao wrote to the prime Minister about
interest recently acquired
in DAL on
last 25 October
asking for the support of HMG for "This new Hong Kong
venture".
reply was non-commital.
his
year
Since then DAL has been granted ATLA licences to mount scheduled services to eight regional cities in the PRC;
this is being followed up in discussions between DAL and
DCA Hong Kong prior to any
request being made by
the HKG
for HMG to seek the necessary traffic rights with the PRC.
Application for licences to
Peking and
serve
Shanghai,
which
were
are
already
rejected.
permission
to
operate
served
DAL have
scheduled
Pacific Airways by Cathay
(CPA)
also
applied
to
ATLA
for
services to the UK
and
CONFIDENTIAL