CONFIDENTIAL
9. Inter-governmental
agreement
the need on
on
talks in November last year reached
to increase capacity
the Hong
Kong/Peking route. In return for extra capacity for CAAC (the Chinese airline), CPA are to be allowed for the first
time (from 1 April 1986)
1986) to operate two scheduled services
per week to Peking.
to agree CAAC and CPA were supposed
how this increased capacity could be implemented and report
to their
far,
respective governments by 31
January 1986.
So
the airlines have not
not reached agreement due to CAAC's
reluctance to meet CPA. There have been suggestions that CAAC's unwillingness to reach agreement with CPA is due
to
the intervention of Sir Y K Pao's high-placed friends in
Peking. But this is not proven.
a
f ew
10. Recent contacts with senior Chinese officials and with
CAAC have confirmed that DAL does have the support of influential Chinese in Peking and that DAL will be allowed
to operate
Peking services to major cities such as
and Shanghai. It is not clear however whether the Chinese have in mind scheduled or charter services ог both. For
the
does present DAL
not have an
to ATLA licence
operate
scheduled services to the se two cities and neither does it
have a permit from DCA Hong Kong to
charter operate
flights.
scheduled services i t i s
that expected
further round of air service talks will be held with the
PRC in the coming months.
interest
un
does
a
11. We understand from the DTI that DAL have expressed an in expanding their fleet by purchasing BA146 and Airbus aeroplanes. We welcome this but cannot accept this
trade off for getting DAL on to a particular route
rather than say, CPA (which also purchase
as any
amount of British equipment,
eg Rolls Royce engines
substantial
for
their Boeing 747 and Tristar aircraft). such a preference would be for HKG and not HMG.
Any
decision
on
CONFIDENTIAL