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