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MDHIAN 5390.

THUS STOP THE LABORIOUS PRACTICE OF VIETNAMESE DELEGATIONS COMING HERE. WE COULD PROBABLY BEST OFFER THIS FACILITY IN CONNECTION WITH FURTHER DISCUSSIONS ON IMPROVING ARRANGEMENTS FOR RETURNING BOAT PEOPLE E.G. WHEN LE THO COMES HERE IN THE NEW YEAR. AT A LATER STAGE, WE MIGHT BE PREPARED TO AGREE TO THE TRADING MISSION BECOMING A RECOGNISED TRADE OFFICE.

AIR SERVICES

8. DIRECT SCHEDULED SERVICES BETWEEN HONG KONG AND VIETNAM (TO SAIGON, NOW HO CHI MINH CITY) CEASED IN 1975. IN THE EARLY 1980'S CATHAY PACIFIC (CPA) OPERATED A NUMBER OF PASSENGER AND CARGO CHARTERS: THE FORMER MAINLY TO CARRY SPONSORED REFUGEES TO THE US AND CANADA, THE LATTER TO TRANSPORT GIFT PARCELS AND RELIEF SUPPLIES. MORE RECENTLY, BOTH CPA AND DRAGONAIR (HDA) HAVE OPERATED UNHCR CHARTERS.

9. IN MID-AUGUST 1987, BOTH CPA AND HDA APPLIED TO THE AIR TRANSPORT LICENSING AUTHORITY CATLA) FOR A LICENCE TO SERVICE VIETNAM CHO CHI MIN CITY AND HANOI). DUE TO PREVAILING POLITICAL AND SECURITY PROBLEMS, THE AIRLINES WITHDREW THEIR APPLICATIONS ON 1 SEPTEMBER 1987, AT THE REQUEST OF THE HONG KONG GOVERNMENT. AT THE TIME, HDA ALSO ADMITTED THAT THEY HAD MADE INFORMAL ENQUIRIES OF NCNA AND HAD BEEN WARNED OFF. CONCURRENTLY THE DCA ADVISED TRANSCORP (THEN A HONG KONG REGISTERED AND LICENSED ALL- CARGO AIRLINE) TO HOLD IN ABEYANCE THEIR PLANS TO OPERATE FREIGHT CHARTERS BETWEEN HONG KONG AND HO CHI MINH CITY.

10. ALTHOUGH FROM TIME TO TIME IN THE INTERVENING PERIOD CPA REAFFIRMED THEIR INTEREST OF RESUMING DIRECT SERVICES TO VIETNAM, NOTHING HAPPENED UNTIL JULY/AUGUST 1989 WHEN CPA, HDA AND AIR HONG KONG (AHK) ALL APPLIED TO ATLA FOR A LICENCE TO OPERATE HONG KONG/HANOI/HO CHI MINH CITY. THE APPLICATIONS WERE GAZETTED IN SEPTEMBER 1989, BUT BEFORE THE SCHEDULED ATLA HEARING IN JANUARY 1990, HDA WITHDREW THEIR APPLICATION. ON 16 MARCH ATLA ANNOUNCED ITS DECISION TO LICENSE BOTH CPA (UNLIMITED COMBINATION AND ALL- CARGO SERVICES TO BOTH DESTINATIONS) AND AHK CONCE DAILY ALL- CARGO TO BOTH DESTINATIONS). SINCE THAT TIME BOTH AIRLINES HAVE PRESSED ORALLY, AND CPA IN WRITING, FOR THE HKG TO GIVE EFFECT TO THEIR LICENCES. CPA HAVE ALSO MADE PUBLIC THEIR ENTHUSIASM FOR AN EARLY RESUMPTION OF DIRECT SERVICES. THERE IS ALSO SUPPORT FROM THE BUSINESS COMMUNITY.

11. THERE HAS BEEN SOME PRESSURE FROM VIETNAMESE AIRLINES FOR AN EARLY RESUMPTION OF DIRECT SERVICES. IN MARCH 1990 AIR SAIGON

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