CONFIDENTIAL
XCC(92)57
of such charges at Kai Tak in July 1989 (charges are adjusted annually in July). The airlines using Kai Tak have been informed of this intention and the justification for it. They are also aware of our intention to phase in this increase over the remaining years of Kai Tak's life to reach this level on 1 July 1997.
10
Legal advice is that our approach can be justified under relevant guidelines issued by the International Civil Aviation Organization (ICAO) and under the relevant terms of Air Service Agreements (ASA's) binding on us, provided that we can set out a clear financial and economic justification for it. This case has been made to the airlines in several discussions with the International Air Transport Association's (IATA's) User Charges Panel and will be set out shortly in detail to the Department of Transport in London who also wish to be satisfied (as Hong Kong's sovereign power in respect of ICAO and those UK ASA's still applicable to Hong Kong) that this action does not create any risk of putting the UK in breach of any international obligation,
11
Revenues from Concessions - the AA will obtain significant reenue from royalty or rental payments from the following types of "airside" concessions -
a) aircraft maintenance and engineering;
b)
air cargo handling;
c)
aircraft catering;
d) aircraft apron handling;
e)
aircraft refuelling
and from the following types of "landside" concessions within the passenger terminal complex.
f) duty free liquor and tobacco concession;
general retail;
h)
airline and other offices;
i)
baggage handling;
j)
passenger/baggage security.
Executive Council