TNAG-0275-FCO40-311-Development-of-Kai-Tak-airport-at-Hong-Kong-1970 — Page 50

CONFIDENTIAL

Because Hong Kong is UK territory, HIG is responsible for

Hong Kong civil aviation matters in the International Civil

Aviation Organisation (ICAO). We dispose of traffic rights at

Kai Tak. Those rights are a major card in our hands in the

complex of air services negotiations with all countries having

major civil aviation interests Their value is estimated at

£20 million per annum in terms of gross passenger revenue; rights

of approximately equivalent value have been obtained for British

airlines elsewhere in the world. We consult Hong Kong about the

disposal of rights at Kai Tak and take as full account as we can

of their wishes and needs; but we are not always able to meet

them since we look to get equivalent advantage for our aviation

interests elsewhore and this is not always available or, in some

cases, required. For example, KLM and SAS seck rights in Hong

Kong and the Hong Kong Government would welcome their services;

but there is nothing of equivalent value in the aviation field

the Dutch and Scandinavians can offer in return and their

requests have therefore been refused. An additi onal factor to

which Hong Kong quite naturally does not attach the same weight

as we do is that we cannot allow the value of the rights in

Hong Kong to be debased by over-saturation of the routes through

the Colony.

6. Hong Kong's dissatisfaction with our "exploitation" of local

rights can only be answered by the general argument that from the

nexus of relations which bind a dependent territory to the

metropolitan country both derive benefits which we do not

normally try to set out in any balance shoet. Over the years the

/ connection

CONFIDENTIAL