CONFIDENTIAL
Brief No 2
SIR LESLIE MONSON'S VISIT TO HONG KONG
CIVIL AVIATION
Traffic Rights for SAS
APRIL 1972
1. The Scandinavians have recently renewed a request for traffic rights at Hong Kong. It has been strongly supported by the Governor, and equally strongly opposed by the DTI.
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The DTI's case, briefly, is that any frequencies granted to SAS will draw traffic away from BOAC. They argue that, when rights were granted to KLM, largely as part of the price for Dutch support in the negotiations for our entry to the EEC, it was agreed that rights for other airlines could be withheld indifinitely, They expect that the grant of rights to SAS would be followed by a similar request from SABENA. 3. The Hong Kong case is based on the increased traffic
between Hong Kong and the Scandinavian countries, and the need to develop tourism; and on their need for Scandinavian goodwill in the context of their textile negotiations with those countries. Underlying it, however, is the conviction that BOAC annually make millions of pounds out of traffic rights at Hong Kong, but that the Colony's views are not given anything like adequate weight when the grant of these traffic rights is made by the DTI. People in Hong Kong become emotional about the bartering away of traffic rights there in exchange for advantages for BOAC elsewhere. The situation has been greatly aggravated by our refusal to assist financially with the development of Kaitak Airport. Proposalo for finance by HMG for navigational aids are to be put forward by the Governor, but we are likely to have difficulty in
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CONFIDENTIAL
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