TNAG-0330-FCO40-366-Visit-of-Parliamentary-Under-Secretary-of-State--Anthony-Roy-1972 — Page 93

CONFIDENTIAL

Cathay

3. There are also internal Hong Kong complications.

Pacific Airways (CPA) have informed the Hong Kong Government that

they claim sole rights for any direct service between Hong Kong

and China on the grounds that they had taken over the previously

designated carrier Hong Kong Airways. Hong Kong Air International

(Sir John Clague's helicopter company) has also formally expressed

interest in a route between Hong Kong and Canton. The DTI will

have to sort out the respective claims. A Swiss Company Bodmer

Air Taxi has now written to the DTI seeking permission to operate

an air service between Hong Kong and Canton at the times of the

Canton Fair. We await the Governor's views on this, but we should

obviously prefer such a service to be operated by British or Hong

Kong carriers. A draft Air Services Agreement for transmission to

the Chinese in the near future is in course of preparation. The

DTI cannot yet forecast a date when substantive negotiations will

begin.

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CONFIDENTIAL