TNAG-0514-FCO40-579-Purchase-of-wide-bodied-aircraft-by-Cathy-Pacific-Airlines-1974 — Page 55

GR 800A

CONFIDENTIAL

IMMEDIATE

DESKBY GOVERNOR AND BTC HONG KONG 272359Z

CYPHER/CAT A

LAST

18

FM F C 0 271835Z

REF.

NEXT

REF

121

CONFIDENTIAL.

19

2

l'agreed with N. Hitch

1.3

DESKBY 272359Z (GOVERNOR AND BTC)

1974

TO IMMEDIATE GOVERNOR HONG KONG TELNO. 227 OF 27 FEBRUARY/AND TO BRITISH TRADE COMMISSIONER HONG KONG INFO PRIORITY BCARFE HONG KONG.

YOUR TELNO 248.

CHOICE OF WIDE BODIED AIRCRAFT BY CATHAY PACIFIC.

1. JOHN SWIRE, ADRIAN SWIRE AND JOHN BROWNE CALLED TO SEE SIR PETER THORNTON (SECRETARY AEROSPACE AND SHIPPING) AT THEIR OWN REQUEST THIS MORNING, WARRINGTON AND ROGERS WERE PRESENT.

2. THE VISITORS SAID THAT THEY HAD NO DEFINITE PROPOSITION TO PUT

FORWARD AT THIS STAGE. THEIR PURPOSE IN ASKING FOR THIS MEETING

HAD BEEN TO LET US KNOW HOW THEY VIEWED THE SITUATION AT PRESENT

AND TO BE SURE THAT THEY UNDERSTOOD THE GOVERNMENT'S INTEREST.

THE CHOICE BETWEEN THE DC10 AND THE TRISTAR WAS OF FIRST RATE IMPORTANCE FROM CATHAY'S POINT OF VIEW, SINCE A MISTAKE COULD BE DISASTROUS. THEY CONFIRMED THAT, AS REPORTED IN YOUR TEL. UNDER REFERENCE, THE CPA BOARD HAD AGREED TO DEFER A DECISION UNTIL THE NEXT BOARD MEETING ON 18 MARCH. THEY RECOGNISED THAT IF THE

DECISION THEN WENT IN FAVOUR OF THE DC10 AND IF DOUGLAS INSISTED

ON THE PENALTY MENTIONED IN PARA 2 OF YOUR TELNO 242 OF 22

FEBRUARY THEY WOULD BE DOLLARS U.S. 250,000 WORSE OFF THAN AT

PRESENT ALTHOUGH THIS WOULD STILL LEAVE THEM WITH MONEY IN THEIR

POCKET AS COMPARED WITH THE SITUATION WHEN WE INTERVENED AT THE

END OF JANUARY.

3. WE SAID THAT THERE WERE VERY IMPORTANT BRITISH INTERESTS AT STAKE

ON BOTH SIDES IN THIS DECISION. WE RECOGNISED THE IMPLICATIONS

FOR CATHAY. ON THE OTHER HAND LOCKHEED AND ROLLS-ROYCE CONSIDERED

THAT CATHAY'S CHOICE OF WIDE BODIED AIRCRAFT MIGHT WELL HAVE A

DOMINO EFFECT IN THE FAR EAST, ROLLS-ROYCE HAD ESTIMATED THAT

CONFIDENTIAL

/AS MUCH

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