TNAG-0514-FCO40-579-Purchase-of-wide-bodied-aircraft-by-Cathy-Pacific-Airlines-1974 — Page 70

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CONFIRMED THIS POINT HAD BEEN MADE DURING CPA PRESENTATION BUT DID NOT KNOW IF IT HAD CARRIED ANY WEIGHT. 1 THEREFORE PURSUED POIN WITH BLUCK IN LATER CONVERSATION. BLUCK REPLIED THAT DC10-10 COULD (LIKE TRISTAR) COPE WITH TOTAL CURRENT CPA NETWORK, AND HAD BEEN PREFERRED TO DC10-30 AND 10-40 BECAUSE LATTER TWO COST MORE FOR SAME PASSENGER CAPACITY AND THEIR GREATER RANGE WAS NOT NEEDED. THOUGH BOTH LOCKHEED AND DOUGLAS HAD ONLY PAPER PLANS FOR BIGGER AIRCRAFT, CPA STILL BELIEVED DOUGLAS WAS IN BETTER FINANCIAL POSITION TO NOURISH GROWTH OF AIRCRAFT FAMILY AND TO SURVIVE SITUATION DEVELOPING IF AIRCRAFT CHOSEN SUBSEQUENTLY RAN INTO TROUBLE. HE -STRESSED THAT BOTH EXISTING AIRCRAFT WERE GOOD BUT THAT DOUGLAS

WERE JUDGED BETTER ABLE TO WEATHER STORMS AND TO FOSTER TYPE

GROWTH.

5.

ARMSTRONG ALSO COMMENTED ON LEASING CONCEPT AND (THOUGH NOT AWARE OF SWIRE/BROWN VIEW THAT FINANCIAL ASPECT OF LEASING WAS * IMMATERIAL TO CHOICE: PARA. 4 OF YOUR TELEGRAM UNDER REFERENCE

REFERS) GUESSED THAT LEASING WOULD PROVE MORE EXPENSIVE THAN PURHCASE IN MY LATER CONVERSATION WITH BLUCK I ASKED WHETHER, IRRESPECTIVE OF LTS COST ASPECTS, CPA COULD ENVISAGE ANY LEASING PATTERN WHICH COULD PROTECT CPA AGAINST LOCKHEED WEAKNESSES. HE POINTED OUT THIS WOULD ONLY TRANSFER RISK FROM CPA TO LEASING AGENCY (WITH PRESUMED INCREASES IN COSTS AND DIFFICULTIES OVER BRITISH AND AMERICAN GUARANTEES) WITHOUT RESOLVING CPA'S BASIC DISQUIET ABOUT LOCKHEED'S ABILITY TO NOURISH AND DEVELOP. PROBLEM WAS NOT SHORT TERM STRENGTH OF COMPANY IN RELATION TO DC10-10 BUT LONG TERM

MUSCLE AND STAMINA IN RELATION TO CPA'S OWN EXISTENCE AND GROWTH.

EVEN IF CPA WERE PROTECTED FROM COLLAPSE OF LOCKHEED, THEY WOULD

STILL FACE PROBLEM OF REPROVIDING AIRCRAFT.

.6.

IN THIS CONNECTION BLUCK REFERRED TO ARTICLE ON PAGE 79

OF ECONOMIST FOR 2 FEBRUARY ABOUT LOCKHEED POSITION: AND HARTLEY EARLIER TOLD ME THAT BREMBRIDGE HAD QUOTED SAME ARTICLE IN

CONVERSATION WITH LANDALE (HEAD OF JARDINE MATHESON) AS SUMMARISING

BASIC MAIN DIFFICULTY OVER TRISTAR.

7. I AM COPYING THIS TELEGRAM TO ASTON ONLY.

MACLEHOSE

ALLOT DISTRIBUTION

M & TD S & TD

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