TNAG-0643-FCO40-791-Involvement-of-Hong-Kong-in-air-services-agreements-1977 — Page 52

CONFIDENTIAL

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sometimes specified.

8.

Under these circumstances and in the light of experience of the crab flights, I would recommend that an additional number of non-scheduled flights by CAAC should be permitted beyond (and if applied for, before) the end of the year for carriage of other foodstuffs and freight but restricted to the slack morning period in order to determine more thoroughly CAAC's competency for operation on a continual basis. A limitation on the number of flights woul d need to be imposed and would emerge from discussions with China Resources Co. This could be expressed in terms of a specific number of flights or a period of time (say 3 months beyond the end of the year), whichever was more appropriate to the operation required.

9.

Although it has never been our practice to require reciprocity for British carriers when permitting foreign carriers to operate non-scheduled services, the proposed inclusion of non-scheduled services in the draft UK/China Air Services Agreement is a most exceptional feature, therefore there could be some advantage in putting up a marker in further discussions with the China Resources Co. that we should expect reciprocity for British carriers in the event that non-scheduled flights developed to become a regular feature. However, if it is decided that we should do so, it would be necessary to avoid any mention of the draft air-services agreement, as this could reactivate interest in the political aspects of CAL & CPA's operations between Hong Kong and Taiwan. On balance and provided additional flights by CAAC are time/number limited, I feel it might be premature to raise the issue of reciprocity at this time, particularly as no British carrier has expressed any interest in non-scheduled operations to China.

RED:ac

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Rectening

(R.E. Downing)

Director of Civil Aviation

CONFIDENTIAL