LF Standen Esq Department of Trade Shell Mex House
WC2
RESTRICTED
Foreign and Commonwealth Office
London SW1A 2AH
-HKK 184/3
INDEX
19 DEC
Біра
Dear Lesley
UK/SWITZERLAND AIR SERVICES AGREEMENT
1. Thank you for your letter of 1 December with which you enclosed figures showing how the earnings position has changed. I am struck how the Swiss earnings on the Hong Kong route have jumped since 1974, particularly as the following years were not good ones for the airline industry.
2. We agree it would now be right to call for consultations with a view to redressing the imbalance. But it is not clear what we can hope to extract from the Swiss and how successful we are likely to be. The Swiss are bound to know in detail the outcome of the negotiations with the West Germans, in particular that Lufthansa will make no payment to BA in respect of their Hong Kong earnings, and are therefore likely to resist making any concessions to us. I suggest therefore that we should define our objectives as clearly as possible and tell Berne and Hong Kong what they are well in advance of any talks, to avoid wasting time (as far as possible) in arguments later. Hong Kong would, I think, view with dismay any proposal to reduce Swissair's service.
3. I understand that Hong Kong are aware of your concern at the imbalance of earnings and that you are now preparing a telegram to tell them you are calling for talks. I am sure they will want to be kept closely informed and given the opportunity to attend the talks.
Yours ever Martin
MR Morland
Maritime, Aviation & Environment Dept
cc:
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