TNAG-0750-FCO40-954-Visits-of-Sir-Murray-MacLehose--Governor-of-Hong-Kong--to-UK-1978 — Page 82

CONFIDENTIAL

8.

Air Services

1.

Kai Tak airport is important since it is the logical stopping off point on one side of the Pacific. Hong Kong is not able to enter into Air Services Agreements in its own right and therefore, for international civil aviation purposes it is regarded as

a UK airport in exactly the same way as Heathrow. The prime cause of Hong Kong's resentment is the fact that HMG uses Kai Tak as a bargaining counter when negotiating air services without, in Hong Kong's view, taking sufficient account of Hong Kong's

interests.

2.

There is also a feeling that when the choice has to be made HMG invariably favours British Airways in preference to Hong Kong based airlines, of which the most important is Cathay Pacific Airwaves (CPA). This is not true: every effort is made to strike a fair balance between the needs of both air-

lines.

3. At present the main bone of contention is a request from Gulf Air to operate to Hong Kong. We have rejected this request because there was no provision for it in our existing ASA's with the Gulf States. Hong Kong supported the request because they believed CPA's services to Bahrain might otherwise be put at risk. The British view is that there is insufficient traffic to

CONFIDENTIAL

/justify