TNAG-0777-FCO40-981-Involvement-of-Hong-Kong-in-air-services-agreements-1978 — Page 185

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3. AS TO CAPACITY, CPA FAVOUR A CHANGE TO PREDETERMINATION OF CAPACITY SO THAT CP AIR BE FROZEN AT THEIR CURRENT THRICE WEEKLY

SERVICE UNTIL SUCH TIME AS A UK DESIGNATED CARRIER TAKES UP AN

EQUIVALENT AMOUNT OF CAPACITY. FURTHER FREQUENCY THEREAFTER TO BE DEPENDENT UPON ROUTE LOAD FACTORS AND FURTHER GOVERNMENTAL TALKS. SUCH AN ARRANGEMENT WOULD NOT SERVE THE PUBLIC INTEREST AND WE SEE NO GOOD REASON TO ADOPT A DIFFERENT POLICY WITH THE CANADIANS THAN WE DID WITH THE AMERICANS IN THE RENEGOTIATION OF THE UK/US ASA. WE THEREFORE FAVOUR THE FREEZING OF CP AIR'S PRESENT LEVEL OF 5TH FREEDOM CAPACITY (3 WIDE-BODIED SERVICES WEEKLY) BUT THAT 3/4TH FREEDOM CAPACITY SHOULD BE UNFETTERED. THIS COULD BE REVIEWED IN THE LIGHT OF A UK DESIGNATED AIRLINE WISHING TO TAKE

UP RIGHTS BETWEEN HONG KONG AND CANADA.

MACLEHOSE

FILES MAED

HK & GD N.A.D

MR.BURROWS MR.CORTAZZI

MR.MURRAY

MR. HALL

[COPIES SENT TO CAD/DOT]

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