21A
CONFIDENTIAL
Mr Boon MAED G63A/1
Mr Whiteway FED K291
HONG KONG/KOREA AIR SERVICES
1.
HKK 184/1
23 JAN
تتكة
..
en
My main comment on the proposal to give FCO upport to the idea of direct London/Seoul flights is that now is a particularly bad time to do so. The recent EEC/Hong Kong textile negotiations have done some harm to Britain's image in Hong Kong and disagreement on flights to and from the Gulf have aggrevated the position. Any suggestion that CPA should have to lose revenue, even though I understand the amount likely to be involved is small, because of the needs of BA would be greeted with indignation. That indignation would be much greater and, in my view, much more justified if the benefit were to be offered to a foreign airline.
2.
I know that it is HMG's policy to treat air service questions in isolation but I strongly believe that, in this case, where a large part of the argument in support of the proposal is that it would help our export performance, we must take into account the potentially harmful effects such a move would have on our export performance in the very important Hong Kong market. I cannot in any case accept that a direct air service is a necessity if we are to have a fair chance of participating in the development of Korea (paragraph 2 of the draft).
3. I am a little baffled by the statement that the French and Swiss have direct services when, in the minutes of the meeting, it states that no European airline services South Korea. Does this mean that only KAL operated direct flights to and from Europe?
4. I am equally surprised at the statement that" there seems to be no basic objection" to KAL starting a service. At the meeting Mr Lello gave us a major reason for not reaching an agreement without the justification of sufficient traffic, and KAL's non discounting activities.
5. To sum up I am opposed to the idea, at least at present, of initiating any talks. I would urge that the question be deferred for at least three months. If, at the end of that time, BA show more enthusiasm for the proposal, we could look at it again, but in doing so we would have to give very early warning to Hong Kong.
13 January 1978
CONFIDENTIAL
J Thompson K 245
Hong Kong & General Department
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