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Tel/IC (Cont.)
HONG KONG (GOV & BCARFE)
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Telegram No.
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have been made about carriage of Korean workers to Seoul by KAL.
Whilst it may seem that we are safeguarding ourselves to a large extent by agreeing to
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the concession for a six month period only one has to bear in mind it could be more provoking to take it away once granted than to deny it in the first place. Also it needs to be borne in mind that at least some of the traffic, other than that (if any) which is Government-directed (and which presumably does not need inducements) becomes captive by inducements offered and the ability to offer stopover in Hong Kong is an inducement that could lead to an increase in the amount of Korea-
Middle East vv traffic that will become captive to KAL in the future thus eating into the traffic which CPA and BA now carry over Hong Kong or that additional traffic they hope to acquire. To the extent that traffic is merely transferred in this way from one airline to another the gain to the Hong Kong economy may be imaginary rather than
real.
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You will realise that to grant traffic rights, albeit own stopover only, to an airline on a route that does not exist under the relevant agreement is an important departure from both principle and practice. We would hesitate to takɛ set such a precedent and could certainly not do it unless we were wholly satisfied that it was in our overall
We feel that it would be long term interest.
above. premature at this stage for the/fing reasons to grant KAL the concessions they are seeking and we would not want BCARFE to say anything to the Koreans during his current visit that would imply that we have made up our minds on it.
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