TNAG-0778-FCO40-982-Involvement-of-Hong-Kong-in-air-services-agreements-1978 — Page 24

GR

425

CONFIDENTIAL

HKK ISLAN

283

( ॰

IMMEDIATE

CYPHER/CAT A

DAK

2 MAY 1978

FM FOREIGN AND COMMONWEALTH OFFICE 191120Z

INDEX

PA

Acron Taten

No

See

CONFIDENTIAL

328

DESKBY 192359Z

818

TO IMMEDIATE HONG KONG (GOVERNOR AND BCARFE) TELNO 402 OF 19 MAY INFO SEOUL

*lf. YOUR TELNO 539: UK/KOREA AIR SERVICES

1. WE HAVE NOW RECONSIDERED THE MATTER CAREFULLY IN THE LIGHT OF YOUR TELEGRAM UNDER REFERENCE.

2. THE ESSENTIAL POSITION AS WE SEE IT IS THAT BY GRANTING THIS CONCESSION TO KAL WE WOULD, IN EFFECT, BE GRANTING THEM A NEW ROUTE, ALBEIT ONE LIMITED TO OWN STOPOVER RIGHTS AT HONG KONG, ON ALL THE JEDDAH-SEOUL TRAFFIC TRAVELLING ON THE TWO SERVICES PER WEEK THAT GO VIA HONG KONG. THERE IS NO DOUBT IN OUR MINDS THAT SOME OF THE TRAFFIC WHICH KAL WILL CAPTURE THEREBY WOULD OTHERWISE FALL TO BA AND CPA. WE DO NOT UNDERSTAND WHY QUOTE CPA WOULD NOT ANTICIPATE ANY EFFECT ON THEIR ESTIMATES OF BAH/KKG. TRAFFIC SO LONG AS ADEQUATE MEASURES TO POLICE KAL ACTIVITIES WERE INTRODUCED UNQUOTE. BA ESTIMATE THAT THEY THEMSELVES COULD

LOSE ABOUT HALF THEIR EXPECTED TRAFFIC IRRESPECTIVE OF THE EFFICACY OF THE POLICING: IT IS SIGNIFICANT HERE THAT BA AND CPA HAVE THE SAME AGENT IN KOREA.

3. WE ARE CONVINCED THAT, IN SEEKING THIS CONCESSION, KAL IS NOT MOTIVATED BY SOLICITUDE FOR THE WELFARE AND INTERESTS OF THOSE KOREAN WORKERS WHO MAY IN FACT BE QUOTE CAPTIVE TRAFFIC UNQUOTE AND THAT ITS PRIME INTENTION IS TO TAKE FROM BA AND CPA SOME OR ALL OF THE TRAFFIC WHICH IS ATTRACTED TO THEM BECAUSE OF THEIR ADILITY TO OFFER STOPOVER IN HONG KONG.

4. AS WE SAID IN OUR TELNO 309 THERE IS AN IMPORTANT POINT OF PRINCIPLE INVOLVED AND WHILST WE WOULD NOT NECESSARILY STAND RIGIDLY ON PRINCIPLE IF THERE WERE OFF-SETTING ADVANTAGES IN

AIR SERVICES TERMS TO BE DERIVED, THERE DOES NOT APPEAR TO BE

SUCH ADVANTAGE THAT WE COULD SEEK IN THIS CASE.

CONFIDENTIAL

15. WE