CONFIDENTIAL
the DOT could provide an analysis of the factors involved, quantifying them where possible. This would need to include calculations of the profit or loss to British Airways on a variety of possible routes (eg a direct route similar to Air France or Swiss Air or via Hong Kong with or without the right to pick up: passengers). We shall need too an estimate of the value to Cathay Pacific Airways of its present flights to Taiwan; and it would be worth considering at the same time whether an expansion of non-scheduled flights between China and Hong Kong might be more profitable than a scheduled service (if indeed these are mutually exclusive). On these last points it would be helpful if Hong Kong could offer their own comments at this stage.
4.
Once we have a clear idea of the commercial pros and cons we can weigh into the balance less tangible elements such as the effect on our political relations with China and Hong Kong.
5. I suggest that we ought to aim to get a completed analysis ready by the end of September. Perhaps you could let me know whether you see any difficulties about this time-table.
CC:
Mr Garside, PEKING Mr Orr, HONG KONG Mr Love, DOT/CRE 4 Mr Northover, MAED
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You'rs sincerel
Vloges Allen
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CONFIDENTIAL
R E Allen
Far Eastern Department
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