TNAG-0781-FCO40-985-Involvement-of-Hong-Kong-in-air-services-agreements-1978 — Page 242

CONFIDENTIAL

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Peter Bryant mentioned in his letter of 20 September to Richard Samuel that CPA carned $80 million in the year ending 31 March 1978 on its services to and through Taiwan. If they were to be denied overflight of Taiwan on services to Japan and Korea there would be additional losses in the extra expense of flying around Taiwan.

I would simply like to say in conclusion that whilst the estimates of potential gains and losses are interesting they do not affect what has all along been our position, that we would not wish to do anything in the context of

securing signature of the ASA with China that would put at risk CPA's earnings to and through Taiwan.

Yours

Swarely

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Mr Northover Mr Garside Mr Orr

MAED Peking Hong Kong

Mr Love

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