TNAG-0866-FCO40-1076-Involvement-of-Hong-Kong-in-air-services-agreements-1979 — Page 6

Mr Barder

CONFIDENTTA)

Mr Aspin

Iw Cargamin. 83/12 (5334)

I agreed this and 184 pleand to see para lt.

"Y NO.

- 2 JAN 920

DESK OFFICER INDEX

PA

Awith

SOUTH AFRICAN AIR SERVICES TO HONG KONG AND TAQ

Problem

A 1.

в, с

D

Mr Pik Botha has made a personal plea to the Secretary

of State to reconsider our refusal to allow SAA to extend

their once weekly service from Johannesburg beyond

Hong Kong to Taipei. The DOT and the Hong Kong Government

have agreed with some reluctance to grant permission, if

the political advantages merit it. How should we reply?

Recommendation

4.

31.12.

sce 535

2. I recommend that we reply to Mr Botha saying that we

have reconsidered the matter, and will allow the extension

SAA requests. We should make it clear that we are doing so

at considerable financial cost to British interests. MAED

and HK&GD agree, I submit a draft telegram.

Background

3. The original application was refused because the Hong

Kong Government objected to the loss of £50,000pa to Cathay

Pacific Airlines, a British company based in Hong Kong.

The South African Embassy were so informed.

4. The Hong Kong Government was reluctant to agree to

this proposal because in the recent past we have on

several occasions traded Hong Kong rights for benefits that

have acrued to the UK and its airlines rather than Hong

Kong and CPA.

5. The Governor is now prepared to allow the request if

the political arguments in favour of granting the application

outweigh the financial loss to Cathay Pacific Airlines.

6.

Pik Botha is wrong in suggesting that CPA have no objections:

CONFIDENTIAL

/Argument