CONFIDENTIAL
SINCE THE STATISTICS OF THE FIRST FULL YEAR OF OPERATIONS WOULD
NEED TO BE OBTAINED AND ANALYSED BEFORE DISCUSSIONS WOULD BE
FRUITFUL. THE CHINESE WILL NOT AGREE NOW ON THE PRECISE
MANDATE OF THE REVIEW, BUT THEY KNOW THAT, SO FAR AS THE
REGIONAL ROUTES ARE CONCERNED, IT WOULD BE OUR INTENTION TO
SECURE FURTHER POINTS IN CHINA AND MOVEMENT TOWARDS EQUALITY OF
CAPACITY.
4. THE MAIN DISADVANTAGE OF THIS OPTION ARE THAT IT GIVES THE CHINESE A FAVOURABLE BALANCE ON ALL ASPECTS OF THE REGIONAL SERVICES, AND THAT IT PREVENTS HONG KONG PEKING SECTOR TRAFFIC FROM TRAVELLING 3Y A BRITISH CARRIER (DESPITE THE LARGE NUMBER OF EMPTY SEATS ON BA'S SERVICES) UNLESS WE ARE SUBSEQUENTLY ABLE TO NEGOTIATE SOME EASING OF THE CHINESE RESTRICTIONS. THE ADVANTAGES ARE THAT SCHEDULED SERVICES WOULD SOON START BOTH ON THE TRUNK ROUTE AND ON ROUTES LINKING HONG KONG WITH THE TWO MOST IMPORTANT CITIES IN CHINA. BA'S TRUNK ROUTE SERVICES WOULD BE ON A TOLERABLY VIABLE BASIS FROM THE OUTSET (SEE ALSO PARA 11 BELOW). A HONG KONG BASED CARRIER WOULD BE
ABLE TO START SERVICES TO SHANGHAI FROM THE OUTSET WITH AN ASSURANCE OF TAKING OVER THE PEKING ROUTE AT A LATER STAGE (PARA 2 OF MY TEL.NO.549).
5.
OPTION B WOULD PROVIDE:
1) AN EXCHANGE OF TRUNK ROUTES WITH THE SAME CAPACITY PROV-
ISONS AND TIMING AS IN PARA 3(1) ABOVE. BA WOULD BE ABLE TO
OPERATE THROUGH HONG KONG BUT WITHOUT ANY TRAFFIC RIGHTS
BETWEEN HONG KONG AND PEKING.
(11) RIGHTS FOR BOTH SIDES BETWEEN CANTON AND HONG KONG. A BRITISH
CARRIER WOULD BE ALLOWED TO OPERATE A DAILY SERVICE WITH A TRIDENT
OR AIRCRAFT OF SIMILAR CAPACITY AND CAAC WOULD HAVE UNRESTRICTED
FREQUENCY.
THE QUESTION OF FURTHER REGIONAL SERVICES WOULD BE LEFT OVER FOR
SUBSEQUENT NEGOTIATION. THE TIMING OF THIS HAS NOT BEEN
DISCUSSED.
6.
DE NO
THE DISADVANTAGES ARE THAT THIS OPTION WOULD PROVIDE NO
DIRECT SCHEDULED SERVICE FROM HONG KONG TO ANY POINT IN CHINA
OTHER THAN CANTON (FOR WHICH GOOD COMMUNICATIONS EXIST ALREADY).
3
ZOBBY HONG KONG.
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