CONFIDENTIAL
Pl ensue we are Conentved
11
Mr Morland (MAED)
c.c.
Miss Brown
Mr Murray
Mr McLaren (HKGD) ←
CIVIL AVIATION:
1.
HONG KONG
14/
See minute from
MAED. Et culPA
роль
When Mr Steele telephoned me this morning he said that while his junior Minister, Mr Tebbit, had reluctantly accepted the recommendation, his Secretary of State, Mr Nott, had turned it down. As he says in his letter, he is due to have a meeting with DoT Ministers on 14 June to argue the case. He wanted to know our views and in particular how we would wish to be con- sulted.
2. I told Mr Steele that I could not give him an off-the-cuff answer. There were a number of important implications in both the recommendation which he had made and the alternative of application direct to the CAA. We had to take into account the legal position of Hong Kong vis-à-vis the UK and the possibility that whichever line we took Hong Kong might be induced to seek independence in civil aviation matters. While it was true that to some extent Hong Kong interests were at a disadvantage vis-à-vis UK interests in relation to traffic rights through Hong Kong, this helped to balance the visible trade advantages which Hong Kong were likely to continue to maintain with the UK. Mr Steele said that we might have to sacrifice Hong Kong rights further in the context of both agreements with Malaysia and China. I agreed but pointed out that we had not yet reached this stage in either case.
3. I asked Mr Steele whether it was not possible for British Airways to reach some kind of understanding with CPA. Mr Steele said he did not think this was on the cards. BA were totally opposed to CPA coming on the London route. If CPA came on the route BA would lose as a result of the competition. BA's record on the Hong Kong route had not been a good one (I entirely agreed).
4.
I should be grateful for urgent advice. We need to balance carefully the Hong Kong factors and the UK national interest.
8 June 1979
CONFIDENTIAL
HAH Cortazzi
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