CONFIDENTIAL
6.
AS REGARDS THE OTHER POINTS
(A) LU CONFIRMED THAT HE WAS NOT PREPARED TO GO BEYOND A RATIO OF 6:2 IN THE NUMBER OF POINTS ON THE REGIONAL ROUTES SEMICOLON (B) SO FAR AS SHANGHAI IS CONCERNED HE SAID THE FURTHEST HE WOULD GO WAS A FREQUENCY RATIO OF 2:1 IN CAAC'S FAVOUR SEMICOLON (C) LU INSISTED THAT THE FURTHEST HE WOULD GO AS REGARDS BA'S RIGHTS ON THEYONG KONG-PEKING SECTOR WAS THAT THEY SHOULD HAVE QUOTE TRUNK ROUTE STOPOVER RIGHTS UNQUOTE. HE
CLAIMED NOT TO HAVE AGREED THE FORMULA IN PARA 2 OF TUR ABOUT
THE POSSIBILITY OF REMOVING THE LIMITATIONS ON BA'S CARRIAGE
OF TRAFFIC ON THE HONG KONG-PEKING SECTOR ALTHOUGH HE DID
NOT DENY THAT THIS WOULD BE A POSSIBLE OUTCOME OF ONE OF
THE REVIEWS.
(D) THE ONLY SMALL CONCESSION HE WAS PREPARED TO MAKE WAS TO ACCEPT A LIMIT OF FIVE FREQUENCIES PER WEEK BY CAAC ON THE HONG KONG-PEKING SECTOR. THIS WOULD IN EFFECT MEAN THAT
THE CAAC WOULD NEED TO COME BACK TO US IF THE TOTAL TRAFFIC ON THAT SECTOR ROSE TO MORE THAN ABOUT 60,000 ONE WAY PASSENGERS
A YEAR.
7.
COMMENT. IT APPEARED FROM SOME OF LU'S REMARKS THAT THE HARD MEN IN THE CAAC GET AT HIM EACH TIME HE GOES BACK TO THEM AND REPORTS ANY CONCESSIONS TO US, ALTHOUGH IT COULD BE THAT HE HIMSELF HAS SECOND THOUGHTS. ROGERS THEREFORE IMPRESSED ON LU THAT IT WAS TOUCH AND GO WHETHER ANY AGREEMENT WOULD BE REACHED AND THAT HE SHOULD REFER THE MATTER NOT ONLY TO HIS COLLEAGUES IN THE AIRLINE, WHO WERE NATURALLY DISPOSED TO SEEK THE BEST POSSIBLE DEAL FOR THEMSELVES, BUT ALSO TO HIS COLLEAGUES IN THE MFA WHO HAD A WIDER INTEREST IN RELATIONS WITH US.
CRADOCK
FILES
FED
HX & GD
LEGAL ADVISERS
[COPIES SENT TO CAD/DOT]
MR BUTLER
MR CORTAZZI MR MURRAY
MAED
2
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