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CONFIDENTIAL
AKK 184/3
BAUENU BUAL
DESK OF
INDEX
GRS 598
CONFIDENTIAL
DESKBY 041570Z
FM PEKING 841337Z JUN 79
TO IMMEDIATE FCO
TELNO 526 OF 94 JUN
INFO IMMEDIATE HONG KONG
FOLLOWING FROM DELEGATION
No
PAMY TELNO 523: UK/PRC AIR SERVICES NEGOTIATIONS
1. AT A MEETING ON 4 JUNE ROGERS FOUND LU MORE RECEPTIVE TO REASONED ARGUMENTS AND HE SHOWED NO DISPOSITION TO WORK TOWARDS A BREAKING OFF OF THE NEGOTIATIONS (HONG KONG TELNO 89).
2. LU SAID THAT CAAC HAD. STUDIED OUR PROPOSALS FOR A COMMERCIAL AGREEMENT AND APPRECIATED THAT WE WERE WORKING HARD TO FIND A BASIS FOR A DEAL THAT WOULD BE ACCEPTABLE TO BOTH SIDES. HOW- EVER, CAAC HAD NOT SO FAR ENTERED INTO COMMERCIAL AGREEMENTS MITH ANY OTHER AIRLINE AND THIS WAS AN INNOVATION WHICH WOULD REQUIRE GOVERNMENT APPROVAL AT A HIGH LEVEL. THIS WOULD TAKE A LONG TIME. LU THEREFORE THOUGHT IT WOULD BE BEST TO LEAVE THIS PROPOSAL ON ONE SIDE UNTIL CAAC HAD HAD A YEAR OR TWO'S EXPERIENCE OF OPERATING THE ROUTE. HOWEVER, ROGERS POINTED OUT THAT THE COMMERCIAL AGREEMENT WAS DESIGNED TO RESOLVE THE PROBLEMS WITH WHICH THE TWO SIDES WERE FACED IN RESPECT OF THE HONG KONG-REKING SECTOR BY PROTECTING CAAC'S LEGITIMATE COMMERCIAL INTERESTS. OTHER CHINESE GOVERNMENT AGENCIES HAD SHOWN THEMSELVES WILLING TO INNOVATE IN AGREEMENTS WITH FOREIGN CONCERNS: THE AGREEMENT FOR THE OPERATION OF THE HONG KONG-CANTON HOVERCRAFT SERVICE WAS AN EXAMPLE OF THIS, HE THEREFORE SAW NO REASON WHY CAAC SHOULD NOT ADOPT A COMMERCIAL ARRANGEMENT WITH RA - POSSIBLY ON AN EXPERIMENTAL BASIS FOR THE PEKING-HONG KONG SECTOR. THIS WOULD PROVIDE THE KEY TO AN ARRANGEMENT UNDER WHICH BOTH BA AND CAAC COULD CARRY ALL TYPES OF TRAFFIC WITH EVIDENT BENEFITS TO
THE TRAVELLING PUBLIC.
CONFIDENTIAL
/ 3. LU WAS
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