TNAG-0868-FCO40-1078-Air-services-between-China--Hong-Kong-and-the-UK-1979 — Page 55

CONFIDENTIAL

HOWEVER, HE THOUGHT IT WOULD BE QUOTE VERY DIFFICULT

QUOTE (AN EXPRESSION WHICH IN THE PAST HAS ALWAYS MEANT IMPOSSIBLE) IF CPA WERE TO OPERATE A SERVICE BETWEEN LONDON AND HONG KONG QUOTE SINCE THIS WOULD MEAN GIVING CATHAY PACIFIC IN EFFECT A ROUTE BETWEEN LONDON AND SHANGHAI WHICH THE CHINESE WERE REFUSING TO BA AT THIS STAGE AND WHICH WOULD NOT BE AVAILABLE TO CAAC UNQUOTE. ON THE OTHER HAND HE DID NOT THINK THAT A DECISION TO ALLOW BCAL OR LAKER TO COMPETE WITH BA ON THE LONDON-HONG KONG ROUTE (NEWS OF THE FORMAL APPLICATIONS FOR WHICH HAS FILTERED THROUGH TO US THROUGH AIRLINE CHANNELS) WOULD GIVE THE CHINESE ANY CAUSE FOR CONCERN.

8.

LU HAS NOT SO FAR REVERTED TO HIS SUGGESTION ABOUT A STATEMENT ON THE STATUS OF HONG KONG (PARA 4 OF MY TELNO 573 AND HONG KONG TELNO 833).

9. COMMENT. ALTHOUGH WE ARE KEERING UP THE PRESSURE, IT DOES NOT LOOK AS IF WE SHALL BE ABLE TO GET THE CONCESSIONS REFERRED TO IN PARAS 4 AND 5 ABOVE.

10. UNLESS WE CAN SHIFT THE CHINESE FROM THEIR PRESENT POSITION, THE ONLY WAY OUT OF THE TRAP REFERRED TO IN PARA 6 ABOVE THAT THE TEAM CAN NOW SEE IS TO ADD A RIDER TO THE ARRANGEMENT OUTLINED IN LINES 14 TO 17 OF PARA 2 OF YOUR TELNO 365 TO THE EFFECT THAT THIS ARRANGEMENT WOULD NOT

:

APPLY IF AT THE TIME BA'S TRUNK ROUTE CARRIAGE WERE STILL RESTRICTED TO LESS THAN THE FIGURE NEEDED FOR VIABLE OPERATION (ON PRESENT INFORMATION 230 SEATS PER FLIGHT FOR END-TO-END TRAFFIC, EXCLUDING INTERMEDIATE 3RDS AND 4THS, AND 5THS)

CRADOCK

FILES

MAED

FED

HK & GD LEGAL ADVS. MR. BUTLER MR. CORTAZZI MISS BROWN MR.MURRAY

:

3

CONFIDENTIAL