TNAG-0868-FCO40-1078-Air-services-between-China--Hong-Kong-and-the-UK-1979 — Page 73

CR 460

CONFIDENTIAL

CONFIDENTIAL

180.

DESK BY

010OZ

FM F C 0 1517572 JUN 79

TO IMMEDIATE PEKING

TELEGRAM NUMBER 365 OF 15 JUNE

INFO HONG KONG

HEK184 DA

RECEIVED 1. REGISTRYNO. 51 19 JUN 1979

IND

по дать

REGIS

JK/CHINA AIR SERVICES

761

73A

YOUR TELNOS,593, 563 AND 564 AND HONG KONG TELNO 7917

Sed 181

(181)

198

1. WE HAVE CAREFULLY WEIGHED THE PROS AND CONS OF THE FOUR OPTIONS AND HAVE TAKEN INTO CONSIDERATION THE VIEWS OF THE HONG KONG GOVERN- MENT WE HAVE ALSO CONSULTED THE GOVERNOR, ON BALANCE WE HAVE DECIDED THAT THE TEAM SHOULD NEGOTIATE AN AGREEMENT BASED ON OPTION A WITH SUCH IMPROVEMENTS AT THE MARGIN AS THE TEAM IS ABLE TO OBTAIN (EG RESTRICTION ON CAAC'S FREQUENCIES BETWEEN PEKING AND HONG KONG FROM 6 TO 5 PARA 3(IV) OF TELNO 552) (166

*

2. WE UNDERSTAND HONG KONG'S RESERVATIONS REGARDING OPTION A PARTICULARLY PARA 11A OF HONG KONG TELNO 791. HOWEVER FOR THE 7REASONS IN YOUR TELNO 564 (WHICH WE ACCEPT), IT WOULD NOT BE REAS-

ONABLE TO EXPECT BA TO GIVE A COMMITMENT AT THIS STAGE TO COMING OFF HONG KONG - PEKING IN 2 YEARS' TIME. IT THERE WERE ANY PROSPECT THAT THE CHINESE WOULD ACCEPT A HONG KONG BASED CARRIER AT THE SAME TIME AS BA OPERATED ON THE SECTOR BUT WITHOUT ANY TRAFFIC RIGHTS WHATSOEVER ON THAT SECTOR, THEN WE THINK IT WOULD BE FAIR TO REQUIRE BA TO GIVE UP ALL THEIR HONG KONG-PEKING RIGHTS AFTER 3 YEARS AND FOR A HONG KONG BASED CARRIER TO COMMENCE OPERATIONS WITH FULL RIGHTS AND AT A CAPACITY FREQUENCY RATIO NOT LESS FAVOURABLE THAN ASATHE HONG KONG-PEKING ROUTE (TELNO 721 PARA 118). BUT IT SEEMS PRETTY

*

173A

CLEAR THAT THE CHINESE WOULD NOT NOW ACCEPT SIMULTANEOUS DUAL DESIGNATION. TO MEET THE CONCERNS IN HONG KONG TELNO 791 WE HAVE ACCORDINGLY SECURED BA'S AGREEMENT THAT BA QUIT THE HONG KONG-PEKING ROUTE ALTOGETHER FOUR YEARS AFTER THE AGREEMENT IS INITIALED, PROVIDED THIS TAKES PLACE WITHIN THE NEXT MONTH. THIS POINT SHOULD NOT, OF COURSE, APPEAR IN ANY AGREEMENT WITH THE CHINESE. WE WOULD STILL BE ABLE TO TRY FOR DUAL DESIGNATION ON THE HONG KONG-PEKING ROUTE AT THE FIRST FULL REVIEW, IF THERE SEEMED A CHANCE OF GETTING

CONFIDENTIA

/IT.