CONFIDENTIAL
GR 289
CONFIDENTIAL
FM PEKING 230939Z JUL 79
TO IMMEDIATE FCO
TELEGRAM NUMBER 650 OF 23 JULY 79
INFO IMMEDIATE HONG KONG
Her 184/2
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PANK
2 4 JUL 1979
스
a
7
DESKBY FCO 231230Z
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HONG KONG TELNO 1037:
UK/PRC AIR SERVICES NEGOTIATIONS
LIU
1. IT MUST BE A MATTER OF JUDGEMENT WHETHER WE CONTINUE TO PERSIST WITH OPTION A ON THE TERMS AVAILABLE OR REVERT NOW TO OPTION C. I SEE NO ADVANTAGE IN REPEATING OLD ARGUMENTS. BUT THE FALLACY WHICH I SEE IN HONG KONG'S ARGUMENTS IN PARA 3 OF THEIR TUR IS THAT, WHILE THE CHINESE HAVE MADE NO SECRET OF THEIR PREFERENCE FOR A REVERSION TO OPTION C, THEY HAVE GIVEN NO HINT THAT THEY WOULD OFFER ANY MATERIAL IMPROVEMENT ON THE REGIONAL ARRANGEMENTS IF WE WERE TO OPT FOR THAT COURSE. RATHER WE BELIEVE THAT THEY WOULD USE THE CHARTER DEVICE TO GET WHAT THEY WANT WITHOUT GIVING ANYTHING AWAY.
2. THE DESIGNATION RESTRICTION IN PARA 4 (B) OF TUR IS IMPORTANT ONLY TO CATHAY, AND WE SEE NO REASON WHATEVER FOR THE CHINESE TO TAKE A DIFFERENT VIEW ON A HONG KONG-BASED AIRLINE OPERATING BOTH LONDON/HONG KONG AND REGIONAL ROUTES IF THE REGIONAL ARRANGEMENTS WERE PURSUED SEPARATELY. AND IF CPA WERE ALLOWED TO OPERATE LONDON/HONG KONG I DO NOT SEE THAT A SEPARATE AIRLINE ALLIED TO THEM (WHICH COULD ADOPT ONE OF THE FORMS IN PARA 11 OF MY TELNO 655) WOULD IN PRACTICE BE ANY MORE DIFFICULT TO ESTABLISH THAN A SUBSIDIARY. THE GATWICK POINT (PARA 4(A) OF TUR) HARDLY SEEM LIKELY TO IMPOSE DELAY IN PRACTICE.
CONFIDENTIAL
13. I DO NOT
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