TNAG-0869-FCO40-1079-Air-services-between-China--Hong-Kong-and-the-UK-1979 — Page 51

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CONFIDENTIAL

FM FCO 131825Z SEP 79

TO PRIORITY OTTAWA

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See asi

TELEGRAM NUMBER 302 OF 18 SEPTEMBER

HKK 184/5

2 1 SEP 1979

OFFICER

INDEX

INFO FOUTINE HONG KONG (FOR GOVERNOR AND ECARFE)

IRLOUR TELNO 278: TRANSFER OF AIR SERVICES TO GATWICK

1. IT NOW SEEMS LIKELY THAT WE SHALL BE ABLE TO AVOID TAKING STEPS TO COMPEL AIR CANADA (AND ERITISH AIRWAYS) TO TRANSFER ALL OR PART OF THE IR SCHEDULED CANADIAN SERVICES FROM HEATHROW TO GATWICK. BRITISH AIRWAYS, WHO WERE CONCERNED TO AVOID TRANSFER OF CANADIAN SERVICES, OFFERED TO TRANSFER THE IR SPANISH AND PORTUGUESE SERVICES UNILATERALLY TO GATWICK. MINISTERS CONCLUDED THAT THIS OFFER WAS SUFFICIENT TO DEAL WITH THE MOST PRESSING AIRPORTS PROBLEMS, AND THAT IT SHOULD BE ACCEPTED PROVIDED WE GOT CERTA IN GUARANTEES FROM SPAIN (AND IN DUE COURSE PORTUGAL) THAT ANY INCREASE IN THE IR CAPCITY ABOVE CURRENT LIMITS WOULD USE GATWICK AND NOT HEATHROW

2. WE HOPE TO RECEIVE WITHIN THE NEXT FEW DAYS ASSURANCES FROM THE SPANISH AUTHORITIES IN TERMS WHICH WILL ENABLE US TO ASK YOU TO NOTIFY THE CANADIANS FORMALLY THAT WE SHALL NOT REPEAT NOT REQUIRE A TRANSFER OF ANY OF AIR CANADA'S SCHEDULED OPERATIONS AT HEATHROW. THE NEW POLICY WOULD BE PRESENTED AS THE OUTCOME OF A FUNDAMENTAL REVIEW BY THE INCOMING CONSERVATIVE ADMINISTRATION OF THE IR PREDECESSORS' APPROACH WHICH TOOK ACCOUNT OF REPRESENTATIONS MADE TO US BY BOTH THE PRESENT AND PREVIOUS CANADIAN ADMINISTRATIONS. OUR APPROACH TO THE ASPANIARDS IS UNLIKELY TO REMAIN LONG A SECRET FROM THE CANADIANS. SUBJECT TO YOUR VIEWS, WE SEE ADVANTAGE IN MAKING AN EARLY APPROACH TO THE CANADIAN AUTHORITIES AT A HIGH LEVEL (PERHAPS TO THE MINISTER FOR EXTERNAL AFFAIRS), AND LINKING OUR DECISION ON TRANSFERS TO GATWICK WITH OUR WISH TO RENEW NEGOTIATIONS AS SOON AS POSSIBLE FOR THE ADDITION OF WESTERN CANADIAN POINTS TO UK NORTH ATLANTIC ROUTES AND FOR A ROUTE LINKING HONG KONG WITH WESTERN CANADA. PROPOSALS FOR CLOSER LINKS BETWEEN WESTERN CANADA AND BRITAIN (AND HONG KONG ) SHOULD HAVE SOME APPEAL TO THE CLARK ADMINISTRATION,

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OUR PRESENT