TNAG-0870-FCO40-1080-Air-services-between-Hong-Kong-and-the-UK-1979 — Page 154

CONFIDENTIAL

8

HKED ®

Foreign and Commonwealth Office

London SWIA 2AH

See (10)

JR Steele Esq Department of Trade

1 Victoria St London SW1

13 June 197

HKK 184/5.

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DESK OFFICER

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Thank you for your letter of 8 June about air services to Hong Kong and for letting me know your Minister's reaction to your submission.

1.

2.

So far as the substance of the question is concerned our view is that CPA should be given the chance to compete on the London route. The continuation of the BA monopoly seems to me unjustifiable. The Hong Kong travelling public are entitled to an efficient and punctual service. This they have not been getting. BA have been given every opportunity to improve their service and have repeatedly promised to do so. Yet it continues to be inadequate. A competitor or competitors would be likely to provide a better service and at the same time spur BA into making improvements. CPA is not of course the only possible competitor and I understand BCAL have now formally applied for the route. If we take our responsibilities towards Hong Kong seriously we must however recognise that CPA has a natural right to the route and I believe it would be unnecessarily damaging to our relations with Hong Kong for us to continue to deny CPA the opportunity to show they can compete effectively. The removal of this particular grievance would also make it easier for Hong Kong to accept any sacrifices they may have to make in the contents of air agreements with Malaysia and China, and indeed in future.

3. The best procedure for achieving this end is largely a matter for your Department. Our concern is that it should not lead to a confrontation with Hong Kong or deny them a fair opportunity to make their case. We would therefore be happy with the procedure put forward in your submission of 29 May which would allow direct discussions with the Hong Kong Government to continue. I agree there could be disadvantages in simply leaving the matter to the CAA. But if it were decided to do that it would be important to reassure the Hong Kong Government that CPA would be given the same consideration as any British airline despite the wording of the Civil Aviation Act 1971.

Is there any way in which this could be arranged in formally, perhaps with the agreement of the British airlines? Although I recognise their

/opposition to

CONFIDENTIAL