TNAG-0938-FCO40-1157-Visit-of-John-Nott--Secretary-of-State-for-Trade--to-Hong-Ko-1980 — Page 71

BRIEF 9

BRIEF FOR MINISTER FOR TRADE'S VISIT TO HONG KONG

30 AUGUST 5 SEPTEMBER 1980

4

UK/PRC AIR SERVICES

POINTS TO MAKE (if raised)

1 Welcome agreement between British Airways and CAAC, the Chinese airline, which allows BA to commence a weekly service between London and Peking via Hong Kong on 5 November.

2 Hope that the Chinese will agree to UK proposals so that services between Hong Kong and Shanghai can be resumed as early as possible.

BACKGROUND POINTS

3

The UK and PRC signed an Air Services Agreement in November 1979 which permitted scheduled air services between London and Peking and between Hong Kong and certain Chinese cities.

4 After prolonged and difficult negotiations with CAAC, BA have reached a commercial agreement providing for each airline to operate once weekly. BA will extend an existing Hong Kong service, but are strictly limited as to the traffic which they can carry between Hong Kong and Peking.

5 Cathay Pacific Airways (CPA) and CAAC started services between Hong Kong and Shanghai on 21 June. The services terminated on

16 August, because the Chinese refused to allow CPA (or its subsidiary company) to operate the service at a time when CPA had commenced service to London, on the ground that this gave the UK a second through trunk route.

- 6 We now await the Chinese reply to our proposal that the UK

carrier should be a reconstituted version of the CPA subsidiary, in which CPA would not have the controlling interest.