TNAG-0962-FCO40-1181-Possible-new-airport-for-Hong-Kong-1980 — Page 56

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G.F. 326

CONFIDENTIAL # 3

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(c) under the Chicago Convention air

traffic rights essentially derive

from sovereign territorial rights.

An airport in China would involve

transferring traffic rights from

HMG (and thus Hong Kong) to China

and the end of the Hong Kong-UK

cabotage route. The only way this

could be avoided would be by an

arrangement giving HMG sovereignty

over the site of the airport. It is

inconceivable that China would be

willing to concede sovereignty in

this way;

(a) while therefore an airport in China

might meet HK's needs in terms of

air transport (leaving aside the

possibility of disruption by political

or other disorder) and there would

be no difficulty in securing traffic

rights for UK and HK airlines there,

our present international bargaining

position based on landing rights

for other airlines in Hong Kong would

go. This would be serious for BA

but disastrous for CPA. CPA would

have to depend on what support CPG

was prepared to give it and in practice

it would have to become another

Chinese airline;

CONFIDENTIAL # 3