TNAG-0963-FCO40-1182-Air-services-between-China--Hong-Kong-and-the-UK-1980 — Page 35

Reference...

13

Mr Morrice

2%3

HKL 184/2

DYNO. ST

CONFIDENTIAL

RELLIVED HER

1 1 MAR 1980

DESK OFFICER

INDEX

PA

Mr Williamson 11.3 see oncileaf.

VISIT TO HONG KONG: AIR SERVICES

no 18123 12

During my visit I discussed this with Mr Jeaffreson, Director of Economic Services.

1.

UK/China

2. We agreed that not much could be done. before the meeting between CAAC and British Airways on 10 March. Hong Kong were of course concerned about the possibility of the Chinese attempting to refuse CPA the right to conduct regional services if they were awarded the Hong Kong/UK route. Nevertheless they seemed reasonably optimistic about getting round this by reviving a subsidiary company with another name.

3. I mentioned the Department of Trade's feeling that it should be necessary to take a tougher line with the Chinese on regional charter flights to Hong Kong if there were difficulties over the main ASA. Mr Jeaffreson said that they would be very reluctant to do this. It could create problems for general Hong Kong relations with China. Hong Kong still did not feel that they had done well out of the regional ASA. I said that however that might be there was no advantage for either side in seeing a breakdown of the ASA and it was in the interests both of the Hong Kong and the UK Governments to work out a common line. It was very important not ot take up hard positions on this and to keep in touch. Mr Jeaffreson accepted that.

We may

(Comment: Hong Kong are clearly touchy on this issue. need to be firm with them at some stage. (The Political Adviser agrees).

However, a good deal can probably be achieved by handling Hong Kong carefully and building on the good personal relations which have now been built up between Hong Kong and the DOT. The more than can be done to make them see that this is a matter of common interest and not UK against Hong Kong, the better).

Hong Kong/UK

4.

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see

HKK18416

There was considerable optimism that the CAA would give CPA an exclusive licence for the route but it was clearly expected that in that case both BCAL and Laker would appeal to the Secretary of State for Trade and possibly also institute action in the courts on the basis of the discriminatory clause in Section 3 of the Civil Aviation Act. Nevertheless if CPA do get a favourable verdict from CAA they are likely to start services as soon as possible.

Pacific route

5. Hong Kong referred to the Laker application for a route from the West Coast of the United States to Hong Kong. During his recent visit, Mr Nott had made a strong plea on Laker's behalf. Hong Kong understood this but nevertheless would possibly have to make their

/own

CODE 18-77

CONFIDENTIAL