CONFIDENTIAL
THAT CATHAY CHANGED THE DECISION OF THEIR BOARD SO AS TO BUY ROLLS ROYCE ENGINED PLANES RATHER THAN THE AMERICAN ENGINED AIRCRAFT MANUFACTURED BY DOUGLAS.
A SUMMARY OF THIS EPISODE IS AT ANNEXURE E.
IT IS CLEAR THAT CATHAY, OUT OF LOYALTY TO BRITAIN, AGREED TO CHANGE A FINALISED DECISION AT THE REQUEST OF THE MINISTER AND OFFICIALS AT THE D.T.1. WHO ALSO ASKED CATHAY TO DELAY ANY ANNOUNCEMENT ADVERSE TO ROLLS ROYCE UNTIL AFTER THE GENERAL ELECTION WHICH WAS IMMINENT. IT IS IN HMG'S INTERESTS THAT NOTHING
SHOULD EMERGE ABOUT THIS BUT NO ONE IS IN A POSITION TO CONTROL WHAT OTHERS MAY CHOOSE TO REVEAL.
IN ANY EVENT IT WOULD APPEAR TOTALLY UNJUST THAT CATHAY SHOULD BE PREVENTED FROM FLYING UPON THE HONG KONG/LONDON ROUTE AS A DIRECT RESULT OF A DECISION TAKEN AT THE EXPRESS REQUEST NOT ONLY OF THE BRITISH GOVERNMENT BUT OF THE VERY DEPARTMENT WHICH CONTROLS AIR LICENSING. IT IS AN ODD IRONY THAT IN 1974 BCAL· RESISTED SIMILAR PRESSURE AND IN FACT BOUGHT DC1ØS.
RECIPROCITY
POLITICALLY, IT IS IMPOSSIBLE TO EXPLAIN TO THE PUBLIC IN HONG KONG WHY THE UNITED KINGDOM SHOULD ALLOW SINGAPORE AND OTHER
ASIAN NATIONS THE RIGHT TO FLY TO LONDON ON A RECIPROCAL BASIS WHILST AT THE SAME TIME DENYING THE HONG KONG AIRLINE, CATHAY, THE SAME PRIVILEGE. IT IS SEEN BY LOCAL PEOPLE AS CYNICAL EXPLOITATION OF HONG KONG'S STATUS AS A COLONY BY THE PARENT COUNTRY. THIS, POLITICALLY, IS A MOST UNFORTUNATE IMPRESSION TO REVIVE AND HAVE VOCIFEROUSLY EXPRESSED.
VALUE OF HONG KONG TRAFFIC RIGHTS
IT IS WELL KNOWN TO THE PEOPLE OF HONG KONG THAT OVER THE PAST DECADES BRITISH AIRWAYS HAVE BENEFITTED SUBSTANTIALLY FROM THE GRANTING OF TRAFFIC RIGHTS TO FOREIGN CARRIERS TO SERVE HONG KONG. THEY CONTRAST THIS WITH THE PRESENT DECISION BY THE CAA WHICH HAS PREVENTED THE HONG KONG AIRLINE FROM PARTICIPATION ON A CABOTAGE ROUTE TO WHICH IT IS CLEARLY ENTITLED IN THEIR OPINION. THE FORMER POSITION WAS JUST SUPPORTABLE: BUT THE PRESENT POSITION WITH A U.K. – BASED DUOPOLY ON THE ROUTE, IS NOT. AN ADDITIONAL POINT IS THAT CPA HAS SUFFERED IN TERMS OF TRAFFIC RIGHTS IN THE EAST ASIAN REGION (SINGAPORE, MALAYSIA AND CHINA FOR INSTANCE) SO THAT B.A. CAN BENEFIT.
IT IS ALSO TO BE NOTED THAT HONG KONG IS UNIQUE AMONG DEPENDENT TERRITORIES IN HAVING A MAJOR AIRLINE OF ITS OWN AND AN ECONOMY SUFFICIENTLY DEVELOPED TO GENERATE A SUBSTANTIAL PROPORTION OF THE TRAFFIC ON THE ROUTE. IT IS VERY DOUBTFUL IF SUCH A SITUATION
WAS IN MIND WHEN THE CIVIL AVIATION ACT 1971 WAS ENACTED.
3 CONFIDENTIAL
/THE
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