TNAG-0964-FCO40-1183-Air-services-between-the-UK-and-Hong-Kong-1980 — Page 83

History of CPA's decision to Purchase Aircraft

with Rolls Royce Engines

Annix E

(a)

At Mr. Heseltine's request, a meeting with the Chairman of the Swire Group took place on 31.1.74. Mr. Heseltine indicated "he was flabbergasted to be presented yesterday with the news that it (the decision to buy Douglas) was a fait accompli". Mr. Swire said "all things being equal CPA Board indeed all of us would have preferred an aircraft with a British component but that the balance of judgements was that all things were not equal

and the Board had to take what

they thought was the right commercial decision." On the way to one of my embarrassments is

-

the lift Mr. Heseltine said "

persuading the Chinese et al to buy British equipment in the face of the evidence that one of the most successful operators

British at that in the area has bought elsewhere."

(b)

On 21st February, Cathay's Chairman minuted all the Directors saying: "At the Board Meeting on 1.2.74. Management were authorised

Douglas

to sign

a Letter of Intent with

for the purchase of DC10 aircraft by end February 1974. Since that date we have been specifically requested by the U.K. Government to defer the signing of a Letter of Intent

to at least 8th March as a result of the U.K. election date."

He then sought (and obtained) the permission of each Director to defer any signing till 18th March.

(c) The D.T.I. minutes of a meeting with Cathay on 11th February specifically refer to the political consequences to the Minister if the decision were to be announced before

the General Election, and the desire to protect him from this by asking Cathay to delay the announcement.

(a) On 27th February 1974 the Chairman of the Swire Group met Sir Peter Thornton, the Permanent Secretary, Mr. Rogers and others at the D.T.I. Mr. Adrian Swire said "Cathay had been making commercial decisions about buying aircraft for over

.2/