TNAG-0964-FCO40-1183-Air-services-between-the-UK-and-Hong-Kong-1980 — Page 96

ECRETARY OF STATE

SCOTLAND

АКК

AKIC 184/6

RECEIVED IN REGISTRY NO. 51 22 MAY 1980

The Rt Hon John NORSK MPFICER

Secretary of State for Trade Action Tak

Department of Trade

1 Victoria Street

LONDON

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SW1H

REGISTRY

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SCOTTISH OFFICE

WHITEHALL, LONDON

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15 May 1980

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Adam Thomson, Chairman of British Caledonian, has written to me seeking my support in connection with the appeal by Cathay Pacific which is at present before you against the granting by the CAA of a licence to British Caledonian for London-Hong Kong route.

The terms of his letter suggest that he feels that your Department may be unduly influenced by the political pressure being applied from Hong Kong, possibly by Cathay's commercial agreement and financial links with British Airways, and by Cathay's emphasis of the fact that their Boeing 747s use Rolls Royce engines. His object therefore is to balance this political pressure by pointing out the factors in British Caledonian's favour, namely their operation of 17 BAC 1-11 aircraft with Rolls Royce engines and, principally, their €12m investment in the Caledonian Airmotive facility at Prestwick for the overhaul of General Electric CF6 engines. He considers that the Hong Kong route is important, not only to British Caledonian, but to Caledonian Airmotive.

I would not normally seek to intervene in a matter like this, where Scottish ai services are not directly affected, but I should like you to know that, both from my Ministerial and constituency points of view, I have considerable sympathy with British Caledonian's case, and particularly the importance the route may have to the economies of the Caledonian Airmotive plant. This plant, which is to be opened by the Duke of Edinburgh on 14 July, is of considerable importance to the Prestwick area and to the future of Scotland's place in the aviation industry. I should think that Adam Thomson is probably right in seeing a connection between the Hong Kong licence and the Airmotive plant and I would not therefore wish to see its prospects threatened in any way. I know that you will consider the appeal objectively on its merits but I should not wish to see Adam Thomson's points go unheeded and I hope you will give them due weight.

I am sending a copy of this letter to Peter Carrington.

GEORGE YOUNGER