TNAG-1157-FCO40-1437-Visits-by-FCO-Ministers-to-Hong-Kong-1982 — Page 109

CONFIDENTIAL

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framework of the CMU. In particular, we should seek increased

services for CPA to Shanghai, in line with market growth, and

local rights for BA between Hong Kong and Peking in exchange for

additional services on the same routes by CAAC.

4.

The Hong Kong Government raised with Mr Sproat on his

visit to Hong Kong in July the case for terminating BA's

exemption from the requirements of the Hong Kong Air Transport Licensing Authority. All other airlines, whether Hong Kong, UK

or foreign based, have to apply for a licence to serve Hong

Kong: BA do not. When the matter was last considered in 1981 it

was decided after reference to the Prime Minister that the

balance of argument favoured retention of the exemption. DOT Ministers are considering whether there is anything in Hong Kong's latest case which would justify reversing that decision.

Hong Kong and General Department

November 1982

CONFIDENTIAL