TNAG-1173-FCO40-1465-Future-of-Hong-Kong-special-study-by-FCO-for-the-Prime-Minis-1982 — Page 231

HONG KONG STUDY

ANNEX N

SECRETS

CIVIL AVIATION AND SHIPPING

Civil Aviation

Present Situation

1. Hong Kong's air services are managed within the colony

by the Hong Kong Civil Aviation Department, but international

air service relations and negotiations with other countries

for traffic rights at Hong Kong are dealt with by the

Department of Trade. The combination of Hong Kong with

London air traffic rights makes the UK a very powerful

negotiating party in bilateral bargaining for traffic rights.

2. At present two UK based airlines (British Airways (BA)

and British Caledonian (BCal)) and one Hong Kong based airline

(Cathay Pacific Airways (CPA)) operate a total of 20 weekly

services between Hong Kong and London. BA also have an

important interest in their service linking Hong Kong with

Tokyo and Johannesburg, and CPA have a large network of services

from Hong Kong to various points within South East Asia, the

Far East, Australasia and the Middle East and, from next year,

to points in Canada and Europe.

3. These airline operations give rise to substantial

benefits to the UK balance of payments current account in

the form of net overseas earnings secured by BA and BCal

SECRET

/and