TNAG-1176-FCO40-1478-Air-services-between-the-UK--China-and-Hong-Kong-1982 — Page 112

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CONFIDENTIAL

IMMEDIATE HONG KONG GOVERNOR

PEKIN

COPY IMMEDIATE PEKING W.

Your Tel 607: UK/PRC Air Services

We share the doubts expressed by Peking on the efficacy

of the course of action proposed in your tel 607.

However many times we review the 1979 arrangements our view

that Tianjin and Nanjing services cannot legitimately be

used to carry passengers to Peking and Shanghai and that we

are in consequence entitled to impose conditions on such

services, will not be accepted by CAAC unless we are

prepared to take firm effective action in support.

HK acce po!

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To embark on a review of the kind you have proposed without the

power to stop offending services or terminate the regional

CMU could only make the situation worse by leading to at least

de facto recognition of CAAC's position. With or without a

review, if we now concede 4 services to Tianjin and 3 to

Nanjing that is the end of any hope CPA may have of getting

services to Peking or improving their share of Shanghai traffic.

CAAC will simply continue to expand their Peking/Shanghai

services through these and other points. We should also be

giving up any hope that competition from CPA might improve the

standards of service, frequency and seat availability on

flights between Hong Kong and these important cities.

In such circumstances we could no longer consider ourselves

bound to ask BA to meet the undertaking given to your

predecessor to cease serving Peking via Hong Kong no later

than July 1983 in order to make room for Cathay Pacific.

There could be no certainty that Cathay would benefit from

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