SECRET
PP PEKING
GRS 760
SECRET
FM FCO 10 17 152 DECEMBER 82
TO PRIORITY PEKING
TELEGRAM NUMBER 594 OF 10 DECEMBER
INFO SAVING HONG KONG.
UK/PRC AIR SERVICES
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1.
TALKS TOOK PLACE BETWEEN 7 AND 10 DECEMBER BUT CONCLUDED
WITHOUT SIGNIFICANT RESULT. THE TWO SIDES AGREED THEY WOULD MEET
AGAIN IN PEKING BEFORE THE SUMMER 1983 OPERATING PERIOD BUT DATES
ARE TO BE SETTLED THROUGH THE EMBASSY. IN THE MEANTIME CPA ARE
TO EXPLORE WITH CAAC THE SCOPE FOR A HONG KONG BASED AIRLINE TO
OPERATE SERVICES TO PEKING AFTER BA CEASE TO ROUTE THEIR LONDON/
PEKING SERVICES OVER HONG KONG. CPA WILL ALSO BE DISCUSSING NEW
POOL ARRANGEMENTS WHICH MIGHT COMPENSATE CAAC IF THEY AGAIN
CARRIED MORE THAN ONE THIRD OF THE PASSENGERS BETWEEN HONG KONG
AND SHANGHAI. BA SIGNED A NEW POOL AGREEMENT WITH CAAC BUT
WITHDREW ALL OFFERS RELATING TO IMPROVED RIGHTS BETWEEN HONG KONG
AND PEKING. WITH THE CONSENT OF BOTH SIDES THERE WAS NO AGREED
RECORD. OUR OWN RECORD WILL FOLLOW BY BAG.
2.
THE TALKS CONSISTED ALMOST ENTIRELY OF A REPETITION OF
FAMILIAR ARGUMENTS. STATISTICS WERE EXCHANGED ON RECENT TRAFFIC
LEVELS BETWEEN HONG KONG AND CHINA. THE UK MAINTAINED THAT THESE
DEMONSTRATED THE NEED FOR SUBSTANTIAL INCREASES IN CAPACITY BET-
WEEN HONG KONG AND SHANGHAI AND BETWEEN HONG KONG AND PEKING
BECAUSE OF HIGH SEAT FACTORS ON DIRECT SCHEDULED SERVICES, LARGE
AMOUNTS OF TRAFFIC CARRIED ON CHARTERS AND EXTRA SECTIONS, AND THE LARGE NUMBERS OF PASSENGERS TRAVELLING ON INDIRECT ROUTINGS VIA
TIANJIN, CANTON AND ELSEWHERE. THE CHINESE WOULD NOT ACCEPT THAT
ANY ADDITIONAL CAPACITY WAS NEEDED ON EITHER SECTOR. THEY
INSISTED THAT THE CURRENT WINTER CAPACITY SHOULD BE SUFFICIENT
FOR NEXT SUMMER. IN THEIR VIEW, SINCE AIRCRAFT WERE FLYING WITH
EMPTY SEATS IT FOLLOWED THAT CAPACITY WAS ALREADY EXCESSIVE.
THEY
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