CONFIDENTIAL
GR 310
CONFIDENTIAL
FM PEKING 10083OZ NOV 82
TO PRIORITY F C O
TELNO 732 OF 10 NOVEMBER
AND TO DOT (FOR CAIR)
INFO HONG KONG.
AIR SERVICES
M
wp
1. HAVING HEARD THAT INTER-GOVERNMENTAL. TALKS WERE NOW UNLIKELY THIS YEAR, THE BA MANAGER HERE, EVANS, HAS BEEN IN TOUCH WITH CAAC ABOUT THE POSSIBILITY OF HOLDING INTER-AIRLINE TALKS BEFORE THE END OF THE YEAR. BA, AS YOU KNOW, ARE STILL SEEKING TRAFFIC RIGHTS ON THE HONG KONG/PEKING/HONG KONG LEG OF THEIR OPERATION. THEY HAVE MADE A PROPOSAL TO CAAC INVOLVING ATTRACTIVE ROYALTY PAYMENTS TO THEM IS RESPECT OF PASSENGERS CARRIED ON THIS SECTOR. IN ADDITION THEY APPARENTLY SUGGESTED THAT INCREASED OPERATING PERMITS ON THE TIANJIN/HONG KONG SECTOR COULD BE THROWN IN AS AN ADDITIONAL (NEXT THREE WORDS UNDERLINED) QUID PR QUO. EVANS ADMITTED THAT THIS WAS ONLY AN IDEA OF BA'S, FOR WHICH THEY HAD NO GOVERNMENT AUTHORITY.
2. LU RUILING IN REPLY AGAIN RAISED THE POSSIBILITY OF BRITISH AIRWAYS TAKING OVER THE HONG KONG/SHANGHAI SECTOR. HE WAS TOLD FIRMLY THAT THIS WAS NOT ON. TO EVANS' SURPRISE, HE THEN SAID THAT THERE WAS A BASIS FOR TAKING ABOUT THE PEKING/HONG KONG SECTOR JUST ON THE STRENGTH OF THE ROYALTIES PROPOSAL COUPLED WITH THE TIANJIN SUGGESTION. HOWEVER, QUOTE INTER-GOVERNMENTAL TALKS SHOULD BE HELD BEFORE THE END OF THE YEAR, AND PREFERABLY BEFORE THE END OF THE MONTH UNQUOTE. HE WOULD BE GETTING IN TOUCH WITH THE BRITISH EMBASSY ABOUT THIS.
3. EVANS IS AS MYSTIFIED AS WE ARE BY THIS APPARENT CHANGE OF ATTITUDE. IT IS DIFFICULT TO BELIEVE CAAC REALLY WISH TO TRADE RIGHTS ON THE HONG KONG/PEKING SECTOR FOR AN INCREASE IN FLIGHTS TO TIANJIN. WE SHALL SEE IF LU DOES APPROACH US, AND IF SO HOW HE EXPLAINS THE VOLTE FACE. MEANWHILE, IT WOULD BE USEFUL TO BE ARMED WITH INSTRUCTIONS IN RESPONCE TO MY TELNO 710.
CRADOCK
[COPIES SENT TO TAT/DOT]
LIMITED
MAED
НК
GD
FED
MR ADAMS
MR DONALD MR URE
THIS TELEGRAM
WAS NOT
ADVANCED
CONFIDENTIAL
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CODE 18-78
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