TNAG-1176-FCO40-1478-Air-services-between-the-UK--China-and-Hong-Kong-1982 — Page 65

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CONFIDENTIAL

Reference

HKK 184/1

39

H0 $219 Thank you

Mr Hoare

MY

Mr Cft

24/7 HICK 184/1

M. McQuaite to ou

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24/9

UK/CHINA AIR SERVICES

A

attackenz.

B C

2.

*

3.

V

Mr Clift's query on Hong Kong telno 1076 refers.

Plan 5/10

Peking telno 495 and FCO telno 750 give further background.

Briefly, CAAC have told DOT they want to reduce some of their regional services for the winter season wef 1 November. Specifically: omit Nanking, and reduce CAAC's flights on the Shanghai, Tientsin and (after 30 November) Canton routes.

4.

Before responding to CAAC's request DOT have asked

Hong Kong for their and CPA's views.

5.

Although HK and CPA agree that there probably is some decline in demand on some routes during the winter, they do not think the capacity proposed by CAAC, particularly on the Shanghai route, will satisfy demand.

6.

In addition to the commercial reasons given in paras 2- 6 of HK telno 1076, HK believe that CAAC's proposals should be opposed on tactical grounds as well, as there is a suspicion that the CAAC are trying to remove CPA from the HK-Shanghai route altogether. Neither HK nor CPA are keen to concede anything

7.

As I mentioned recently, the DOT have proposed talks with CAAC commencing 15 November. They hope that CAAC will agree to extend Summer schedules at least until the talks have taken place. (The reason for the delay in the talks the Chinese proposed August or early September - is partly because of the PM's visit, but also because the DOT wanted to force CAAC to show its hand in filing its winter schedules).

I will keep you informed of any significant developments.

8.

сба

CODE 18-77

24 September 1982

W Morris

CONFIDENTIAL

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