CONFIDENTIAL
airline any particular share of Peking traffic, even when Hong Kong was no longer used as a point on the trunk route. In any case Mr Stevens pointed out that no decision on the London-Hong Kong-Peking route had yet been reached by BA, and he could not justify requiring BA to cease routeing their service via Hong Kong, at considerable additional cost, if he could not be sure that BA's loss would be Cathay's gain.
Mr Sproat thanked the Governor for the opportunity to discuss this difficult issue, and agreed that matters could not be taken further at this stage; the different points of view would have to be reflected in the air services brief for the Prime Minister's visit, and resolved in the light of that visit in time for the next round of air services talks currently scheduled for the last week of October.
Ruth Recompre
2217182
Distribution:-
PS/Secretary of State PS/Secretary
Mr Knighton
Mr Roberts
CAIR
Mr Stevens
CAIR1
Mr Muir
OT4
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