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of Dragonair from Hong Kong (where it is struggling) to Macao. The Governor told me he thought there might be some advantage for Macao in the Hong Kong Government's delay in responding to the proposal to build a new airport in Hong Kong. If the Macao airport could be made operational by 1993, its opening might coincide with a very crowded situation at Kai Tak. Perhaps Macao could cream off some of the tourist charters. Interestingly this might be quite welcome to those in Hong Kong who would like Kai Tak retained in service for as long as possible. Michael Miles, the Managing Director of Cathay, said as much when I talked to him last week. He said the tourist end of the market was not very profitable and to lose some of this traffic to Macao might be acceptable if it made life easier at Kai Tak.
6.
I have not included all this information in the market pointer of course, but it may be useful to you in assessing the strength of your advice to British companies. My own assessment is that a decision to go ahead with the airport may not depend entirely on economic viability. There will be a political dimension. Stanley Ho, who is committed under his gambling concession to contribute about £20m, reckons there is an 80% chance of it being built.
Your ever.
RE Holloway
REH/eb
att
Reg
cc Hong Kong Department, FCO
Far Eastern Department, FOO
Southern European Department, FCO Chancery, Lisbon
Chancery, Peking
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