TNAG-1962-FCO40-2794-Aviation-rights-in-Hong-Kong-for-Federal-Express-1989 — Page 16

SECRETARY

FOR

CONFIDENTIAL

OF STATE

HKC184/20

SCOTLAND

The Rt Hon Cecil Parkinson MP Secretary of State for Transport Department of Transport

2 Marsham Street LONDON

SWE1P 3EB

Dear bil

NH

The Paul, HK

I can't

see

respindy wick

R+P.A

NC 1/11

SCOTTISH OFFICE

WHITEHALL, LONDON SWIA 2AU

НК

entusian to the idea of goz the- Taxon yuls to the salern

9

MAFS Advice faction please.

fraghe quand Prostarch

FEDERAL EXPRESS : PRESTWICK AIRPORT PROJECT

PS / Lord Brabazon SS/M Mande dr state

9 November 1989 M Mclare

MKD

13

ы

As you may be aware, my officials have been pursuing discussions with Federal Express following your meeting with Fred Smith on 8 September and my own contact with him thereafter.

Following a major presentation to the company on 30 October it is clear that the company is extremely well disposed to the establishment of a European 'hub' at Prestwick. However, it is also clear that Shannon and Brussels are important competitors for the project and that

that Federal Express regards the achievement of further fifth freedom traffic rights as the key to a decision in favour of Prestwick.

As I understand it, the company has

the company has two crucial requirements: an extension of US-European rights, including an increase in the number of US cities from which it can fly, and additional routes within Europe, including the UK's and rights from Hong Kong to Japan. I am told that a number of proposals in relation to US-European rights have been tabled for discussion during the Air Service Agreement negotations in which your Department will be closely involved at the end of this month. So far as Hong Kong is concerned, I gather that certain proposals have recently been considered, but that these will not be on the agenda for the forthcoming talks. Federal Express have stressed that Hong Kong rights are particularly significant in the global freight service of which a Prestwick hub would form a key part.

Federal Express has indicated that its initial investment at Prestwick - if the project goes ahead - would be in the order of $13 million, with plans for the creation of 200 jobs. In the longer term the company is forecasting investment rising to $30 million, and around 400 jobs.

I need hardly emphasise the importance I attach to securing this project for Prestwick, in the context both of our review of Scottish Lowlands Airport policy and of our efforts to attract inward investment to Scotland from the United States, notably in the electronics sector. A number of our existing US companies in Scotland have indicated their support for a Federal Express presence at Prestwick, and a number of others with

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