TNAG-1962-FCO40-2794-Aviation-rights-in-Hong-Kong-for-Federal-Express-1989 — Page 23

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144135 MDLIAN 1140

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FM HONG KONG

TO PRIORITY FCO

TELNO 3075

OF 18063OZ SEPTEMBER 89

€184| HKC184 20

INFO PRIORITY DEPT OF TRANSPORT

DTP FOR IAD

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YOUR TELNO 1873. RIGHTS

NC 15/1

FEDERAL EXPRESS INTEREST IN JAPAN: HONG KONG

IT SEEMS THAT NOW THEY HAVE ABSORBED FLYING TIGERS, FEDERAL EXPRESS ARE INTENT ON CONTINUING THE FORMER'S LONG STANDING BATTLE FOR THE REINSTATEMENT OF JAPAN: HONG KONG FIFTH FREEDOM TRAFFIC RIGHTS WHICH WERE SURRENDERED BY THE USG DURING THE NEGOTIATION OF BERMUDA.

2. HOWEVER, YOU WILL BE AWARE THAT SUCH RIGHTS BELONG TO THE HONG KONG GOVERNMENT AND NOT TO CATHAY PACIFIC AIRWAYS (CPA). IF THERE IS ANY SUGGESTION THAT MR SMITH HAS BEEN ENCOURAGED BY THE DEPARTMENT OF TRANSPORT TO APPROACH CPA, THEN WE MIGHT WELL BE SEVERELY CRITICISED BY EITHER AIR HONG KONG, WHO WERE RECENTLY DESIGNATED FOR ALL-CARGO SERVICES BETWEEN HONG KONG AND JAPAN (YOUR TELNO 599) AND/OR HONG KONG DRAGONAIR, WHO ARE ACTIVELY SEEKING TO EXPAND THEIR SCHEDULED SERVICES IN THE HONG KONG: JAPAN MARKET (SEE FOR E.G. OUR TELNO 2512) AND WHO MAY BE RELYING ON BELLY-HOLD CARGO TO MAKE A CONTRIBUTION TO THE ECONOMICS OF THEIR HOPED FOR FUTURE OPERATIONS.

3. THEREFORE, AGAINST THE POSSIBILITY THAT WE MAY BE CALLED UPON TO GIVE UNEQUIVOCAL ASSURANCES TO ONE OR MORE OF OUR AIRLINES, GRATEFUL YOUR CONFIRMATION THAT:-

(A) THE PROPOSAL TO APPROACH CPA CAME FROM SMITH AND NOT FROM THE SECRETARY OF STATE OF TRANSPORT OR HIS OFFICIALS:

(B)

SMITH WAS TOLD BY DTP THAT IT WAS NOT IN CPA'S GIFT TO CONCEDE HK:JAPAN RIGHTS: AND

(C)

IN KEEPING WITH NORMAL PRACTICE, SMITH WAS TOLD TO PUT HIS REQUEST TO THE USG.

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