TNAG-1962-FCO40-2794-Aviation-rights-in-Hong-Kong-for-Federal-Express-1989 — Page 8

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much more liable to damage by increased opportunities for US carriers at those airports. There should be no need to expose them to such damage to secure our Prestwick objectivę.

you we have heard reports that Federal Express would like increased opportunities in Hong Kong, especially for services to Japan, although we do not yet know how or whether the US will take this up in the negotiation. If they do, we will need to resist it, at least at next week's talks. Policy on air services between Hong Kong and other countries is determined by the Hong Kong Government. We await their views on these Federal Express ideas. But there is a history of strained US/Hong Kong aviation relations with US demands far exceeding anything wanted by Hong Kong; the ball is at present with the USG, who are supposed to be producing new and more moderate proposals. I think we can assume that Hong Kong will not agree that Federal Express should be able to open up a fast track around these on-going negotiations.

Anyway, it seems to me that if Federal Express are serious about

Prestwick, they will not abandon it because their Far East ambitions cannot be met at the same time.

I think that there is a good prospect of agreeing an expansion of US rights at Prestwick which would allow establishment of a hub there - so long as that is what the US wants. If they overreach themselves and insist on more, agreement may be harder to reach or may elude us but in that case I think that we would also have to doubt whether the US were serious in the expressions of interest in a Prestwick hub. You had suggested a meeting, but as I think our objective is the same that may not be necessary. No doubt your Private Secretary will let mine know if you would still like to meet.

Finally you refer to a point raised with you by Federal Express concerning the use at night of single engine, single pilot aircraft. I am advised that the CAA's refusal to allow such flights is based on the standards agred within the International Civil Aviation Organisation and reflected in

in the United Kingdom's Air Navigation Order. Faced with an engine failure on a single engined aircraft the pilot must be able to execute a safe forced landing and avoid populated areas. The CAA have discussed this issue with Federal Express on a number of occasions but have decided to maintain the current safety standard.

I am also copying this letter to the Prime Minister and to Douglas Hurd.

}

CECIL PARKINSON

CODE 18-77

DUNACM

Mr Halley, MAED

CONFIDENTIAL

Reference...

13.

FEDERAL EXPRESS

1. I attach a redraft of our reply to the Secretary of State for Scotland's letter of 9 November. I would be grateful for your comments by close of play on 23 November.

21 November 1989

cc: Ms Blaber, IAD/DTP

HKC184/20

NH 12

N Cannon

Hong Kong Department WH 303 270 2657

CONFIDENTIAL

12

CONFIDENTIAL

014756 MDHIAN 5195

CONFIDENTIAL

FM HONG KONG

TO IMMEDIATE FCO

TELNO 3824

OF 20034OZ NOVEMBER 89

INFO IMMEDIATE DTP

HKC184/20

DTP FOR IAD

IVH 12,

YRTELNO 2317 AND OUR TELNO 3766: FEDERAL EXPRESS

3789

1. WE WILL ENDEAVOUR TO LET YOU HAVE OUR COMMENTS QUICKLY BUT IT

WOULD BE ESPECIALLY HELPFUL TO HAVE AN IMMEDIATE RESPONSE TO PARA 3

OF OUR TUR.

2. MCMILLAN'S LETTER OF 8 NOVEMBER NOT YET ARRIVED. PLEASE FAX COPY

TO WAKELING (ESB). GRATEFUL ALSO FOR COPY OF S/S SCOTLAND'S

REPRESENTATIONS.

WILSON

YYYY

ΜΑΙΝ

72

DISTRIBUTION

72

AIR SERVICES

LIMITED

MAED

LEGAL ADVISERS

PUSD

HKD

NAD

PS/LORD BRABAZON

MR BAYNE

MR GILLMORE

MR SLATER

MR MCLAREN

MR FEARN

ADDTIONAL

IAD/DEPT TRANSPORT

INT AVIATION&TOURISM DIV CAA

NNNN

1

PAGE

CONFIDENTIAL