CONFIDENTIAL
115233 MDLIAN 8771
TAKE A FIRM LINE BY FREEZING THE EXISTING LEVEL OF SERVICES AND REJECTING CAAC'S APPLICATIONS FOR NEW ROUTES AND ADDITIONAL CAPACITY.
4. RECENT INDICATIONS SEEM TO SUGGEST THAT THAT OUR STRATEGY IS
BEGINNING TO HAVE SOME IMPACT ON THE CHINESE. THE MAYOR OF NINGBO, WHO IS KEEN TO ESTABLISH AIR LINKS BETWEEN NINGBO AND HONG KONG, CAME TO HONG KONG LAST MONTH AND HELD A MEETING WITH DRAGONAIR. HE WAS FULLY AWARE OF HONG KONG'S DIFFICULTIES AND WAS CONFIDENT THAT HE WOULD BE ABLE TO SOFTEN UP CAAC SO THAT BOTH DRAGONAIR AND CHINA EASTERN COULD OPERATE THE NEW NINGBO/HONG KONG ROUTE. ON THE SHANTOU ROUTE, THE HEAD OF THE TOURISM BUREAU OF SHANTOU HAS RECENTLY APPROACHED DRAGONAIR TO EXPLORE THE POSSIBILITY OF CHARTERING DRAGONAIR AIRCRAFT TO MAKE AVAILABLE ADDITIONAL CAPACITY TO MEET GROWING DEMAND (THE LOAD FACTOR OF THE EXISTING DAILY SERVICE OPERATED BY CAAC GUANGZHOU BUREAU IS OVER 90 PER CENT). ALTHOUGH WE HAVE NOT YET RECEIVED ANY POSITIVE RESPONSE FROM CAAC YET, WE BELIEVE THAT CAAC IS UNDER INCREASING PRESSURE FROM THE AFFECTED PROVINCIAL AND MUNICIPAL AUTHORITIES TO ADOPT A LESS RIGID ATTITUDE TOWARDS HONG KONG.
5. DRAGONAIR (HEALE AND HUI) WILL VISIT PEKING NEXT WEEK AND CALL ON CAAC TO DISCUSS, INTER ALIA, DRAGONAIR'S APPLICATIONS FOR NEW NON-SCHEDULED ROUTES. WE WILL KEEP YOU AND PEKING POSTED OF DEVELOPMENTS. LIKE YOU, WE DO NOT ENVISAGE NON-SCHEDULED SERVICES BEING RAISED FOR DISCUSSION AT THE FORTHCOMING UK/PRC TALKS.
WILSON
YYYY
ΜΑΙΝ
37
DISTRIBUTION
45
AIR SERVICES
PS/MR LENNOX-BOYD
LIMITED
MR BAYNE
AMD
MR MCLAREN
LEGAL ADVISERS
MR SLATER
HKD
MR BURNS
FED
2
PAGE
CONFIDENTIAL
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Page 30Page 31
RESTRICTED
FM HONG KONG
TO PRIORITY FCO
TELNO 3503
OF 26082OZ NOVEMBER 90
INFO PRIORITY SINGAPORE
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