TNAG-2480-FCO40-3610-Business-matters-in-Hong-Kong-Swire-Group-1992 — Page 46

Background

References:

CONFIDENTIAL

A: DTP background note on Cathay Pacific

B: Exchange of letters between Sir Adrian Swire and the

Prime Minister

Aircraft Orders

1.

Cathay Pacific is a major customer for the UK aerospace industry. The airline have an all Rolls-Royce powered fleet. The airline is considering currently whether to purchase the Boeing 777 or the Airbus A330. Both airframes,

especially the Airbus, have major UK content. Both could be

powered by Rolls-Royce engines.

2. The Rolls-Royce Trent engine is, currently, under very

expensive development and its future (together with that of

the company in its present form) is dependent on winning major orders such as this one. A contract from Cathay would

also help overcome the marketing problems created by British Airways' decision not to choose the engine.

3. A recent letter from the Prime Minister to Sir Adrian

Swire includes a reference to DTI making contact with the

airline to discuss its links with UK manufacturers. DTI

are willing to see whether they can assist Cathay and improve still further the company's relationship with the UK aerospace industry. We understand that Cathay are about

to announce the purchase of B-777's with Rolls-Royce

engines. They are also encouraging China Southern to order

Boeing 777 aircraft with Rolls-Royce Trent engines instead

of the A330s.

ASAS

4.

As agreed at the Secretary of State's office meeting on

RB2AAT/1

CONFIDENTIAL