TNAG-2537-FCO40-3708-Air-services-agreement-between-Hong-Kong-and-China-1992 — Page 6

FCO40 Hong Kong Department Records 聯邦事務部香港部檔案 All

THE DEPARTMENT

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FAX

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SWITCHBOARD 071-276 3000

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Dr EJ Hughes

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Foreign and Commonwealth Office

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FAX 071 276 5390

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21 August 1992

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Mr Bouter

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UK/TAIWAN AIR SERVICES AND UK/HR/PRC AIR SERVICES

British Airways came here on 19 August to discuss the steps to be taken toward the introduction of services to Taipei this Winter and the implications of this for UK/HK/PRC air services talks. That enables us to respond to the points raised in the meeting we had with Christopher Hum and others on 5 August and by Peking and Hong Kong in their latest telegrams (Peking 1146, 2092 and 2116). I attach three draft telegrams to Peking reporting the main points from the meeting with BA but you may like a more complete account of our discussion.

HK

BA fully appreciate that we would want to have from them, before Ambassador Ma is called in, a written assurance that they will proceed with the introduction of services this Winter. David Holmes and Bob Ebdon readily took the point but said that they would need to put a full evaluation to Sir Colin Marshall. We have all recognised that, in addition to our political concerns about the Taiwan services, there are also considerable risks to BA in commercial terms. The worst case scenario is if the Chinese were to close their airspace to all BA movements from which the loss to BA would be about £16m a year. We believe that the Chinese have it in their ability to close their airspace to BA on all but the Peking services (although we are checking the position separately with John Grainger). We think it unlikely they would do so and BA's instinct is the same; nevertheless they will want to reflect on that and lesser levels of risk before giving us any written commitment. They expect to be able to write

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