890F.796/10–3145
The Chargé in Saudi Arabia (Sands) to the Secretary of State
[Received November 13.]
Sir: I have the honor to refer to the negotiations which Mr. Jack Nichols, Vice President of T.W.A. Airlines, has been carrying on with Saudi Arabian Government for the establishment of air line services in this country. On October 17–18, 1945, Mr. Nichols was again in Jidda for this purpose, in the company of Major General B. F. Giles, general officer commanding in the Middle East.
I enclose herewith copies of letters he addressed to the Minister of Finance and the Acting Minister of Foreign Affairs, and to Prince Faisal.28 These two letters sum up succinctly the entire course of these negotiations, and I have no comment to make on the technical nature of the proposals.
On October 27 the Acting Foreign Minister, to whom the King [Page 966] had given plenary powers to negotiate air agreements, gave me the government’s answer to Mr. Nichols, with the request that I transmit the message. It stated that the Saudi Government granted a forty-day period to T.W.A. for the purpose of making a technical survey of the possibilities of a domestic Saudi air line for the transport of passengers, and a ninety-day period for the study of cargo transport. During this period the government undertook not to conclude an agreement with any other company for these services, but reserved the right to conduct similar negotiation with others. To date there has been no reply from Mr. Nichols.
During the entire course of these conversations the Acting Foreign Minister was quite explicit that the principal obstruction to any agreement with an American company was the objection of the British Government. Ali Abdullah Ali Reza, who carried the enclosed letter to Prince Faisal, also reported to me that while Faisal himself was entirely sympathetic with the American proposals, he had admitted that any offer from an American company would be shown to the British, in order to ascertain if they could make the same offer, or a better one. Faisal is at this writing on his way to London, and will take no part in further negotiation, so that Shaikh Yusuf Yassin remains as the considerable hurdle in the way of their successful completion, insofar as purely Saudi influences are at work. It is said that the only stipulation which the King has made is that the line should not be government-owned or managed, since he knows the limitations of his own people.
Further developments will be promptly reported.
Respectfully yours,
- Dated October 18, 1945, neither printed. The joint letter to Abdullah Sulai-man and Yusuf Yassin called attention to the conversation on aviation matters between the Amir Faisal and Mr. Nichols during the Amir’s visit to Washington (see pp. 1000 ff.), and stated that within 45 days TWA could submit three alternative proposals for the establishment of passenger, mail, and cargo services in Saudi Arabia, as follows: 1. TWA would be granted a concession to supply air services to meet the requirements of Saudi Arabia, the approximate cost to the Government being set forth; 2. Saudi Arabia would own outright the proposed airline and TWA would enter into a management contract, whereby, for certain compensation, it would operate the airline for the Government; or 3. TWA would supply air services to meet the requirements of Saudi Arabia and be reimbursed for its costs, plus 15%.↩