890F.796/12–2445: Telegram
The Minister in Saudi Arabia (Eddy) to the Secretary of State
[Received December 25—6:12 a.m.]
431. Deptel 369, December 20. Negotiations conducted December 22–23 by TWA with SAG (Saudi Arabian Govt) concerning internal SAG airline or other air services made no progress except clarification of proposals. SAG requests more time to study subject and may request another conference with General Wilson January 2–4. Otherwise, and more probably, negotiations will be deferred.
TWA furnished ultimatum on three proposals:
- (1)
- Straight concession to TWA to operate 2 planes on a single weekly scheduled round trip Cairo–Jidda–Riyadh–Dhahran plus 2 additional planes available for charter service.
- (2)
- Same services as above with TWA operating management contract with ownership entirely by SAG and at SAG risk.
- (3)
- Joint ownership with TWA taking not more than 20% stock in flag airline.
All proposals are non-exclusive and without prejudice to formation of other flag airlines or use of facilities by planes of other nationality.
SAG indicated preference for type 3 proposal to which they might want to add modifications or other services if they renew negotiations at all in near future.
I am puzzled by Dept understanding that TWA would propose only “technical or advisory services”. TWA has made straightforward proposals including technical and advisory services in a view to developing commercial aviation for Saudi Arabia. I did not understand that such proposals need apology provided they are not monopolistic. SAG informed TWA and me that similar commercial proposals have been made also by a British and an Egyptian company making at least three competitive proposals under consideration.
Sent Dept, repeated Cairo as 291 and to London.