PRIORITY
CYPHER/CAT A
HONG KONG 160550Z
CONFIDENTIAL.
CONFIDENTIAL
TO PRIORITY FCO TELNO 228 OF 16 MARCH INFO BCARFE.
YOUR TELEGRAMS 75, 178 AND 263.
AIR FARES
WE RECOGNISE THAT IT WOULD NOT BE PRACTICABLE FOR US TO PRESS AT THIS STAGE FOR A REDUCTION IN NORMAL INTERNATIONALLY AGREED IATA FARES IN THE FACE OF RISING COSTS AND PRESENT AIRLINE PRICING POLICY:
2. WE ALSO ACCEPT THAT, IN THE PRESENT CLIMATE, DIFFERENTIAL PRICING IS THE ONLY METHOD OF FILLING EMPTY SEATS, BUT IT SURELY FOLLOWS THAT CONCESSIONARY FARES SHOULD BE SUCH AS TO ATTRACT TRAFFIC. THIS WE BELIEVE IS NOT BEING ACHIEVED TO THE SAME EXTENT OVER THE FAR EAST/EUROPE ROUTES AND, IN PARTICULAR, OVER THE HONG KONG/ LONDON ROUTE, AS IT IS OVER SOME OTHER ROUTES SUCH AS NORTH ATLANTIC.
1
1.
1
3. IN THE CASE OF THE HONG KONG/LONDON ROUTE WE FEEL THAT THERE IS SCOPE FOR CONSIDERABLE IMPROVEMENT IN THIS RESPECT. OVER THE PAST YEAR, HONG KONG RESIDENTS HAVE BEEN PLACED INCREASINGLY AT A DISADVANTAGE WITH REGARD TO CONCESSIONARY FARES COMPARED WITH RESIDENTS IN THE UNITED KINGDOM. HONG KONG HAS ALSO BEEN EXCLUDED FROM THE LIST OF COUNTRIES IN SOUTH EAST ASIA WHOSE RESIDENTS NOW BENEFIT FROM VERY LOW NON-AFFINITY FARES TO LONDON, BEARING IN MIND HONG KONG'S SPECIAL RELATIONSHIP WITH THE UNITED KINGDOM AND THE NATURE OF THE ROUTE (CABOTAGE) THIS EXPOSES US TO CRITICISM WHICH WE CANNOT COUNTER. IT IS PARTICULARLY DIFFICULT TO REFUTE SUGGESTIONS THAT BOAC ARE ABLE TO CHARGE RELATIVELY HIGHER CONCESSIONARY FARES ON THE HONG KONG/LONDON ROUTE BECAUSE OF
BOAC'S MONOPOLY.
4. THE RECENT BOAC PROPOSALS, ALTHOUGH A STEP IN THE RIGHT
•
DIRECTION, STILL LEAVE HONG KONG RESIDENTS AT A CONSIDERABLE DISADVANTAGE: AND THERE SHOULD BE SCOPE FOR IMPROVING THEM WITHOUT OFFENDING THE RULES GENERALLY GOVERNING CONCESSIONARY FARES ON A CABOTAGE ROUTE. SPECIFICALLY, WE WOULD PRESS FOR A REDUCTION IN
CONFIDENTIAL
/THE