CONFIDENTIAL
H.KK 18+/3
4
17 A
GR 415
PRIORITY
CYPHER CAT A
FM HONG KONG 171001Z
CONFIDENTIAL
TO PRIORITY F C O TELNO 1158 OF 17 NOVEMBER 1977
INFO PRIORITY MANILA.
DTI TELNO ALLOT 135 OF 8 NOVEMBER: UK/PHILIPPINES AIR SERVICES.
OUR VIEWS REGARDING PATI DESIGNATION IS THAT WE SEE NO BENEFIT TO HONG KONG FROM OR ANY NEED FOR, THE INTRODUCTION OF A SCHEDULED ALL-CARGO CARRIER ON PHILIPPINE ROUTE 1.
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2. THE AVAILABLE PASSENGER AND CARGO CAPACITY PROVIDED BY THE CURRENTLY DESIGNATED CARRIERS IS SATISFACTORY TO US IN TERMS OF THE PUBLIC INTEREST (AND TO CPA IN TERMS OF COMMERCIAL INTEREST) AND THIS IS SUPPORTED BY A STUDY OF DEMAND STATISTICS AND POTENTIAL FUTURE TRAFFIC AVAILABILITY. PAL AND CPA CO-OPERATE WELL (EVEN THOUGH CARGO IS NOT IN POOL) AND THE AIRCRAFT TYPES IN USE BY EACH CARRIER, COUPLED WITH POOLING ARRANGEMENT FOR PASSENGER SERVICE, PROVIDE ADEQUATE CARGO SERVICE ON THIS SHORT-HAUL ROUTE.
3. SHOULD THE MATTER BE PRESSED HARD BY THE PHILIPPINES, THE ADDITION OF NOT MORE THAN TWO WEEKLY PATI SERVICES WOULD PROBABLY (UNDERLINED) BE ACCEPTABLE, IF WE WERE FACED WITH A BREAKDOWN OF PRESENT ARRANGEMENTS,
4. WHAT OUR REQUIREMENTS MIGHT BE AS A QUID PRO QUO IS NOT CLEAR. WE CANNOT SEE ANY PARTICULAR TRAFFIC RIGHTS OR ADDITIONAL ROUTE POINT NEED FOR CPA. WE WOULD CERTAINLY WANT TO MAINTAIN THE CURRENT REASONABLE BALANCE OF EARNINGS UK/PHILIPPINES, WHICH GENERALLY INDICATES THAT PATI AND PAL SHOULD EQUATE THEIR TOTAL CARGO EARNINGS TO THOSE OF CPA. SUCH A REQUIREMENT WOULD BE DIFFICULT TO FORMULATE AND MANAGE AND WOULD BE DISADVANTAGEOUS TO PAL IF FORMULATED IN TERMS OF LIMITING PAL PASSENGER SEATS OR BLINDING OF PAL CARGO CAPACITY.
CONFIDENTIAL
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