CONFIDENTIAL
CAPACITY, SOME ADDITIONAL MEANS OF CONTROLLING 5TH FREEDOM
CAPACITY ON THE '' BEYOND '' SECTORS THAT WOULD TAKE COGNISANCE
OF THE RELATIVE VALUES OF SECTORS. HONG KONG-USA FOR INSTANCE
WAS AN EXTREMELY VALUABLE SECTOR WHICH FAR OUT-WEIGHED IN VALUE
ANY SECTOR BEYOND BKK. THE THAIS SEEMED TO ACCEPT THIS LINE
OF THINKING.
6. IT EMERGED FROM DISCUSSION THAT THAI INTERNATIONAL ARE
SERIOUSLY PLANNING AN OPERATION VIA HONG KONG TO THE UNITED
STATES AS EARLY AS 1979. THE TEAM HAS GATHERED, THAT, WHILE
TG THEMSELVES ARE SOMEWHAT RELUCTANT TO TAKE THE PLUNGE SO
EARLY IN VIEW OF AIR SIAM'S EXPERIENCE, THEY ARE UNDER PRESSURE FROM THEIR GOVERNMENT. THE INDICATIONS, HOWEVER, ARE THAT
THEIR PLANNING IS ON A MORE MODEST SCALE THAT THE FOR ER AIR
SIAM OPERATIONS.
7. ON ROUTE SCHEDULES, THE THAIS SAID THAT THEIR MAIN OBJECTIONS
TO THE ROUTE SCHEDULES IN THE FEBRUARY 1976 CMU WERE THAT THEY
WERE UNHAPPY ABOUT THE RESTRICTIONS PLACED ON THEIR FREEDOM
TO OPERATE TO CANADA ON ROUTE 1 AND TO KOREA ON ROUTE 2 > AND THAT OUR ABILITY TO OPERATE UK ROUTE 1 IN REVERSE WOULD
EFFECTIVELY GIVE THE UK THREE ROUTES AS OPPOSED TO THEIR TWO. AS REGARDS THE FIRST OF THESE POINTS, ROGERS SAID THAT IN VIEW OF THE LARGE IMBALANCE IN THE THAIS' FAVOUR, IT WAS INCONCEIVABLE THAT WE SHOULD ALLOW A THAI AIRLINE TO OPERATE REYONG
RPT BEYONGD THE UK ACROSS THE ATLANTIC. THIS WAS A RIGHT OF
ENORMOUS VALUE. IN THE 1976 CMU, IN ORDER TO SPARE THE THAIS' FEELINGS, WE HAD LEFT THIS POINT IN THE ROUTE SCHEDULE BUT BARRED IT IN THE CMU. IT MIGHT BE MORE SENSIBLE, HOWEVER, TO DELETE IT ALTOGETHER ESPECIALLY SINCE THAI INTERNATIONAL SAID
THEY HAD NO INTENTION OF OPERATING SUCH A SERVICE AT PRESENT.
AS REGARDS KOREA, HE SAID THAT THIS POINT WAS SENSITIVE TO
CPA AND THAT THE EXERCISE OF FIFTH FREEDOM RIGHTS TO KOREA BY TG WOULD FURTHER TILT THE REAL BALANCE OF ADVANTAGE IN
THE THAIS' FAVOUR. HE SUGGESTED THAT IF A UK CARRIER OPERATED
ROUTE 1 IN REVERSE IT BECAME REALLY A QUESTION OF CAPACITY
ON THAT ROUTE. SINCE THE THAIS WERE VASTLY OUT -EARNING US
ON THE TRUNK ROUTE HE WOULD HAVE THOUGHT THEY WOULD HAVE
WELCOMED THIS AS A MEANS OF REDUCING THE UK'S GROUNDS FOR
FUTURE COMPLAINT ABOUT THE IMBALANCE OF THE AGREEMENT. IF THEIR
REAL CONCERN(AS IT APPEARED) WAS ABOUT TA REVERSE OPERATION BY CPA THE WHOLE WAY TO LONDON, HE WAS PREPARED TO PUT INTO
- 3- CONFIDENTIAL
/WRITING