GR 340

CYPHER CAT A

CONFIDENTIAL

#KK 184.!

1978

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FM SINGAPORE 110700Z APR

CONFIDENTIAL

No of

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TO ROUTINE DOT TELNO ALLOT 3 OF 11 APR 78

INFO FCO AND GOVERNOR HONG KONG, BCARFE HONG KONG.

MR YOUR ALLOT 2: UK/SINGAPORE AIR SERVICES

Teen

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See 207

T. PHILLIPS CALLED ON MINISTRY OF COMMUNICATIONS ON 7 APRIL AND DISCUSSED THIS WITH PEK HOCK THIAM WHOSE POST, EQUIVALENT TO DEPUTY SECRETARY, IS NOW DESCRIBED AS DIRECTOR OF AVIATION AND AIRPORT DEVELOPMENT. AS SUCH PEK IS NOW UNDERSTUDY TO SIM KEE

ROON ON AIR SERVICES MATTERS.

2. PHILLIPS TOLD PEK OF THE VARIOUS EXCHANGES BETWEEN YOUR DEPARTMENT AND SIA OVER TRANS-PACIFIC SERVICES AND IN PARTICULAR

OVER THE FREIGHT SERVICE FOR WHICH A TEMPORARY OPERATING PERMIT

HAS RECENTLY BEEN ISSUED. HE ALSO GAVE PEK A BRIEF RUNDOWN OF THE ABORTIVE NEGOTIATIONS ON A PROPOSED JOINT PASSENGER SERVICE

BY SIA AND CPA.

3. PEK EXPRESSED APPRECIATION FOR THIS INFORMATION, SAYING (AS SIM KEE BOON TOLD ROGERS) THAT SIA HAD NOT KEPT HIS MINISTRY INFORMED IN ANY DETAIL OF THEIR TRANS-PACIFIC PLANS. THE MINISTRY DID NOT YET KNOW WHEN SIA WERE PROPOSING TO MOUNT THEIR PASSENGER SERVICE TO USA, BUT IT WAS UNLIKELY TO BE BEFORE THIS TIME NEXT YEAR. PEK DID NOT IN THE MEANTIME KNOW ON WHAT PROJECTIONS OF LIKELY TRAFFIC FROM WHICHEVER PORTS OF CALL THE AIRLINE WERE BASING THEIR PLANS.

4. PEK DID NOT QUESTION THE BASIC ASSUMPTION THAT, IF THE NEW SERVICE RELIED SUBSTANTIALLY ON TRAFFIC TO AND FROM HONG KONG, ITS EFFECT ON THE BALANCE OF UK/SINGAPORE EARNINGS MIGHT CALL FOR A COMPENSATING ADJUSTMENT OF SERVICES ELSEWHERE, HE SAID, HOWEVER, THAT IF THIS AROSE, HE HOPED OUR APPROACH WOULD BE POSITIVE. HE ASKED THEREFORE WHETHER CPA WOULD BE

CONFIDENTIAL

/ SEEKING

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