170
.GR 300
CYPHER/CAT A
FM FCO 151931Z
RESTRICTED
RESTRICTED
TO ROUTINE BERNE TELNO 17 OF 15/3/70
INFO HONG KONG (GOVERNOR AND BCARFE) UK/SWITZERLAND AIR SERVICES
HKK 184/1
MAR 1978 PA
See
1. FURTHER TO OUR TELNO 172 TO HONG KONG AND TO BERNE, TALKS TOOK
PLACE WITH A SWISS DELEGATION IN LONDON ON 14 AND 15 MARCH
TO REVIEW THE PRESENT STATE OF EARNINGS UNDER THE AIR SERVICES
AGREEMENT WHICH, ACCORDING TO OUR CALCULATIONS, ARE NOW SERIOUSLY OUT OF BALANCE (UK £16M, SWITZERLAND £32M IN THE YEAR ENDING MARCH 1977). THE SWISS DELEGATION WAS LED BY AEBI (FEDERAL AIR OFFICE) AND THE UK DELEGATION BY STANDEN (DOT).
2. THE DISCUSSIONS TURNED OUT TO BE PURELY EXPLORATORY. WE OUTLINED
OUR POSITION QUOTING ESTIMATED REVENUE AND TRAFFIC FIGURES FOR SWISSAIR'S SERVICES TO HONG KONG WHICH ARE LARGLELY RESPONSIBLE
FOR WHAT WE THINK IS AN UNACCEPTABLE IMBALANCE IN EARNINGS.
WE ALSO MADE TENTATIVE SUGGESTIONS FOR POSSIBLE WAYS IN WHICH THE
BALANCE MIGHT BE REDRESSED. THE SWISS DELEGATION CLAIMED THT
THEY HAD NO FIGURES WHITH THEM ON WHICH A MEANINGFUL DISCUSSION
OF QUR ESTIMATES COULD BE BASED. THEY HAD GIVEN NO THOUGHT AS
TO POSSIBLE MEASURES TO REMEDY THE SITUATION WHICH IN ANY CASE
THEY CONSIDERED ACCEPTABLE, HAVING REGARD TO THE BERMUDA PRINCIPLES
EMBODIED IN THE ASA AND THE LIBERAL. ATTITUDE OF THE SWISS
AUTHORITIES OVER THE YEARS.
3. IT WAS AGREED THAT AS A FIRST STEP, REPRESENTATIVES OF SWISSAIR
AND BRITISH AIRWAYS SHOULD MEET AND COMPARE STATISTICS FOR A REPRESENTATIVE TWELVE-MONTH PERIOD. THE SWISS AUTHORITITIES WOULD
GIVE FURTHER THOUGHT TO OUR SUGGESTIONS AND THERE WOULD BE ANOTHER
MEETING AT GOVERNMENT LEVEL IN BERNE IN MAY OR JUNE.
OWEN
FILES:
MAED
WED
HK & G D
[COPIES SENT TO CAD/DOT]
MR BURROWS
MR SUTHERLAND
MR MURRAY
RESTRICTED