CONFIDENTIAL
彳
351
GRS 580A
IMMEDIATE
CYPHER CAT A
HKK 184/1
2▾ JUN 1978
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FM KUALA LUMPUR 220850Z
IN EX
PA
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sotion Teken
No
CONFIDENTIAL
DESKBY FCO 221000Z
NIR
TO IMMEDIATE FCO TELNO 292 OF 22 JUNE 1978
PRIORITY TO SINGAPORE, JAKARTA, CANBERRA, MANILA, BANGKOK, DELHI AND HONG KONG (FOR GOVERNOR AND BCARFE)
YOUR TELEGRAM NO 159 TO SINGAPORE: UK/AUSTRALIA AIR SERVICES
1. THE MALAYSIANS REACTION WILL TURN ON THEIR ASSESSMENT OF HOW
DAMAGING THE NEW MEASURES WOULD BE TO THEIR CIVIL AVIATION INTERESTS.
HOWEVER AN IMMEDIATE EMOTIONAL TENDENCY TO REJECT THE PROPOSALS
COULD BE OVERCOME IF IT COULD BE SHOWN THAT THE NET EFFECT WOULD
BE BENEFICIAL AT LEAST IN THE MEDIUM TERM.
2. HOWEVER WE CANNOT UNDERSTAND HERE HOW THE MALAYSIANS COULD BE THE GAINERS. THE AUSTRALIAN PROPOSALS IMPLY THAT BOTH THE UK/ MALAYSIA AND THE AUSTRALIA/MALAYSIA BILATERALS WOULD NEED TO BE
RENEGOTIATED WITH THE OBJECT OF LIMITING MAS'S ABILITY TO CARRY SIXTH FREEDOM TRAFFIC, WHICH WE UNDERSTAND ACCOUNTS FOR ABOUT ONE-THIRD OF THEIR REVENYE ON THEIR AUSTRALIA/UK SERVICES. QUITE
APART FROM BEING POLITICALLY OUT OF THE QUESTION IN THE PRESENT
STRAINED STATE OF ANGLO-MALAYSIAN AVIATION RELATIONS, IT SEEMS IN ANY CASE UNLIKELY THAT WE WOULD BE IN A POSITION TO CUT BACK
MAS'S CURRENT TWO DC10S TO LONDON PER WEEK. THE REASON FOR THIS
IS THAT THE NEW PROPOSALS WOULD CREATE REDUCED OPPORTUNITIES FOR
MALAYSIAN TRAFFIC TO BE CARRIED TO LONDON OVER SINGAPORE AND
BANGKOK AND THEREBY INCREASE THE DEMAND ON THE KL/LONDON SECTOR. QANTAS'S WITHDRAWAL FROM FIFTH FREEDOM RIGHTS KL/LONDON SHOULD
ALSO HELP TO INCREASE THE DEMAND ON THIS SECTOR.
3. THEREFORE RESTRICTIONS ON MALAYSIA'S PRESENT ABILITY TO CARRY SIXTH FREEDOM PASSENGERS AUSTRALI/UK WOULD HAVE TO COME FROM REDUCTIONS IN THEY USTRALIA/MALAYSIA BILATERAL. HOWEVER THERE CAN
BE LITTLE COMFORT HERE SINCE IT WOULD BE CLEAR THAEHORLD-WIDE
THE UK AND AUSTRALIA WERE ACTING IN CONCERT TO DENY SIXTH FREEDOM
OPPORTUNITIES. WHATEVER HAPPENS IT IS DIFFICULT TO SEE HOW THE MALAYSIANS (OR ANY OTHER MID-POINT COUNTRY) COULD ACTUALLY BENEFIT FROM STEPS TAKEN TO REDUCE SIXTH FREEDOM OPERATIONS.
CONFIDENTIAL
114.
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