IMPLICATIONS FOR THE COUNTRIES AFFECTED
AND THEIR LIKELY REACTIONS
ANNEX A
SINGAPORE
There are two aspects. First, the ability of through passengers,
particularly from Australia, to stop over in Singapore for say a
couple of days and continue their journey with the same carrier
at a through preferential fare will be removed. This will
significantly affect the tourist trade in Singapore.
Secondly, it
will be necessary for both countries to impose an appreciable cut
on SIA's services (SIA's operations make a significant contribution
to the Singapore economy). Out of London, these are likely to be
reduced from a daily service to two or three a week and the
Australians propose considerably to reduce services between Singapore
They hope to arrange the introduction of cheap
and Australia.
fares between Australia and Singapore to encourage the growth in
tourist trade from Australia for stays of longer then the present
one or two days. It is fairly certain, however, that Singapore
will be seriously upset at the immediate loss which she will
suffer.
MALAYSIA
2 Malaysia will lose the ability legally to carry through traffic
at the new low fare from Australia to Europe. Malaysian Airline System (MAS) will however gain from cuts in the SIA services to London, because SIA will be much less able to carry traffic from
Malaysia to the UK over Singapore. MAS will also gain traffic from
Qantas' exclusion from the Kuala Lumpur-London sector. It will not
be necessary to cut the existing two services per week operated from
London by MAS. The most serious difficulty is the risk that the
Malaysians will see in our agreement with Australia an attempt to deny them the opportunity they are seeking for the expansion of MAS.
1