RESTRICTED
Ino
GR 562A
PRIORITY
HER/CAT A
FM BERNE 08/19257
RESTRICTED
TO PRIORITY FCO TELNO 42 OF 8 JUNE
INFO ROUTINE HONG KONG
UK/SWITZERLAND AIR SERVICES TALKS.
BAHKR18411
JUN 1978
TRY
B21
IND
PA.
Actio. Teken
حاله
1. SECOND ROUND OF ABOVE NEGOTIATIONS TOOK PLACE IN BERNE 6
JUNE 1978.
ऋ
8
2. AS REPORTED IN FCO TELNO 7 OF 15 MARCH 1978, REPRESENTATIVES OF SWISSAIR (SR) AND BRITISH AIRWAYS (BA) HAD MET AND AGREED STATISTICS FOR THE YEAR ENDING MARCH 1977. (THESE HAD INDICATED EARNINGS BY SR UNDER AIR SERVICES AGREEMENT (ASA) OF POUNDS STERLING 37.7M. AND OF UK AIRLINES OF POUNDS STERLING 16.6M.) 3. SWISS DELEGATION AT SECOND ROUND OF TALKS WAS LED BY AEBI (FEDERAL AIR OFFICE) AND THE UK DEL BY STANDEN (DOT). LATHAM REPRESENTED HONG KONG GOVERNMENT.
4. SWISS REPLIED AT LENGTH TO STANDEN'S LETTER OF 14 MARCH. THEY DID NOT ACCEPT THERE WAS NECESSARILY ANY NEED FOR EQUAL EARNINGS UNDER THE ASA AND MAINTAINED AT LENGTH THEIR VIEW THAT
SR NEEDED TO GIVE SERVICES WEEKLY TO HONG KONG BECAUSE OF THE ? Daily
PATTERN OF THEIR OPERATIONS ALTHOUGH THEY ADMITTED THAT THEIR 3RD/4TH FREEDOM LOAD FACTOR WAS 16% AND THE TOTAL 3RD/4TH/5TH LOAD FACTOR WAS ONLY 32%. SWISS FELT THAT ANY TRANSFER OF SERVICES TO GATWICK WOULD BE WASTEFUL AND CONTRIBUTE NOTHING TO ELIMINATION
OF ADMITTEDLY LARGE IMBALANCE.
5. DURING FURTHER DISCUSSION UK DEL MAINTAINED VIEW THAT PRESENT IMBALANCE OF EARNINGS WAS UNACCEPTABLE AND CALLED UPON SWISS TO REMEDY IT. UK DEL SAID THAT SR'S CAPACITY TO HONG KONG WAS EXCESSIVE AND DID NOT COMPLY WITH REQUIREMENTS OF ARTICLE 3(1) OF ASA, THAT SR'S FIFTH FREEDOM REVENUE WAS EXCESSIVE IN RELATION TO THEIR THIRD/FOURTH FREEDOM REVENUE AND PATTERN OF SERVICES BETWEEN SWITZERLAND AND HONG KONG DID NOT FULFIL REQUIREMENTS OF ARTICLE 4 OF ASA, IN PARTICULAR THERE WAS ALREADY AMPLE CAPACITY, INCLUDING THAT PROVIDED BY UK CARRIERS, TOKYO-HONG KONG AND BANGKOK-HONG KONG. UK DEL SAID THE AGREED FIGURES
RESTRICTED'
SUGGESTED THAT