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SUGGESTED THAT ONLY 2 OR 3 SERVICES WEEKLY BY SR TO HONG KONG WERE JUSTIFIED AND REQUESTED SWISS TO PRESS SWISSAIR TO REDUCE THEIR SERVICES ACCORDINGLY, UK DEL EMPHASISED THERE WAS NO OBJECTION TO SR CONTINUING TO CALL AT HONG KONG AS NECESSARY FOR TECHNICAL
REASONS.
6. SWISS DEL MAINTAINED VIEW THAT SR CAPACITY TO HONG KONG WAS JUSTIFIED BUT AGREED THAT BA AND SR SHOULD MEET AS SOON AS POSSIBLE IN AN EFFORT TO PRODUCE A SOLUTION WITH THE FOLLOWING TERMS OF REFERENCE QUOTE TO DISCUSS WAYS AND MEANS OF REDUCING OR ELIMINATING IMBALANCE OF EARNINGS BETWEEN UK AND SWISS AIRLINES IN THE LIGHT OF GOVERNMENT DISCUSSIONS AND THE UK GOVERNMENT'S VIEW THAT CAPACITY ON THE SWITZERLAND/HONG KONG ROUTE WAS EXCESSIVE UNQUOTE.
7. SWISS DEL INDICATED THEY WERE PREPARED TO AGREE TO ROUTE SCHEDULE AMENDMENTS PROPOSED IN PARA (C) OF STANDEN'S LETTER OF 14 MARCH, BUT THEMSELVES HAD SOME AMENDMENTS TO PROPOSE. SWISS WOULD WISH TO SEE THE INCLUSION OF QUOTE OF BIRMINGHAM AS AN OPTIONAL POINT ON BOTH ROUTES 1 AND 6 UNQUOTE AND THE INCLUSION IN SR ROUTE 4 OF SEOUL, MANILA AND OSAKA. SWISS WOULD ALSO WISH TO SEE MORE FLEXIBILITY IN THE ORDER IN WHICH POINTS COULD BE SERVED. THEY AGREE TO ACCEPT THE DELETION OF DHARAN AND BAHRAIN FROM SR ROUTE 4. UK DEL RESERVED ITS POSITION
ON THESE PROPOSALS.
8. DESPITE PRESSURE BY UK DEL, SWISS MAINTAINED THAT BECAUSE OF OTHER COMMITMENTS, THEY WERE UNABLE TO OFFER A DATE FOR THE THIRD ROUND OF TALKS TO CONSIDER THE OUTCOME OF THE AIRLINES' DISCUSSIONS BEFORE THE WEEK OCTOBER 30 NOVEMBER 2. IT WAS PROVISIONALLY AGREED THAT THE THIRD ROUND OF TALKS SHOULD TAKE PLACE IN LONDON ON THESE DATES.
GRIER
FILES
MAED WED
HK & GD
MR BUTLER MISS BROWN MR HIBBERT MR FERGUSSON
[COPIES SENT TO CAD/DOT]
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