INDONESIA
5 Indonesia is already concerned so far as possible to confine air traffic exchanges to end-to-end services and may gain from an increase in Australian tourists taking advantage of the new low fares to visit Indonesia. On balance her air services/tourist interests are not likely to be more than marginally affected since there is negligible stop-over tourist traffic. Nonetheless they might for political reasons respond if there were a strong appeal from Singapore to ASEAN solidarity. If they were to go so far as to deny overflying rights they could block CPA's services to East and West Australia. Qantas and BA could avoid Indonesian airspace and the Indonesian FIR (Flight Information Region) by flying direct from ec Bombay/Colombo to Perth, but this would not be the preferred routeing for all their services and would incur extra costs. The Indian attitude would then be crucial.
INDIA
6
A considerable volume of traffic is carred daily from London to India (Bombay) on the UK/Australia service. BA are reasonably confident that they would be able to make alternative arrangements for this en route to Hong Kong or Singapore or by turn round services (London-Bombay-London). We would not want to cut Air India's reciprocal services with the UK. India would keep her fifth freedom rights between London and New York but we would give up UK fifth freedom rights between India and Australia. To this extent India would gain vis a vis the UK under the new arrangement. On the other hand the Australians might find it more difficult to satisfy the Indians. Admittedly there is little true origin and destination traffic between India and Australia; and the Australians might be prepared to allow Air India to serve the route alone. But the new arrangement would involve a substantial cut in frequency on the India/Australia Sector (from 16 to one services a week) - although this would of course remove all competition for Air India. There is a slight risk that the Indians would retaliate against Australia, eg by denying Qantas the right to make technical stops on the sub-continent. Australia is considering ways of making such cuts more palatable by eg helping to encourage the development of Australian tourism in India; this would more than offset the loss of what little stop-over traffic there presently is. But they have not yet worked out how best to achieve this.
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}