CONFIDENTIAL
(627
SRPS 438
CONFIDENTIAL
FM F C O 031845Z NOV 78
TO PRIORITY BERNE
TELEGRAM NUMBER 69 OF 3 NOVEMBER
INFO HONG KONG (GOVERNOR AND SCARFE)
UK/SHITZERLAND AIR SERVICES NEGOTIATIONS
AKK R4
RECCIVLO LATIN NO. 51
INTWIN
No
PA
1
1978
REGISTRY Action Texan
1. THE THIRD AND LAST ROUND TOOK PLACE IN LONDON 31 OCTOBER 1 NOVEMBER AND A CONFIDENTIAL MEMORANDUM OF UNDERSTANDING WAS SIGNED.
2. THE SWISS DELEGATION WAS LED BY AEBI (FEDERAL AIR OFFICE) AND THE UK DELEGATION BY STANDEN (DOT). LATHAM REPRESENTED HONG KONG GOVERNMENT.
321
3. SINCE THE SECOND ROUND OF TALKS (BERNE TELENO 42 OF 8 JUNE) THE AGREED SERIES OF DISCUSSIONS BETWEEN BA AND SWISSAIR HAVE TAKEN PLACE. THESE RESULTED IN THE SIGNING OF A COMMERCIAL AGREEMENT, SUBJECT TO GOVERNMENT APPROVAL, BETWEEN BA AND SWISSAIR ON 25 OCTOBER 1978. THE AGREEMENT PROVIDES DASICALLY THAT, IN CRDER TO RECTIFY THE PRESENT IMBALANCE IN EARNINGS BETWEEN THE AIRLINES, EA SHOULD BE ENTITLED TO PROVIDE 54 PERCENT OF CAPACITY BETWEEN UK AND SWITZERLAND INSTEAD OF THE EXISTING 50 PERCENT.. AT THE SAME TIME, THE CEILING ON POOL TRANSFERS WILL BE RAISED FROM 3 AND ONE QUARTER PERCENT TO SIX AND ONE HALF PERCENT OF THE PAYING PARTNER'S REVENUE. BA AND SWISSAIR ESTIMATE THAT THIS ARRANGEMENT SHOULD RESULT IN BA EARNING SOME POUNDS STERLING 3M MORE ON EUROPEAN OPERATIONS WITH SWISSAIR'S REVENUE BEING REDUCED BY THE SAME AMOUNT. THE RAISED POOL TRANSFER LIMIT WILL RESULT IN FURTHER, INCREASED BA REVENUE AT SWISSAIR'S EXPENSE. THE AGREEMENT ALSO PROVIDES FOR INCREASED PROMINENCE OF PA IN SWISSAIR'S COMPUTERISED RESERVATION SYSTEM AND OTHER PROMOTION CF DAS' SERVICES WITHIN SWITZERLAND.
4. IN ADDITION TO THE COMMERCIAL AGREEMENT, THE SWISS AGREED TO AMEND THE EXISTING ROUTE SCHEDULES TO PROVIDE ADDITIONAL POINTS FOR BRITISH AIRWAYS PEYOND SWITZERLAND IN THE GULF, AT KILIMANJARO, MAURITIUS, SEYCHELLES AND NEW ZEALAND, THESE ARE ESTIMATED BY DA TO DE WORTH SOME POUNDS STERLING 2.5M A YEAR. THEY ALSO AGREED TO THE DELETION OF BAHRA IN/DHAHRAM FROM THE SWITZERLAND-FAR EAST ROUTE. THE SWISS REPEATED THEIR REQUEST FOR NEW RIGHTS AT KANILA 3
CONFIDENTIAL
/ SEOUL,