(49)
GR 425
PRIORITY
CYPHER/CAT A
HONG KONG 251645Z
DICNG
CONFIDENTIAL
CONFIDENTIAL
R+R
TO PRIORITY F.C.O TELNO, 1131 OF 25 SEPTEMBER 78
INFO PEKING.
Mr Thompson
We must keep
/.
done touch
539
with Hongkong on this
нукут
m
HKK 184/1
REENEDY NO. 51
SP 1978
ALLEN (FED)'S LETTER OF 31 AUGUST TO STABLES (DOT)
U.K/CHINA AIR SERVICES.
OFFICER
INDEX
PA
REGISTRY
Action Teken
1. CPA HAVE NOW PROVIDED THEIR ASSESSMENT OF CAL'S PRESENT
RELIANCE ON HONG KONG (MY TELNO.923, PARA.3) (IN U.S DOLLARS):-
EARNINGS ON H,K/TAIWAN.
CAL.
35 MILLION.
CPA.
80 MILLION.
TOTAL EARNINGS,
274 MILLION,
280 MILLION.
PERCENTAGE,
12.7.
28.5.
2. THIS SHOWS THAT CAL ARE LESS DEPENDENT ON HONG KONG FOR THEIR
EARNINGS THAN IN THE PAST. CPA ESTIMATE THAT THIS TREND WILL CONTINUE AS CAL BUILD UP THEIR SERVICES TO THE USA, MIDDLE EAST AND, POSSIBLY, EUROPE (CAL HAVE APPARENTLY APPLIED FOR A ROUTE TO PARIS). THIS BEING SO, CAL COULD AFFORD TO LOSE THEIR SERVICES
TO AND THROUGH HONG KONG,
·
3. AN ADDITIONAL CONSIDERATION, NOT REFLECTED IN THE ABOVE EARNINGS
PATTERN, IS THE FINANCIAL CONSEQUENCE OF CPA'S LOSING THE ABILITY
TO OVERFLY TAIWAN, AS HAPPENED TO JAL. CURRENTLY CPA OPERATE 34
SERVICES WEEKLY THROUGH TAIPEI TO POINTS IN JAPAN AND KOREA: A
DAILY DIRECT SERVICE TO TOKYO AND A DAILY DIRECT SERVICE TO OSAKA
CPA PLAN TO MOUNT, W. E, F 1 NOVEMBER, THREE SERVICES WEEKLY TO
NACO YA. CPA ESTIMATE THAT OPERATING COSTS WOULD INCREASE BY U.S
DOLLARS 7.5 MILLION PER ANNUM IF ALL THE ABOVE SERVICES (BOTH NORTH
AND SOUTH BOUND) WERE REQUIRED TO CIRCUMNAVIGATE TAIWAN AIRSPACE
THIS DOES NOT TAKE INTO ACCOUNT THE LIKELY REDUCTION OF TRAFFIC
ON THE LONGER ROUTINGS, CPA ALSO PLAN TO OPERATE, W.E.F 1 NOVEMBER
THREE SERVICES WEEKLY TO KAOHSIUNG IN TAIWAN. LOSS OF EARNINGS FROM
THIS SERVICE IS ESTIMATE AT ABOUT US DOLLARS 2 MILLION PER ANNUM
(NOT INCLUDED IN PARA.1).
CONFIDENTIAL
M. WE