HKK 184/1
537
Y NO.
OFFICER
REGISTR
RR GOVERNOR HONG KONG
INDEX
PA
Actio Takes
RR BCARFE HONG KONG
GPS 380
CYPHER CAT A
FM DOT 21173OZ
CONFIDENTIAL
Mr Ty
TO ROUTINE HONG KONG (GOVERNOR) TELNO ALLOT 141 OF 21 SEPTEMBER INFO HONG KONG (BCARFE), SINGAPORE.
UK/SINGAPORE AIR SERVICES.
YOUR TEL 876 OF 13 JULY, SINGAPORE TEL ALLOT 5 OF 19 SEPTEMBER AND OUR ALLOT 1 TO SINGAPORE OF 20 SEPT.
1. FOR REASONS WHICH MR LIAU DID NOT MAKE CLEAR SIA DELAYED PRESENTING THEIR REVISED PROPOSALS TO US UNTIL LAST WEEK. HE SAID THE REASONS WHY THEY WERE SEEKING THE CHANGES WERE THAT THEY NOW HAD FIRM DELIVERY DATES FROM M-D FOR THEIR NEW DC10'S WHICH AT THE TIME OF THE ROGERS/PILLAY DISCUSSIONS HAD BEEN IN DOUBT BECAUSE OF THE M-D STRIKE.
2. WE SEE NO REASON TO MAKE ANY CONCESSION OF ANY SIGNIFICANCE TO SIA AND WE HAVE THEREFORE LOOKED FOR THE MOST PRACTICABLE WAY IN WHICH WE COULD REQUIRE THEM TO MAKE COMPENSATING ADJUSTMENTS TO OFF-SET THE ADVANTAGES THEY WOULD GAIN FROM AN EARLIER SUBSTITUTION OF 4 DC10'S FOR 4 B727'S ON SIN BKK HKG.
3. WE CALCULATED THAT THE NETT EFFECT OF THE CHANGES SIA ARE NOW SEEKING TO THE APPROVED PACKAGE BETWEEN 1 JULY 78 AND 30 APRIL 79 WOULD BE TO ADD 9696 SEATS TO SIA'S OPERATIONS BETWEEN SIN AND HKG AND 2832 SEATS TO THEIR OPERATIONS BEYOND HKG 1.E. 12528 IN TOTAL. THE SIMPLEST SOLUTION APPEARS TO US TO BE TO REQUIRE SIA TO CEASE OPERATIONS TO OSA THROUGH HKG ON 31 JAN 79 INSTEAD OF 31 MAR 79. THIS PRODUCES A REDUCTION IN THE NUMBER OF SEATS TO BE OPERATED IN THE RELEVANT PERIOD OF 11232 AND FOR ALL PRACTICAL PURPOSES.