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4. THE BASIS ADOPTED (FOR WHICH THERE IS SOME JUSTIFICATION IN LOGIC) WAS THAT THE FARE SHOULD BE TWICE THE ADVANCED PURASE ONE-WAY (APOW) FARE WITH A NOTIONAL SURCHARGE FOR THE ADDITIONAL COSTS INCURRED IN STOPOVER, THIS NOTIONAL SURCHARGE WAS SET AS A050. (THIS COMPARES WITH THE SURCHARGE OF A975 UNDER THE OLD SYS: ON A FARE WHICH IS ITSELF HIGHER THAN THE OLD APEX.) THE RESULTANT FARE LEVELS ARE 914, 1114, 1214 RESPECTIVELY AT OFF-PEAK, SHOULDER AND PEAK PERIODS. THIS COMPARES WITH THE 01930, 1270, 1300 PROPOSED BY THE AUSTRALIANS AS AN INTERIM FARE AND WITH 01075, 1275 AND 1375, THE PRSENT LOWEST FARE WITH PROVISION FOR. ONE STOPOVER. THE SUM-OF-SECTOR FARES (WHICH ARE THE LOGICAL BASIS) WOULD BE HIGHER AND WOULD LEAD TO DIFFERENT COSTS COSTS FOR STOPPING OFF AT THE VARIOUS ASEAN POINTS WHICH WOULD BE UNACCEPTABLE TO THE MALAYSIANS AND THAIS AT LEAST,
5. THE EFFECT OF THE WHOLE NEW FARE STRUCTURE (INCLUDING THE PRO- POSED NEW SECTOR FARES AS WELL AS THE STOPOVER FARE AS THUS CAL- CULATED) ON THE TOTAL NUMBER OF VISITORS TO SINGAPORE WAS CONSIDERED IN DEPTH. (SINGAPORE WAS TAKEN AS THE WORST CASE.) BA, WHO DID MUCH OF THE WORK ON THIS, PRODUCED TWO ALTERNATIVE MODELS RELATED TO A STOPOVER FARE COMPUTED ON THE ABOVE LINES. THE NET EFFECT WAS CALCULATED TO BE AN INCREASE IN THE NUMBER OF VISITORS IN BOTH
CASES, 11,700 PER YEAR IN THE ONE AND 3,900 IN THE OTHER. THE RESULTS DEPEND VERY MUCH ON THE ASSUMPTIONS MADE REGARDING SUCH THINGS AS PRICE ELASTICITY OF THE DEMAND FOR STOPOVER BUT THE GOVERNMENT REPRESENTATIVES IN BOTH TEAMS WERE SATISFIED THAT WE COULD AT LEAST DEMONSTRATE A NEUTRAL EFFECT ON TOURISM (PARA 7
OF TUR).
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6. OTHER ANCILLARY ASPECTS OF THE FARE, SUCH AS THE RELATIVE SHARES
OF THE TOTAL FARE WHERE A PASSENGER TRAVELS ON MORE THAN ONE AIRLINE IN THE COURSE OF HIS JOURNEY (THE QUOTE PRO-RATE UNQUOTE), CHILD-
REN'S FARES AND THE DETAILED CONDITIONS OF THE FARE WERE CONSIDERED
AND AFTER MANY HOURS OF DISCUSSION TOTAL AGREEMENT WAS REACHED
ON THE PROPOSALS THAT SHOULD BE PUT TO: THE ASEAN COUNTRIES AND (WITH OUR HONG KONG HAT ON) TO THE UK.
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