at this sort of level would on the one hand substantially stimulate stop-over traffic (and thus tourist earnings) in the ASEAN countries and on the other hand represent the maximum loss of revenue which could be contemplated without undermining the finely balanced economics of the new system and thus make it necessary to increase fares for the end to end traveller. We agreed, however, that there might be advantage in reducing the stop-over surcharge below A$200 for some period of the year and I said that we would be content if you were to offer a stop-over surcharge of just below A$200 during part of the off-peak season in your negotiations with the ASEAN countries provided this was offset by a corresponding increase in the rest of the year. The sort of nattern that you and we had in mind is shown in the attachment.
6. We agreed that, if stop-over arrangements on these lines were introduced, prorates would be calculated as follows:
b.
for the through leg, the carrier concerned (ie British Airways or Qantas) would receive the appropriate APOW fare;
for the stop-over leg, the carriers concerned would share the balance of the fare on a great circle mileage basis.
7. This would of course be on the understanding that the other elements in the ICAP scheme were not changed and that the conditions for stop-over fares which you and we agreed in Canberra in January would not be altered without our prior concurrence.
8. We also discussed the fares between Hong Kong and Australia and I confirmed that we would be content to accept the reduced APEX and GIT fares which had been agreed between Qantas and Cathay Pacific. You undertook to arrange for very urgent consideration to be given to an early announcement of the introduction of the fares package, as thus amended, since it has now been held in abeyance for several months. We agreed a possible joint press announcement and a copy of this is attached.
9. We took the opportunity to consider the effects of fuel cost increases and adopted the working assumption that the point-to-point APEX fares on the trunk route would be increased by a flat amount of A$58.
Yours sincerely
senate
(G T ROGERS)