6. THE UESTION OF A SURCHARGE TO TAKE ACCOUNT OF THE RECENT INCREASE IN FUEL COSTS WAS DISCUSSED AND CPA RELUCTANTLY AGREED TO ACCEPT THE FIVE PER CENT INCREASE PROPOSED BY YEA TO THE
AUSTRALIAN GOVERNMENT. CPA HAD IN MIND A SEVEN PER CENT
INCREASE AS PROPOSED BY IATA.
7. ON CURRENCY EXCHANGE, IT WAS AGREED TO CONVERT AUSTRALIAN DOLLARS TO HONG KONG DOLLARS AT THE RATE OF 1 : 5.5 AND TO ADJUST FARES WHEN THIS RATE VARIED BY 2.5 PER CENT.
3. IT WAS ALSO AGREED THAT SEASONALITY NEEDED FURTHER
REFINEMENT.
9. CPA 03JECTED STRONGLY TO THE RECENT AUSTRALIAN GOVERNMENT
ANNOUNCEMENT OPAT COMMISSION ON GIT FARES WOULD BE RETAINED AT ELEVEN PER CENT UNTIL 31 OCTOBER 1979 AND RETAIL COMMISSION WOULD BE INCREASED TO NINE PER CENT FROM APRIL 1979. EA
HAVE ALREADY OBJECTED TO THE AUSTRALIAN GOVERNMENT.
10. ALTHOUGH EA INDICATED REVISED PROPOSALS FOR HONG KONG/PERTH AND HONG KONG/DARWIN FARES AT THE SAME RATES PER MILE AS HONG KONG/EAST AUSTRALIA FARES, CPA STATED THAT THEY WISHED TO RETAIN
THE SAME RELATIVITY AS AGREED IN JANUARY.
11. AGAINST THIS BACKGROUND, WE AND CPA ARE NOT SURE OF THE NEED TO ATTEND THE TALKS ENVISAGED IN THE TEL UNDER REF, PROVIDING THAT THE DISCUSSIONS WILL NOT TEAD TO AMENDING THE CPA/EA
AGREEMENT OUTLINED ABOVE. MUCH WILL DEPEND ON THE AGENDA
AND WHETHER ROWLAND WILL BE SUPPORTED BY JEA FARES EXPERTS.
IF CAPACITY OF ASEAN AIRLINES (AND ESPECIALLY THAT OF SIA
ON SINGAPORE/AUSTRALIA) IS TO BE DISCUSSED, THEN THIS COULD
HAVE IMPLICATIONS FOR THE HONG KONG/EAST AUSTRALIA ROUTE BY
WAY OF TRAFFIC BENDING OVER THIRD COUNTRY POINTS ON DAYS NOT
COVERED BY DIRECT HONG KONG/EAST AUSTRALIA SERVICES. WE
SHOULD THEREFORE BE GRATEFUL IF YOU WOULD PROVIDE FURTHER
INFORMATION ON WHAT IS TO BE DISCUSSED DESK3Y 180200Z. MACLEHOSE
FILES
MABO
URGD
SPD
MISS BROWN MR MURRAY
[COPIES SENT
CADIDOT