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3. WHEN THEY ARRIVED MITRA QUICKLY CONFIRMED THE ANG REQUIREMENT (INDEED I UNDERSTAND THEY HAVE ALREADY ISSUED TIMETABLES WHI EMBODY IT) BUT EQUALLY QUICKLY MADE IT CLEAR THAT HE WOULD NOT CONCEDE CPA'S AUCKLAND REQUIREMENT. HE FLATLY STATED THAT ANG WAS NOT INTERESTED IN ABY 5TH FREEDOM SECTORS INVOLVING HONG KONG WITHIN THE FORESEEABLE FUTURE. HE CLAIMED THAT PNG COULD
NOT CONCEDE PORT MORESBY/AUCKLAND TO CPA WITHOUT ALSO CONCEDING AUCKLAND-PORT MORESBY-HONG KONG TO NEW ZEALAND. AND HE SAID THAT HE WAS PREPARED ONLY TO CONCEDE HONG KONG-MANILA-PORT MORESBY
(WITHOUT MAN!LA/PORT MORESBY RIGHTS) TWICE WEEKLY FOR CPA AND BRUSHED ASIDE ANY SIGNIFICANCE IN THE FACT THAT CPA NOW HAD NO INTEREST WHATEVER IN MANILA. FURTHER, HE THREATENED THAT IF ANG'S REQUIREMENTS WERE NOT MET, HE WOULD ARRANGE FOR CPA TO BE DISLODGED FROM ITS FRIDAY TIMINGS AT PORT MORESBY DUE TO COME INTO EFFECT FROM 3 AUGUST. HE SEEMED UNAWARE THAT SUCH MATTERS OF TIMING ARE NOT FACTORS USED IN TRAFFIC RIGHT NEGOTIATIONS AND COULD NOT SEE THAT, IF ONE PARTY NEVERTHELESS CHOOSES TO USE SUCH LEVERS, THE SAME LEVERS BECOME AVAILABLE TO THE OTHER PARTY. 4. SINCE ANG IS NOT LIKELY AGAIN TO BECOME A DEMANDEUR IN THE FORESEEABLE FUTURE, I DEEMED IT IMPRUDENT TO MENTION CPA'S SECONDARY INTEREST IN BRISBANE SINCE IT LOOKS AS THOUGH IT WILL BE
NOW OR NEVER IN RESPECT OF AUCKLAND. I DID HOWEVER SUGGEST THAT SOME DEAL MIGHT BE WORKED OUT ON THE BASIS OF ANG GETTING ITS TWICE WEEKLY REQUIREMENTS FROM 1 JULY WHILE CPA WOULD NOT GET ITS TWICE-WEEKLY REQUIREMENT THROUGH PORT MORESBY TO
AUCKLAND UNTIL SOME LATER DATE (PERHAPS 1981). I DID NOT MENTION THE OTHER POSSIBLE VARIANT (CPA OBTAINING THE PORT MORESBY/AUCKLAND
SECTOR BLINDED) SINCE THAT UNWELCOME COMPROMISE WOULD SEEM APPROPRIATE (IF AT ALL) TO A LATER STAGE IN NEGOTIONS.
5. I DID NOT HAVE ANY STATISTICS OF TRAFFIC FLOWS WITH ME, BUT MITRA ARGUED THAT THERE WAS NOW SUFFICIENT TRAFFIC FOR A THIRD
SERVICE BETWEEN HONG KONG AND PORT MORESBY. WHEN I SUGGESTED THAT,
IF SUCH TRAFFIC WERE AVAILABLE, IT WOULD SEEM FAIR (ANG HAVING HAD 20 MONTHS UNOPPOSED OPERATION OF THE FIRST SERVICE) FOR CPA TO HAVE 20 MONTHS UNOPPOSED RUN OF THE THIRD SERVICE, MITRA
MAINTAINED THAT THE THIRD SERVICE SHOULD GO TO ANG BECAUSE A
LARGE MAJORITY OF TRAFFIC (HE CLAIMED 80 PERCENT) ORIGINATED IN
PORT MORESBY. I NATURALLY POINTED OUT THAT BOTH ENDS OF A TRAFFIC
FLOW HAVE AN EQUAL INTEREST IN IT BUT MITRA DID NOT ACCEPT THAT
BASIC CONCEPT AND EFFECTIVELY CLAIMED THAT THE INITIAL 20 MONTHS -
ADVANTAGE GIVEN TO ANG WAS NO LONGER OF ANY RELEVANCE.
2 CONFIDENTIAL