GRS 600
CONFIDENTIAL
FM F
081444Z OCT 79
TO PRIORITY MANILA
CONFIDENTIAL HRKC 184/1
MELFIVEO IN REGISTRY NO. 51
10 OF 1979
REGISTRY
Action Take
8
432
TELEGRAM NUMBER 225 OF 8 OCTOBER
INFO HONG KONG (GOVERNOR AND BCARFE).
UK/PHILIPPINES AIR SERVICES
1, DISCUSSIONS BETWEEN DELEGATIONS FROM THE UK AND PHILIPPINES TOOK PLACE IN LONDON FROM 1-4 OCTOBER AND ENDED WITH SIGNATURE OF DOCUMENTS WHICH PERMIT THE INTRODUCTION OF SERVICES BY BA AND PAL BETWEEN LONDON AND MANILA. THE TALKS WERE HELD IN A RELAXED AND FRIENDLY ATMOSPHERE.
2. AS DISCUSSIONS ABOUT THE TRUNK ROUTE SERVICES DEVELOPED, WE PRESENTED A REASONABLY BALANCED PACKAGE OF PROPOSALS. WITHIN THIS,
THERE WAS LITTLE DIFFICULTY ABOUT AGREEING TO THE ROUTES FOR EACH SIDE. THERE WERE, HOWEVER, PROBLEMS ABOUT PAL'S WISH TO TERMIN-
ATE ALL THREE OF THEIR, EUROPEAN SERVICES IN LONDON (GATWICK) IN TWO CASES INSTEAD OF AMSTERDAM AND IN THE OTHER, AS AN EXTENSION FROM FRANKFURT AND ABOUT OUR PROPOSED RESTRICTION ON FIFTH FREEDOM RIGHTS FOR PAL. THE UK-PHILIPPINES TRAFFIC DOES NOT JUSTIFY THREE SERVICES AND PAL WOULD HAVE AN INCENTIVE TO GO FOR MORE FIFTH FREEDOM TRAFFIC, TO BA'S DETRIMENT, WE THEREFORE WANTED TO RESTRICT THEM TO THE EXERCISE OF FIFTH FREEDOM RIGHTS AT AGREED POINTS ONLY TWICE A WEEK. IN ANY CASE, WE WERE NOT PREPARED TO GIVE THEM THESE RIGHTS BETWEEN THE GULF AND LONDON. THERE WAS CLEARLY DISSENSION WITHIN THE PHILIPPINE DELEGATION, WITH TIANSAY, THE LEADER, APPARENTLY HAVING DIFFICULTY IN PERSUADING PAL TO ACCEPT THE PACKAGE AS THE BEST DEAL OBTAINABLE. THERE WAS SOME ANXIETY THAT THE PACKAGE
WOULD NOT BE SALEABLE, PROBABLY BY ROMAN CRUZ, TO THE QUOTE ROYAL PALACE UNQUOTE (SIC). PAL WERE EVIDENTLY CALLING THE TUNE AND REQUIRED TO CONSULT CRUZ. DIFFICULTY IN LOCATING HIM IN MANILA CAUSED SOME DELAY. WE MADE IT CLEAR TO TIANSAY THAT WE WOULD NOT ACCEPT ANY TINKERING WITH THE PACKAGE AND THIS MAY HAVE HELPED HIM WITH HIS TEAM, BECAUSE, PRESUMABLY WITH CRUZ'S AGREEMENT, TIANSAY FINALLY ACCEPTED IT, INCLUDING THE FIFTH FREEDOM RESTRICTIONS. PAL WILL PROBABLY OPERATE THREE SERVICES PER WEEK FROM THE OUTSET AND BA TWO.
CONFIDENTIAL
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