CONFIDENTIAL
Hkk 184/1.07
B41
GPS 335
CONFIDENTIAL CYPHER CATA
FM HONG KONG 232820Z JUL
TO IMMEDIATE FOREIGN AND COMMONWEALTH OFFICE
TELEGRAM NUMBER 1843 OF 23 JULY, 1979
INFO IMMEDIATE CANBERRA.
YOUR TEL NO 549: UK/AUSTRALIA AIR SERVICES.
24 JUL. N22 23/7
See 346
1. WE APOLOGISE FOR THE CONFUSION OVER THE BALANCE OF CAPACITY
ARGUMENT (PARAGRAPH 3 OF T.U.R.). CPA HAD OMITTED TO TAKE THE
CONVERSION FACTOR INTO ACCOUNT WHEN THEY APPROACHED US DUE TO
THEIR KEY PERSONNEL INVOLVED IN THE ISSUE BEING AWAY FROM HONG
KONG. CPA HAVE NOW CONFIRMED THAT THEY DO NOT (REPEAT) NOT WISH
TO CHANGE THINKING ON THE SUBJECT AND HAVE WITHDRAWN THEIR
REQUEST FOR ACTION TO BE TAKEN REGARDING QANTAS' FOURTH
B747 SERVICE.
2. WITH REGARD TO PARAGRAPH 4 OF T.U.R., CPA ESTIMATE THE DIVERSION OF TRAFFIC TOWARDS UK/EUROPE AND U.S.A. AT 15 PER CENT. FOR THE TOTAL MARKET H.K./EAST AUSTRALIA, CPA REPORT
DECREASES IN TRAFFIC OVER THE CORRESPONDING MONTHS IN 1978,
OF 8.5 PER CENT, ZERO.6 PER CENT AND 4.2 PER CENT FOR THE
MONTHS OF FERBRUARY, MARCH AND APRIL 1979, RESPECTIVELY.
CPA SAY THAT UNDER NORMAL CIRCUMSTANCES THEY WOULD HAVE
EXPECTED TRAFFIC OVER THE PERIOD TO INCREASE BY ABOUT 10
PER CENT.
3. WE NOTE THAT YOU WERE TO CONSIDER WHAT ACTION TO TAKE
AFTER THE NEXT MEETING OF THE ASEAN ECONOMIC MINISTERS, BUT THIS HAS NOW BEEN POSTPONED INDEFINTELY (PARAGRAPH 1 OF JAKARTA TELEGRAM NUMBER 232 TO F.C.0.). CPA HAVE NOW REFILED WITH CAA A PACKAGE SIMILAR TO THEIR MAY FILING, BUT INCORPORATING AMENDMENTS TO REFLECT A 7 PER CENT INCREASE ON ACCOUNT OF FUEL COSTS. WE SHOULD BE GRATEFUL FOR
ANYTHING THAT CAN BE DONE TO BRING ABOUT THE EARLY IMPLEMENTATION
OF THE NEW FARES.
CONFIDENTAL
14. CPA HAVE