$5
CONFIDENTIAL
356
GRS 345
CONFIDENTIAL
DESKBY 131000Z F CO
FM HONG KONG 130925Z JUL 79
TO IMMEDIATE F C O
TELEGRAM NUMBER 997 OF 13 JULY
INFO PRIORITY KUALA LUMPUR
HER 184/1
P.A.
16 JUL, 79-
по эпо
INFO ROUTINE HONG KONG GOVERNMENT OFFICE LONDON
YOUR TELNO 527: UK/MALAYSIA AIR SERVICES.
1. WE APPRECIATE THAT THERE ARE WIDER BRITISH POLITICAL INTERESTS IN THE FORTHCOMING NEGOTIATIONS WITH THE MALAYSIANS. IN THE CIRCUMSTANCES WE WOULD ACCEPT YOUR JUDGMENT ON THE LEVEL OF CONCESSIONS TO BE MADE TO THE MALAYSIANS. HOWEVER, WE WOULD VERY MUCH LIKE FIFTH FREEDOM CONCESSIONS TO BE LIMITED TO TAIPEH ONLY IF AT ALL POSSIBLE AND IF TOKYO HAS TO BE CONCEDED AS WELL, WE PRESUME THAT THERE WILL BE NO INTENTION TO GO BEYOND THE CAPACITY LEVEL WITH RESPECT TO FIVE A300'S PER WEEK.
2. THE TOKYO CONCESSION HAS IMPLICATIONS FOR RELATIONS WITH THE JAPANESE. A LARGE PROPORTION OF CPA'S EARNINGS OUT OF JAPAN ARISES OUT OF FIFTH FREEDOM EARNINGS AND IF MAS WERE ELIMINATED FROM THE TOK YO/HONG KONG SECTOR WE WOULD EXPECT A MUCH MORE SIGNIFICANT PORTION OF THE TRAFFIC TO FALL TO CPA RATHER THAN THE
25 PERCENT YOU HAVE ESTIMATED. THIS WOULD HAVE THE EFFECT OF IMPROVING THE 3RD/4TH AND 5TH FREEDOM EARNINGS BALANCE BY CPA OUT OF JAPAN. ROGERS HAD EXPRESSED CONCERN OVER THE IMBALANCE IN HIS LETTER OF 3 APRIL 1979, TO KEEP.
3. WE NOTE YOUR INTENTION TO TAKE A FIRM LINE ON MAS'S DISREGARD OF
OAA AGREED FARE LEVELS (PARA 8 OF T.U.R.). WE CAN CERTAINLY CONFIRM THAT SUCH DISCOUNTING IS STILL CONTINUING AND THE CRA REPRESENTATIVE WILL BE ABLE TO PROVIDE CONCRETE EXAMPLES AT THE BRIEFING MEETING, WE DOUBT, HOWEVER, WHETHER MALAYSIAN UNDER- TAKINGS ON THIS WOULD BE HONOURED JUDGING FROM PAST EXPERIENCE.
CONFIDENTIAL
/4.WE HAVE
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