CONFIDENTIAL
28.
This understanding would be seriously undermined if British Airways were to have fewer than 10 services a week between London and Hong Kong in 1980, rising to 11 in 1981 or 1982.
Unless BA could find some other way of operating three or four services a week through Bangkok without a major increase in the capacity devoted to that market, (eg by combining Bangkok with some other point or points the Thais would have good grounds for claiming that we had failed to implement the spirit. if not the letter of our recent under.
is
standing. The only combination that can be envisaged at present with Manila; but A service which combined Bangkok with Manila seems unlikely to be viable in the near future and it is unlikely that the frequency to Manila will exceed two services per week for the next few years.
29.
Any renegotiation of the arrangements referred to in paras 26. and 27 above would inevitably be to our disadvantage
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*
30. The effect on our recent
t deal with the Thais would be much the same whether the competing carrier were BCAL, CPA, Skytrain, or whole plane charter operator.
be expected to sixth freedom This could have services between
31. The introduction of a second British carrier on the London- Hong Kong route whichever it might be could also reduce Thai International's carriage of traffic on સ basis, over Bangkok, between Hong Kong and London. a sharp impact on their profitability since their Bangkok and London depend to a significant extent on the carriage of passengers and (perhaps even more important) cargo on the cabotage route. For this reason, while we have pointed out to them that the carriage of such traffic is contrary to the ASA we have not cracked down on them. The Thais might therefore grumble that the jutroduc- tion of a second carrier represented a breach of the gentleman's understanding. This would sour our present excellent relations with them, It is unlikely that they would react independently in the air services field; but they might be inclined to "gang up" with Singapore in resisting the threat to their carrier's' viability that the loss of the sixth freedom traffic would entail.
Singapore
i
SIA carry 71 considerable amount of London-Hong Kong cabotage
between
32. traffic on sixth freedom basis and have recently stepped up their efforts in this field. The carriage of sixth freedom traffic between Australia and the UK has been the major bone of contention Australia and ASEAN for some months. The Singaporeans have contended that the fact that this carriage has continued so long has established a right by custom and practice, even though it is not conferved by Singapore's Air Services Agreements with the countries concerned. They might well put forward the same argument in relation to SIA'S carriage of the London-Hong Kong traffic.,
33. SIA'S sixth freedom traffic on the bottom end of the market
A
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the cabotage route is mainly at They would therefore be more affected by the introduction of whole plane charters or of a Skytrain service than by "normal" scheduled services such as BCAI 01 CPA could be expected to operate.
COMTIDENT