CONFIDENTIAL
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BETWEEN THE TWO AIRLINES ON SERVICES BETWEEN HONG KONG AND
SINGAPORE AND NO SHORTAGE OF COMPETITION FOR CATHAY ON OTHER
SERVICES TO AND FROM HONG KONG.
4. PASSENGERS PREFER NON-STOP SERVICES WHEREVER POSSIBLE, AND AS
TRAFFIC GROWS IT BECOMES LESS AND LESS NECESSARY TO RUN QUOTE BUS-
STOP UNQUOTE SERVICES WHICH ARE SLOWER AND LESS CONVENIENT.
PASSENGERS WILL THEREFORE BENEFIT IF SIA CEASE TO COMBINE HONG KONG
SERVICES WITH OTHER POINTS SUCH AS BANGKOK, TAIPEH AND TOKYO.
5. IT IS DIFFICULT TO SEE HOW THE SINGAPORE AUTHORITIES COULD WHIP
UP MUCH PUBLIC SUPPORT FOR THE CONTINUED RIGHT OF SIA TO CARRY
LARGE NUMBERS OF HONG KONG ORIGINATING PASSENGERS TO OTHER POINTS
IN SOUTH EAST ASIA ESPECIALLY WHEN ONE CONSEQUENCE MUST BE FEWER
DIRECT SERVICES FROM SINGAPORE TO THESE POINTS.
6. YOU WILL NOT WISH TO REFER PUBLICLY TO ARBITRATION. THE
PROCEDURES TO BE FOLLOWED ARE SET OUT IN ARTICLE 13 OF THE ASA, BUT
THERE HAVE BEEN ONLY A HANDFUL OF ARBITRATIONS IN CIVIL AVIATION
HISTORY, SO THAT THE CONSEQUENCES ARE UNPREDICTABLE. IN AT LEAST
ONE CASE THE SUCCESSFUL PARTY DID NOT LONG ENJOY THE FRUITS OF
VICTORY OF ARBITRATION SINCE THE LOSER PROMPTLY DENOUNCED THE ASA.
LIM HOCK SAN IS WELL AWARE OF THIS POSITION.
7. SINGAPORE IS VERY IMPORTANT TO BA'S AUSTRALIAN SERVICES, BUT
LONDON AND HONG KONG ARE PROBABLY EVEN MORE IMPORTANT TO SIA WHO
IN ANY CASE OUTEARN THE UK AIRLINES BY MORE THAN 2:1 ON BOTH
ROUTES. ON BALANCE THEREFORE WE BELIEVE THAT SIA AND THE SINGAPORE
AUTHORITIES WILL HAVE TO COME TO TERMS SOONER OR LATER UNLESS THEY
CAN OBTAIN SATISFACTORY ALTERNATIVE ROUTEINGS FOR ADDITIONAL
TRANSPACIFIC SERVICES. GIVEN THE IMPORTANCE OF HONG KONG
ORIGINATING TRAFFIC ON THEIR EXISTING SERVICES WE JUDGE THAT THIS
WILL BE DIFFICULT TO ACHIEVE.
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