CONFIDENTIAL
FM HONG KONG Ø604852 JUL 82
TO PRIORITY FCO
TELEGRAM NUMBER 721 OF 6 JULY
INFO SINGAPORE
CONFIDENTIAL
YOURTELNOS 502 AND 4861 UK/SINGAPORE AIR SERVICES.
m
AS REGARDS FIRST TUR, SIA DID CONFIRM THEIR OFFER TO WITHDRAW FROM
BKK/HKG SECTOR.
2. CPA PROPOSED:
(A) AN EXCHANGE WHEREBY CPA WOULD OPERATE A DAILY B747 HKG-SIN-JKT
V V (SIN-JKT V V BLINDED) AND A DAILY L1811 HKG-SIN V V: SIA WOULD OPERATE A DAILY B747 SIN-HKG-TPE-TYO V V (HKG-TPE AND HKG-T YO SECTORS BLINDED) AND A DAILY A300/DC10 SIN-HKG V V
(B) AS (A) ABOVE PLUS A MODEST BALANCED EXCHANGE OF 5TH FREEDOM RIGHTS. AN AGREED FORMULA FOR CALCULATING 5TH FREEDOM EARNINGS WOULD
BE ESTABLISHED AND THE AIRLINES WOULD MEET ANNUALLY TO DECIDE
WHAT LEVEL OF 5TH FREEDOM EARNINGS COULD BE JUSTIFIED. SIA WOULD NOT
HOWEVER BE PERMITTED TO CHANGE ANY OF THE 5TH FREEDOM POINTS IT CURRENTLY SERVES FOR OTHERS. THE STARTING POINT WOULD BE AN AGREED EXCHANGE OF US DOLLARS 12M FOR 5TH FREEDOM OPPORTUNITIES FOR EACH AIRLINE. THE BALANCE OF SIA 5TH FREEDOM OPERATIONS WOULD BE WITHDRAWN BY 1 SEPTEMBER 1982.
SIA'S RESPONSE WAS AS REPORTED IN PARA 1 OF OURTELNO 694.
3. WE AND CPA ARE QUITE PREPARED TO CONSIDER ACCESS TO LOS ANGELES FOR SIA ON THE LINES YOU PROPOSE IF THIS WOULD HELP BREAK
THE LOGJAM.
4. AS REGARDS SECOND TUR, ALTHOUGH THE EXERCISE OF RIGHTS BY CPA ON THE SIN-PER SECTOR WOULD GO SOME WAY TOWARDS CLOSING THE 5TH FREEDOM EARNINGS GAP, CPA ARE NOT RECEPTIVE TO THIS PROPOSAL BECAUSE (A) ANY SIN-PER V V EARNINGS WOULD NOT, BY THEMSELVES, SIGNIFICANTLY ALTER THE PRESENT MASSIVE IMBALANCE.
(B) THERE REMAINS THE PROBLEM OF SECURING THE OTHER END OF THE RIGHTS AND, IF OUR DEALINGS WITH THE AUSTRALIANS ARE ANY GUIDE,
THIS WILL BE NO EASY TASK.
(C) THE CAPACITY PROVIDED BY SIA, QEA AND AI ( 8 X B747 WEEKLY) IS MORE THAN ADEQUATE FOR THE MARKET DEMAND. CPA HAVE NO PLANS TO OPERATE ON THIS SECTOR BUT, IF THE OPPORTUNITY ARISES AND THE PRICE IS RIGHT, WOULD LIKE TO PICK UP THE RIGHTS FROM THE AUSTRALIANS FOR POSSIBLE USE IN THE LONG TERM.
5. WE SHOULD BE PLEASED TO DISCUSS SINGAPORE ISSUES WITH STEVENS HERE ON 22 JULY ALTHOUGH WE SEE NO BASIS FOR A QUICK SETTLEMENT. AS REGARDS TIMING OF A FURTHER ROUND OF TALKS, KEEP (DCA) WILL BE AVAILABLE IN LONDON TO REPRESENT US 10-13 AUGUST AND/OR WEEK
BEGINNING 16 AUGUST. IT WOULD BE MOST INCONVENIENT TO SEND A
REPRESENTATIVE TO LONDON JUST FOR TALKS WITH THE NEPALESE (KATHMANDU TELNO 99). GRATEFUL THEREFORE IF THESE TALKS COULD BE ARRANGED TO TAKE PLACE IMMEDIATELY BEFORE OR AFTER THE SINGAPORE TALKS.
YOUDE
[COPIES SENT TO CAIR/DOT]
may or
пр
LIMITED
MAED
SEAD
HK&GD
MR ADAMS
CONFIDENTIAL
THIS TELEGRAM
WAS NOT ADVANCED