RESTRICTED
FM HONG KONG
TO IMMEDIATE FCO
TELNO 682
OF 040747Z MAY 93
INFO IMMEDIATE DOT, WASHINGTON
DOT FOR IAD
RESTRICTED
لاک
HICC 181/21
RECE
STRY
{S MAT 1993
DESK C INDEX
on Tal
3
(6)
025373
MDHIAN 9492
YRTELNO 351 AND OUR TELNOS 619 AND 633: HONG KONG/US AIR SERVICES: ASA SEPARATION
1. OUR POSITION GENERALLY REMAINS AS SET OUT IN PARA 2 OF SECOND TUR. BUT WE ARE SOMEWHAT ENCOURAGED BY GRETCH'S REMARKS, WHICH WE CONSTRUE AS SUGGESTING THAT THE US CARRIERS WOULD ACCEPT OUR US ROUTE 3 PROPOSALS IN EXCHANGE FOR AN IMPROVED OFFER FROM US ON US ROUTE 8.
2. WE HAVE CONSIDERED THE POSITION AS IT WAS LEFT IN MARCH 1992. INSOFAR AS PASSENGER FIFTHS ARE CONCERNED, WE HAVE ON US ROUTE 3 ALREADY OFFERED US CARRIERS THE FLEXIBILITY TO SERVE KOREA INSTEAD OF JAPAN ON A DAILY SERVICE, AND WE HAVE DOUBLED THE NUMBER OF FIFTHS AVAILABLE BEYOND HONG KONG TO SINGAPORE AND BANGKOK (ALTHOUGH THAT INCREASE MAY ALTERNATIVELY BE CONVERTED TO ALL-CARGO FIFTHS REFERRED TO IN PARA 3 BELOW). GIVEN THAT THE RECIPROCAL FIFTH FREEDOM RIGHTS WOULD BE OF LITTLE OR NO VALUE TO HONG KONG CARRIERS, WE BELIEVE OUR OFFER TO BE ALREADY GENEROUS, AND WE ARE NOT ABLE TO IMPROVE IT.
3. ON ALL-CARGO FIFTHS, THE DIFFERENCE BETWEEN THE TWO SIDES IS LESS AND IS ESSENTIALLY ONE OF FLEXIBILITY. OUR OFFER OF SEVEN FIFTHS TO BANGKOK WAS REJECTED BY THE US WHO WANTED FIVE FIFTHS
TO EACH OF TWO POINTS TO BE CHOSEN IN KOREA AND SOUTH EAST ASIA. ALTHOUGH THE SAME CONSIDERATION LARGELY APPLY AS FOR PASSENGER FIFTHS, WE ARE PREPARED IN THE INTERESTS OF SECURING A DEAL WELL IN ADVANCE OF 1997 TO DISCUSS ALTERNATIVE FORMULATIONS WITH THE AMERICANS, BUT WE MUST STRESS THAT SUCH DISCUSSIONS WILL NEED TO FOCUS ON WIDENING THE VARIETY OF ALL-CARGO FIFTHS AVAILABLE RATHER THAN INCREASING THEIR NUMBER. AND, AS THE AMERICANS MUST APPRECIATE, A NUMBER OF POINTS THAT ARE PARTICULARLY SENSITIVE FOR CPA ARE NOT NEGOTIABLE. ANY AGREEMENT ON SUCH RIGHTS WOULD OF COURSE BE SUBJECT TO SATISFACTORY RESOLUTION OF ALL THE OTHER OUTSTANDING ISSUES IN THE SEPARATION EXERCISE.
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