TNAG-0778-FCO40-982-Involvement-of-Hong-Kong-in-air-services-agreements-1978 — Page 127

RK PORT MORESBY

GR 665

CYPHER/CAT A

FM HONG KONG 101109%

CONFIDENTIAL

973

201

HKK 184/1

Hious Com erên es

Raslo ADVANCE COPY

Pones)

INJEK

16 فلر

TO PRIORITY F.C.O TELNO.452 OF 10 APRIL 78,

M/R

INFO PORT MORESBY, HONG KONG GOVT OFFICE LONDON.

D.T. TELNO. ALLOT 56 U.K/PNG AIR SERVICES.

↑

1. AT THE BRIEFING MEETING HELD ON 3 APRIL, BLUCK (CPA) PROVIDED A DETAILED EXPLANATION REGARDING THE POSSIBILITY OF CPA LEASING ADDITIONAL TRISTARS FROM EASTERN AIRLINES.

2. THE POSITION IS THAT THE CURRENT FLEET PLAN PROVIDES FOR 8707'S

TO BE IN SERVICE UNTIL 1984. FOR A VARIETY OF REASONS, BUT PRINCIPALLY FOR ECOLOGICAL AND ECONOMIC ONES, CPA BELIEVE IT AN DESIRABLE TO RETIRE THESE AIRCRAFT AS EARLY AS POSSIBLE. EXCEPTIONAL OPPORTUNITY HAS ARISEN WITH AN EASTERN DECISION TO PURCHASE AIR-BUS AIRCRAFT, MAKING ABOUT TEN OF THEIR TRISTARS SURPLUS TO REQUIREMENT. EASTERN ARE WILLING TO LEASE TO CPA FIVE ADDITIONAL TRISTARS OVER A TWO YEAR PERIOD COMMENDING END 1978, AND THIS WOULD RESULT IN ALL B707'S BEING RETIRED BY THE END OF 1980. AT THAT TIME, CPA'S FLEET WOULD COMPRISE

TWO B747 AND TWELVE TRISTARS, FIVE BEING LEASED FROM EASTERN,

3. CPA BELIEVE THEY HAVE RESOLVED INTERNAL PROBLEMS IN TERMS OF ECONOMICS AND FINANCE AND ALSO THE VERY IMPORTANT TECHNICAL

AREAS, PARTICULARLY OF AIR-CREW TRAINING, ENGINEERING SUPPORT, ETC. BLUCK EXPECTED THAT VERY SHORTLY THERE WOULD BE A MANAGEMENT RECOMMENDATION TO CPA'S BOARD IN FAVOUR OF THE ARRANGEMENT AND THAT BY THE END OF APRIL THERE WOULD BE A BOARD DECISION.

4. CPA APPRECIATE THAT IN LARGE PART THIS DECISION DEPENDS

ON OVERCOMING SOME VERY IMPORTANT GOVERNMENTAL ISSUES, INCLUDING

TRAFFIC RIGHTS. IN DUE COURSE, THEY PROPOSE TO PROVIDE MORE DETAILED PROPOSED IN-SERVICE DATES AND THE PROGRESSIVELY

IF THE EXPANDING ROUTES ON WHICH THESE AIRCRAFT WILL BE USED,

TRAFFIC RIGHTS ISSUES ON A PARTICULAR ROUTE PROVE INSURMOUNTABLE WITHIN THE TIMESCALE OF THE PROPOSED EASTERN LEASING DEAL, OPA WOULD HAVE TO CONSIDER KEEPING ONE OR TWO BYCT'S IN THEIR FLEET

BEYOND 1986. ·