TNAG-0779-FCO40-983-Involvement-of-Hong-Kong-in-air-services-agreements-1978 — Page 102

CONFIDENTIAL

TO CANBERRA (AN INCREASE IN THE NUMBER OF SHORT HOLIDAY VISITS BY AUSTRALIANS TO BALI), THIS WOULD HAVE TO BE SET AGAINST THE

LOSS OF STOPOVER TOURISTS, FOR EXAMPLE ON THE PRESENT QANTAS SERVICE THROUGH INDONESIA. GARUDA'S SERVICES TO HONG KONG, WHICH ARE IMPORTANT TO THEM, COULD ALSO BE AFFECTED BY THE

CONSIDERATIONS IN HONG KONG TELNO 738. WE THINK THE FALANCE

WOULD BE MARGINAL EITHER WAY, IN WHICH CASE POLITICAL FACTORS

WOULD PREDOMINATE. IF INDONESIA AGREED AT THE START TO OPPOSE

THE SCHEME FOR REASONS OF ASEAN SOLIDARITY, THEN THEY MIGHT WELL

ADD IT AS ONE MORE FACTOR IN THE BALANCE OF THEIR ATTITUDES

TO EAST/WEST AND NORTH/SOUTH. MORE DIRECTLY, IF THEY AGREED TO OPPOSE, THIS COULD PRESUMABLY SPILL OVER ON TO THE UK/INDONESIA

AIR SERVICES DISCUSSIONS DUE IN AUGUST, AT WHICH THE QUESTION OF OVERFLYING RIGHTS IS INDONESIA'S STRONGEST, EVEN IF UNPLAYED, CARD. IF INDONESIA TRIED TO OBSTRUCT OVERFLIGHT FOR THE

PROPOSED NEW UK/AUSTRALIA AIR SERVICES, THEN THE SCHEME'S ATTRACTION MIGHT BE LESSENED.

3. WE CONCLUDE THAT, ALTHOUGH, IF LEFT ALONE, INDONESIA MIGHT

BE NEUTRAL IF NOT FAVOURABLE, THEY ARE LIKELY TO FOLLOW SINGAPORE'S LEAD, AND MIGHT THEN HAVE THE POWER TO DAMAGE US AND GOTHE AUSTRALIANS.

O'BRIEN

FILE S

MAED

SEAD

SWPD

HKGD

SAD

MED

NAD

SAM D

MISS BROWN

MR.BUTLER

MR.MURRAY MR.CORTAZZI

[COPIES SENT TO CAD/DOT]

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