TNAG-0779-FCO40-983-Involvement-of-Hong-Kong-in-air-services-agreements-1978 — Page 112

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on one route, we could be faced with demands from other countries

We doubt however whether this would

for similar, arrangements.

happen on a significant scale. BA carry a lot of sixth freedom

traffic on their trunk routes, especially from other European

centres. They are not worried that other European countries will

seek to restrict this traffic significantly, in reaction to the Australian proposals, because some of their airlines, eg SAS and KLM, follow the same practice. Developing countries, especially in Latin America, already seek to restrict fifth freedom rights and the Australian proposals will not therefore be a precedent for

them.

INTERNATIONAL POLITICAL RELATIONS

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On the political side, Australia would be obliged to re-negotiate

her Air Service Agreements, in respect of the route to the UK, with Singapore, Malaysia, Thailand, India and a number of European countries.

Hong Kong is also concerned. Annex A describes

the likely reaction of the countries affected.

It is clear that the

main implication for both Australia and the UK is Singapore. SIA's services to London and Australia will be considerably reduced and Singapore's tourist trade is likely to suffer, at least in the short term, because there will be fewer passengers making short

stops en route to Europe. On the other hand, there is the counter- inducement of low fares between Australia and Singapore which should

It is fairly certain, however, encourage more Australian tourists.

that Singapore will be seriously upset at the immediate loss which

she will suffer. It is for the Australians to make the running

with Singapore.

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Replace 17 + 18 by new perus

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17 a + 18

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Of the other countries, only Malaysia seems likely to complain

but overall in air service terms, she could in fact gain, at the

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