TNAG-0779-FCO40-983-Involvement-of-Hong-Kong-in-air-services-agreements-1978 — Page 115

IMPLICATIONS FOR THE COUNTRIES AFFECTED

AND THEIR LIKELY REACTIONS

ANNEX A

SINGAPORE

There are two aspects. First, the ability of through passengers,

particularly from Australia, to stop over in Singapore for say a

couple of days and continue their journey with the same carrier

at a through preferential fare will be removed. This will

significantly affect the tourist trade in Singapore.

Secondly, it

will be necessary for both countries to impose an appreciable cut

on SIA's services (SIA's operations make a significant contribution

to the Singapore economy). Out of London, these are likely to be

reduced from a daily service to two or three a week and the

Australians propose considerably to reduce services between Singapore

They hope to arrange the introduction of cheap

and Australia.

fares between Australia and Singapore to encourage the growth in

tourist trade from Australia for stays of longer then the present

one or two days. It is fairly certain, however, that Singapore

will be seriously upset at the immediate loss which she will

suffer.

MALAYSIA

2 Malaysia will lose the ability legally to carry through traffic

at the new low fare from Australia to Europe. Malaysian Airline System (MAS) will however gain from cuts in the SIA services to London, because SIA will be much less able to carry traffic from

Malaysia to the UK over Singapore. MAS will also gain traffic from

Qantas' exclusion from the Kuala Lumpur-London sector. It will not

be necessary to cut the existing two services per week operated from

London by MAS. The most serious difficulty is the risk that the

Malaysians will see in our agreement with Australia an attempt to deny them the opportunity they are seeking for the expansion of MAS.

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