TNAG-0779-FCO40-983-Involvement-of-Hong-Kong-in-air-services-agreements-1978 — Page 131

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The Australians accept that the implications of their proposals for third countries en route to London, particularly the S E Asian countries, will face them with severe political problems. However, the Australian Cabinet regard the internal political pressures for

lower fares as being of over-riding importance.

5 They examined the other low fare options:

(i) the introduction of a single coupon end-to-end

(ii)

fare at a lower level than existing fares without

disturbing other aspects of their air service

arrangements.

The introduction of whole plane charters of the

Laker type.

They rejected (i) on the grounds that it would bring with it political odium and that without reduction of the capacity of the present sixth freedom operators neither BA nor Qantas would be able to attain sufficiently high levels of aircraft utilisation

They rejected (ii) to make a fare at an acceptably low level viable. on the grounds that this would enable the charters to cream off the

low fare traffic thus increasing the problems of the scheduled

carriers in maintaining a reasonable level of all-the-year round on- demand services. Also there were a number of widely separated important traffic centres in Australia and it was vital that the

new low fares should be available to all these traffic centres; this

could only be satisfactorily done through scheduled services.

6

The implications of these proposals.can be grouped under three

headings:

economic, political and Laker Airways.

1