TNAG-0779-FCO40-983-Involvement-of-Hong-Kong-in-air-services-agreements-1978 — Page 144

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See. 344

TO IMMEDIATE HONG KONG TELNO 470 OF 19 JUNE YOUR TELNO 738: UK/AUSTRALIA AIR SERVICES

1. THE AUSTRALIANS BELIEVE THAT LOW FARES COULD BE MADE POSSIPLE

ON THE AUSTRALIA-HONG KONG ROUTE AS WELL AS THE AUSTRALIA-LONDON ROUTE (WHICH YOU SAID AT THE MEETINGS ON 7 MARCH YOU WERE ANXIOUS TO SEE), AND THEY BELIEVE THAT THESE WOULD GENERATE

SUBSTANTIAL NEW TRAFFIC. THEY DO NOT ENVISAGE THAT EITHER CPA OR GANTAS WOULD FLY QUOTE EMPTY UNQUOTE. THEIR CALCULATIONS INDICATE HIGH SEAT FACTORS ON THE E.AUSTRALIA-HONG KONG ROUTE. WITH THE CONTINUATION OF THE PRESENT CPA MONOPOLY ON THE HONG KONG-PERTH ROUTE, AND THE NEW TRAFFIC GENERATED BY LOWER FARES, THE POSITION COULD BE BETTER THAN YOU EXPECT.

2. IN VIEW OF THE VERY CONSIDERABLE DIFFERENCE BETWEEN THE AUSTRALIAN FORECASTS AND YOUR PROVISIONAL REACTIONS, WE THINK IT. WOULD BE USEFUL IF YOU WERE NOW TO INFORM THE TOP MANAGEMENT OF CPA, IN CONFIDENCE, OF THE AUSTRALIAN PROPOSALS AND ARRANGE FOR A CPA REPRESENTATIVE TO TRAVEL HERE URGENTLY FOR DISCUSSIONS ABOUT TRAFFIC FORECASTS, FARES ETC. IF YOU WISH TO SEND A REPRESENTATIVE TOO HE WOULD, OF COURSE, BE WELCOME. WE APOLOGISE FOR THE SHORT NOTICE.

3. MEANTIME, YOU MAY FIND THE FOLLOWING FURTHER INFORMATION USEFUL: A. THE ONLY OTHER OPTION WHICH, AT THE END OF THEIR STUDIES, THE AUSTRALIANS THOUGHT WORTHY OF SERIOUS CONSIDERATION WAS THE

INTRODUCTION OF CHARTERS TO CATER FOR THE MASS MARKET. THEY BELIEVE

THAT THIS WOULD HAVE HAD THE SAME EFFECT ON INTERMEDIATE CARRIERS

AND STOPOVERS ON THE ROUTE.

Good.

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