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4. AS REGARDS B, DOT WOULD HAVE REGARDED IT AS A GOOD BARGAIN TO ACCEPT THE INCREASE TO A DAILY FREQUENCY ON THE TRANSPACIFIC ROUTE IN EXCHANGE FOR FREEZING SIA'S CAPACITY ON ALL OTHER ROUTES UNTIL SAY 31 MARCH 1983. HOWEVER, IN DEFERENCE TO HONG KONG'S VIEWS, DOT REFUSED TO ACCEPT ANY COMMITMENT BEYOND 5X747 ON THE SIN-HKG~HNL- SFO ROUTE (THE 5TH FREQUENCY COMING ON IN APRIL 1980). THEY (DOT) SAID HOWEVER THAT THEY DID NOT EXPECT THEY WOULD RAISE ANY OBJECTIONS WHEN THE TIME CAME QUOTE PROVIDED IN THE MEANTIME THERE HAD BEEN A SIGNIFICANT CLOSING OF THE GAP IN EARNINGS BETWEEN SIA AND CPA CN ROUTES 2 OF THE RESPECTIVE ROUTE SCHEDULES, AND PROVIDED (THEY) DID NOT AT THAT TIME EXPECT THAT THE INCREASE TO A DAILY FREQUENCY WOULD SUBSTANTIALLY AFFECT AN OPERATION BY A UK CARRIER ON A COMPAR-
ABLE ROUTE UNQUOTE.
5. THE WHOLE DEAL IS CONTINGENT ON THE SINGAPOREAN GOVERNMENT GRANT- ING THE ADDITIONAL RIGHTS FOR WHICH WE HAD ASKED ON UK ROUTE 2. HOWEVER, THIS IS PRESENTED IN THE LETTER AS A STEP TOWARDS GREATER EQUALITY OF EARNINGS AND IS THEREFORE TO BE A PERMANENT FEATURE OF THE ASA, TO BE IMPLEMENTED THROUGH AN EXCHANGE OF DIPLOMATIC NOTES.
6. THE ONLY VERY MINOR CONCESSION THAT DOT MADE WAS TO AGREE TO LIMIT THE FREQUENCY THAT CPA WOULD OPERATE ON EACH OF THE NEW SECTORS 1.E. VIETNAM-SINGAPROE, E MALAYSIA-SINGAPORE AND SINGAPORE- PERTH TO FOUR SERVICES WEEKLY WITH AIRCRAFT OF CAPACITY UP TO AND INCLUDING THAT OF THE TRISTAR. THIS WAS TO AVOID THE EMBARRASSMENT THAT WOULD ENSUE IF CPA HAD RIGHTS TO MOUNT HIGHER FREQUENCIES THAN - SIA, AS THIRD/FOURTH CARRIER ON THE SAME SECTORS, WAS ABLE TO MOUNT: AND SINCE THERE SEEMS NO LIKELIHOOD OF CPA BEING ABLE TO OR EVEN WANTING TO MOUNT MORE THAN FOUR TRISTAR SERVICES A WEEK ON ANY OF THESE SECTORS IN THE FORESEEABLE FUTURE, DOT FELT THEY WERE GIVING NOTHING AWAY.
7. AS REGARDS CAPACITY GENERALLY, DOT WENT BEYOND WHAT HONG KONG HAD ASKED FOR AND TIED SIA TO THE CAPACITY NOW AGREED DURING THE NEXT THREE YEARS, WITHOUT ANY PROVISION FOR ESCALATION, WHILE APART FROM THE MINOR RESTRICTIONS IN PARA 6 ABOVE CPA ARE LEFT ENTIRELY FREE UNLESS AND UNTIL THEIR EARNINGS REACH THE LEVEL OF THOSE ACHIEVED BY SIA. THIS FOLLOWS THROUGH ROGER'S STATEMENT TO PILLAY. AS FAR BACK AS SEPT. 1975 (REPORTED IN SAVING TEL 2 OF 19 SEPT 1975) THAT SIA MUST EXPECT TO STAND STILL WHILE CPA, AND LIKEWISE BA,
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