TNAG-0779-FCO40-983-Involvement-of-Hong-Kong-in-air-services-agreements-1978 — Page 19

to keep fares down and still maintain an adequate frequency

of service to meet the on demand need at all the main

Australian cities and at the same time make a profit. The

Australians explained the great domestic political

importance attached by their Ministers to a cheap fare

policy particularly to meet the needs of the VFR (visiting

friends and relations) traffic which tends to come mostly

from the middle and lower income groups. (70% of the traffic

on the UK/Australia route originates in Australia and a

vastly higher proportion of Australians want to visit the UK

than vice versa.)

3 The Australians explained why they had rejected the other

low fare options:

(i)

the introduction of the new single coupon cheap

end to end fare now proposed without disturbing

other aspects of their air services arrangements.

This had been rejected on the grounds that, unless

the present 6th freedom operators' capacity was

reduced, neither BA nor Qantas would secure a

big enough share of the traffic available to make

viable the really cheap fare they want. The single

coupon fare would anyway prevent stopovers, and

so damage South-East Asian tourist interests.

would thus attract, without the underlying

It

rationale of the favoured alternative, the same or

nearly the same objections.

(ii) The introduction of whole plane charters of the

Laker tme.

wul: enable

This had been rejected becaure it

chans