TNAG-0779-FCO40-983-Involvement-of-Hong-Kong-in-air-services-agreements-1978 — Page 20

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 of them; this could only be satisfactorily done through

scheduled services.

4

In discussion, the Australians were flexible on a number

of points which we and 3A put to them. They agreed that the

new low fare should be available on an individual on demand

basis, instead of part charter, in the hands of wholesalers. They were receptive to the proposal that BA flights might call at two Australian cities instead of the one originally envisaged, subject to examination of the effect on costs and agreed to consider the related issue of revenue pooling by BA and Qantas. They were willing to consider separate arrangements for cargo and for Concorde, which would not be able to operate viably to Australia without the ability to pick up and set down passengers en route. They also agreed to consider further how to accommodate our need to continue

BA's services between the UK and New Zealand via Australia

which are politically important to us and which are

incompatible with the Australian scheme.

Advantages to the UK of the Australian Scheme

5 These are as follows:

(i) UK and Australian consumers will benefit from the

(11)

A

new low fares.

ters are expected to increara

X