TNAG-0779-FCO40-983-Involvement-of-Hong-Kong-in-air-services-agreements-1978 — Page 22

long journey is nevertheless good.

(ii) Laker could not operate the charter service for

which they have made formal applications to the CAA

and thus the stimulus of competition from a third

carrier would not be present. We have told Laker

in confidence of the proposals and, although we have

said that we have not yet made up our minds how to

respond, we have given no grounds for optimism

that the decision will favour Laker.

(iii) The possibility of criticism from the Americans.

There is a sharp difference in concept between the

Australian proposals and the more liberal line

adopted by the Americans. The Australians do not

think that the Americans will accept their proposals

for similar arrangements on the Australia/USA

route.

traffic by American carriers through diversion from

Australia/USA/UK to the direct Australia/UK route

because the number of passengers who travel by the

former is very small; they do so for their own

reasons and price is not the major consideration.

We could come in for some criticism from the

Americans if we accepted the proposals, even if it

is no business of theirs, but HM Embassy in

There is little or no risk of loss of

Washington see no serious implications for

bilateral UK/USA air service relations.

The

Embassy believe that the US's primary concern will

probably be to use its own considerable bargaining

power to resist the introduction of similar

Pentictive timer in its own bilateral ain

E