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(iv) We have considered with BA the possibility that
(v)
this kind of arrangement may spread elsewhere in
the world.
Having accepted it on one route, we
could be faced with demands from other countries
for similar arrangements. We doubt however whether
this would happen on a significant scale.
BA are
content to take this risk, Leven though they earn
6% of their revenue (£40m) from 5th freedom non
end-to-end traffic.
The most serious possible disadvantage if we accept
the Australian scheme is if third countries react
adversely. All the mid-point countries in S E Asia
and India would be affected in varying degrees.
Except for Singapore, the Australians argue that
the scheme will bring compensating advantages ot
offset any loss of passengers, of tourist revenue
and of frequency of flights to Australia and to
the UK, which result from the exclusion of 5th/6th
freedom traffic, rights and reductions of services.
>
Intermediate countries reaction however will depend
on how seriously they think they will be affected
and how responsive they are to appeals eg to
ASEAN solidarity, to North/South considerations
from those genuinely affected above all, from
Singapore.
7. Implications for third countries
(a) Air services/Tourism
Annex A escribes the effect on air services/tourist
interests of min.
intries.
Australia would
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