TNAG-0779-FCO40-983-Involvement-of-Hong-Kong-in-air-services-agreements-1978 — Page 30

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SIA will be much less able to carry traffic from Malaysia

to the UK over Singapore. MAS will also gain traffic from

Qantas' exclusion from the Kuala Lumpur-London sector and

It if Qantas come off the Australia-Kuala Lumpur sector.

will not be necessary to cut the existing two services per

week operated from London by MAS. The effect on MAS could be a net gain in revenue of some £31 million p.a. On the

other hand there could in the short term at least be some

loss in toquist income from the decline in numbers of through

The Australians passengers stopping over in Malaysia.

believe however that there is considerable potential for

growth in genuine Australian tourist traffic to Malaysia. The most serious difficulty is the risk that the Malaysians

will see in our agreement with Australia an attempt to deny them the opportunity they are seeking for the expansion of

MAS. At the recent ASA/Concorde talks in London, we told

the Malaysians that we sympathised with the need for MAS

to be able to plan ahead but we made no commitment to help.

Further talks are likely to take place in October. Malaysian reaction could be sharp, even though they will

have no justification in air services terms.

$

Such a

The

reaction might postpone still further Malaysian agreement

to Concorde overflight of their territorial waters en route

to Singapore. On the other hand, their resentment may be mitigated to some extent when they realise the benefits

they can derive from the cuts affecting Singapore.

THAILAND

3

We shall not need to cut Thai International's existing

i-

2 services weekly battson Bangkok and London (this in

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