TNAG-0779-FCO40-983-Involvement-of-Hong-Kong-in-air-services-agreements-1978 — Page 70

CONFIDENTIAL

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to achieve this main objective, and that the less good alternatives J

would still have the same implications for other countries. They

decided therefore that it was better to address the problem for the

intermediate countries explicitly by opting for the third/fourth b

freedom only regime. We are grateful to you and other posts who sent

comments in reply to FCO Tel No.159 to Singapore (not copied to all).........

paras 6 to 14 below consider the effects, as we and the Australians →

estimate them, on each country separately.

6.

.:)

All the mid-point countries in S E Asia and India would be

affected to some extent, but with the exception of Singapore, the effect

may be less than might appear at first sight..

7.

SAS AJ they gi

Both we and the Australians would have to reduce present SIA.DE

services to UK and Australia respectively by about 80% and tourist

trade ould suffer immediately from fewer short stops by passengers en-.

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route to Europe. However, calculations done by the Australians on the

assumption that once the system had settled down more Australians would

spend longer holidays in Singapore suggest that Singapore's net:loss on

tourism from Australia could be as low as A$3 million per year.

8.

We agree with the analysis in para 2 of Kuala Lumpur Tel No.292

to London. We would not find it necessary to reduce the two, MAS

services per week to London. In addition, the Australians may decide

to withdraw Qantas from the Malaysia-Australia service and leave it

in the hands os MAS. The also see the possibility of more Australian

tourists having longer stays in Malaysia, but the latter would need to

undertake more promotion of tourism in Australia. However, we agree

initially that the Malaysians are likely in particular to react at least/as

suggested in para 5 of Kuala Lumpur tel No.292, because their

aspirations for MAS's growth would be thwarted.

9.

1

Thailand could partially off-set the loss of the right to carry

through traffic by gains which they would make from the exclusion of

Qantas from the Bangkok-London sector. We would not need to cut Thai

services to London and Australians are confident that services from