23
235
Bus
PRIORITY GPS 260
CYPHER/CAT A & BY BAG
F C O 231505Z
CONFIDENTIAK (841-1-
RECENT
26 JUN 1978
OS FIDENTIAL
OFFICEF
RE:
TO PRIORITY HONG KONG (GOVERNOR AND BCARE
PORE
iffgreed with
TELNO 483 OF 23 JUNE
INFO WASHINGTON INFO SAVING TO SINGAPORE KUALA LUMPUR.
YOUR TELS NOS 710 AND 750 : AIR CARGO RATES
1 THE CAA FARES GROUP HAS AGAIN CONSIDERED THE POSITION, BUT SINCE THE AIRLINES ARE UNWILLING TO REDUCE SELLING RATES, WE CAN SEE NO IMMEDIATE SCOPE FOR EFFECTIVE ACTION BY HMG, PARTICULARLY SINCE NO BRITISH SCHEDULED CARRIER OPERATES THE ROUTE. PART OF THE DIFFICULTY IS THAT THERE HAS BEEN NO RATES INCREASE ON THE NORTH AND CENTRAL PACIFIC ROUTES SINCE 1974, AND UNTIL AN OVERALL INCREASE IN RATES CAN BE NEGOTIATED, AIRLINES WILL BE RELUCTANT TO AGREE FURTHER REVENUE LOSSES BY WAY OF RATE REDUCTIONS
FOR HARD CURRENCY COUNTRIES.
2. EA HAS NOW FILED A REVISED IATA PACKAGE FOR THE NORTH AND CENTRAL PACIFIC, A COPY OF WHICH YOU WILL NO DOUBT HAVE RECEIVED. THE NEW PACKAGE PROPOSES LOCAL SELLING PRICES FOR HONG KONG, MALAYSIA, SINGAPORE AND TAIWAN CALCULATED ON THE BASIC US COLLAR RATES AT THE IATA CONVERSION RATE FACTORS (RESOLUTION 021B), BUT WITH A DISCOUNT OF 10 PER CENT. WE UNDERSTAND THAT, IF ADOPTED, THE PACKAGE WOULD EFFECTIVELY RESTORE THE SELLING PRICE RELATIONSHIPS BETWEEN HONG KONG AND THE OTHER THREE COUNTRIES.
3. CAA WOULD APPRECIATE YOUR COMMENTS ON THESE PROPOSALS BEFORE THEY, AND THE DOT, CONSIDER FURTHER THE EXCHANGE RATES PROBLEM.
4. YOUR PARA 5. THE REFERENCE IN OUR TELNO_447 TO QUOTE US- UK NEGOTIATIONS UNQUOTE, ON FARES IS A REFERENCE TO THE EXCHANGES CONCERNING CURRENCY PROBLEMS ON PASSENGER FARES TAKING PLACE BY LETTER. OUR TELS 336 AND 337 REFER. IN THE LIGHT OF YOUR TELNO 548, WE WILL SHORTLY BE GOING BACK TO THE AMERICANS ON THIS ALONG
THE LINES AGREED.
5. SECOND LINE OF OPENING PARAGRAPH OF OUR TEL NO. 447 SHOULD HAVE READ QUOTE US-HONG KONG FARES UNQUOTE.
OWEN
FILES MAED
HK & GD NAM D SEAD,
/COPIES SENT TO CAD/DOT/
MISS BROWN
MR FERGUSSON
MR MURRAY
CONFIDENTIAL
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