TNAG-0780-FCO40-984-Involvement-of-Hong-Kong-in-air-services-agreements-1978 — Page 103

RESTRICTED

WE ARE GRATEKUL FOR THE STATEMENT OF POSITION OF BRITISM MINISTERS WHICH YOU KINDLY FORWARDED. WE HAVE ASSUMED THAT THIS IS A STATEMENT OF POSITION FOR NEXT WEEK'S DISCUSSION AND IS NOT IN THE NATURE OF A PUBLIC STATEMENT TO BE ISSUED AT THE TIME OF YOUR DEPARTURE. WE HAVE PROCEEDED ON THE BASIS THAT THE LATTER WOULD NOT

BE YOUR GOVERNMENT'S INTENTION.

WE WOULD NOT PROPOSE TO DISCLOSE OR DISCUSS THIS STATEMENT WITH THE GOVERNMENTS OF OTHER COUNTRIES UNTIL AFTER WE HAVE MET AGAIN.

THE INTEREST OF BRITISH MINISTERS IN DISCUSSING FURTHER THE POSSIBILITY OF INCORPORATING: A MODEST CHARTER OPERATION INTO

THE PROPOSED SCHEME IS NOTED.

OUR VIEW HAS BEEN, AND REMAINS AFTER SOME FURTHER WORK THAT WE HAVE DONE SINCE OUR RETURN FROM LONDON, THAT THIS WILL IMPOSE PRICE PENALTIES ON CERTAIN TYPES OF PASSENGERS AND WOULD AGGRAVATE THE DISTRIBUTION PROBLEM WITHIN AUSTRALIA.

FOR THIS REASON, WE WOULD PREFER TO DISCUSS ON A GOVERNMENT TO COVERNMENT BASIS WHETHER OR NOT IT WOULD BE POSSIBLE TO INCORPORATE CHARTER OPERATIONS WITHIN THE SCHEME WE PROPOSED. IT FOLLOWS THAT WE WOULD FIND THE PRESENCE OF A REPRESENTATIVE OF LAKER AIRWAYS INAPPROPRIATE DURING THOSE DISCUSSIONS. WE ARE, HOWEVER, PREPARED TO FULLY EXPLORE, AND ENDEAVOUR TO QUANTIFY TO THE SATISFACTION OF US BOTH, THE ADVANTAGES AND DISADVANTAGE'S THAT WOULD ACCRUE FROM ADDITION OF CHARTER OPERATORS.

THERE IS ANOTHER MATTER WE WOULD WISH TO RISE, NAMELY OUR BELIEF THAT A GROWING LEVEL OF TRAFFIC DESTINED FOR NORTHERN UNITED KINGDOM MAY NOT FIND HEATHROW THE MOST APPROPRIATE GATEWAY POINT IN THE UNITED KINGDOM. ALTHOUGH QANTAS HAS NOT ADVANCED ANY PROPOSALS IN RESPECT TO WAYS IT MAY SERVE NORTHERN ENGLAND AND SCOTLAND ON A MORE DIRECT BASIS, WE WOULD WISH TO DISCUSS WITH YOU A SECOND POINT WITHIN THE UNITED KINGDOM FOR THE AUSTRALIAN CARRIER AGAINST POSSIBLE MORE DIRECT SERVICES IN FUTURE.

! APPRECIATE THAT YOU WOULD HAVE LIMITED OPPORTUNITY TO EXAMINE THE MATTER PRIOR TO YOUR DEPARTURE FOR AUSTRALIA, BUT PERHAPS WE COULD OPEN THE SUBJECT AND TAKE IT AS FAR, DURING YOUR VISIT, AS CIRCUMSTANCES PERMIT.

UNQUOTE.

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