TNAG-0780-FCO40-984-Involvement-of-Hong-Kong-in-air-services-agreements-1978 — Page 84

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ENCOURAGE AUSTRALIAN TOURISM TO THAILAND AND ALSO INHIBIT THE

BILITY OF SIA TO CONTINUE THEIR FAIRLY EXTENSIVE SIXTH FREEDOMING OF AUS-THAILAND TRAFFIC (AS WOULD THE PROPOSED SEVERE REDUCTION IN SIA'S CAPACITY) THE AUSTRALIANS CONSIDERED THAT THE THAIS WOULD PROBABLY COME OUT OF IT NO WORSE AND POSSIBLY EVEN BETTER THAN THEY WERE NOW. THEY THEREFORE CONSIDERED THAT THERE WAS LITTLE LIKELIHOOD OF ANY SERIOUS THAI OPPOSITION, OUR TEAM REPORTED THAT WE EXPECTED TO LEAVE THAI INTERNATIONAL'S CAPACITY TO LONDON AT ITS PRESENT LEVEL AND THAT THE CHANGES WERE EXPECTED TO EXPEDITE THE TIME WHEN WE COULD JUSTIFIABLY APPROVE AN INCREASE

FOR MAS,

7. THERE WAS NO ESSENTIAL CHANGE IN THE AUSTRALIAN INTENTIONS VIS-A-VIS INDIA AND CONTINENTAL EUROPE. THEY HOPED TO BE ABLE TO KEEP AIR INDIA AT THEIR PRESENT ONE SERVICE PER WEEK (WHICH WOULD BE UNRECIPROCATED). THEY WERE PROPOSING 9 SERVICES PER WEEK

BY QANTAS TO CONTINENTAL EUROPEAN POINTS TO BE RECIPROCATED BY

EUROPEAN CARRIERS, SIX OF THESE WOULD BE TO SOUTHERN EUROPE

GREECE, ITALY AND PROBABLY, YUGOSLAVIA) AND THREE TO NORTHERN EUROPE. THE MAIN POINT OF UNCERTAINTY WAS HOW THEY WOULD DISTRIBUTE THE

THREE SERVICES TO N EUROPE IE GERMANY AND NETHERLANDS. FOR OPERATING REASONS THEY WOULD PREFER TO PUT THEM ALL INTO GERMANY

BUT THERE WAS STRONG PRESSURE FROM THE DUTCH AND THEY EXPECTED

THE DECISION ON THIS WOULD BE STRONGLY INFLUENCED BY POLITICAL

CONSIDERATIONS.

8. IN THE INTERVAL BEFORE THE TEAM ARRIVED, BA AND QANTAS HAD HAD VERY THOROUGH DISCUSIONS ON ALL THE PRACTICAL ISSUES. THEY HAD REACHED AGREEMENT ON THE PATTERN OF OPERATIONS AND CAPACITY (NOW AGREED AT 9 X 747 EACH PER WEEK IN PLACE OF THE 8 EACH ORIGINALLY PROPOSED) SO AS TO BE ABLE JOINTLY TO GIVE AN ADEQUATE SERVICE TO ALL THE MAIN AUSTRALIAN CENTRES. WITHIN THAT THERE WAS ALSO AGREEMENT FOR BA TO CONTINUE ITS TWO SERVICES TO NEW ZEALAND OVER AUSTRALIA BUT WITHOUT FIFTH FREEDOM RIGHTS. THE AIRLINES HAD ALSO AGREED IN PRINCIPLE ON ARRANGEMENTS FOR COMMERICAL CO-OPERATION WHICH WOULD FALL SHORT OF A FULL REVENUE POOL. THERE IS STILL DISAGREEMENT ON THE LEVEL OF FARES AND ON AIRCRAFT CONFIGURATIONS. NO PROGRESS HAD BEEN MADE ON CONCORDE, WHICH IS STILL A VERY TOUCHY SUBJECT FOR THE QANTAS MANAGEMENT. THE TWO TEAMS HAVE SPENT A GOOD DEAL OF TIME DISCUSSING FARES, FARE DIFFERENTIALS AND THEIR CONSEQUENTIALS FOR TRAFFIC FLOWS. THE MAIN PROBLEM IS TO BE ABLE TO SATISFY THE AUSTRALIAN POLITICAL REQUIREMENTS FOR A VERY LOW

3~~ 3.

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/APEX