TNAG-0781-FCO40-985-Involvement-of-Hong-Kong-in-air-services-agreements-1978 — Page 205

+

CONFIDENTIAL

3 THE UK TEAM THEN TABLED A PAPER (OF WHICH MARSHALL DOT IS BRINGING COPIES) PROPOSING A MORE BALANCED ARRANGEMENT UNDER WHICH BRITISH AIRWAYS SERVED WESTERN CANADA AND, IN RETURN, AIR CANADA'S FREQUENCIES IN EASTERN CANADA ROSE TO A MORE NORMAL LEVEL: DETAILED CALCULATIONS WERE PUT FORWARD TO DEMONSTRATE THAT THIS WOULD PROVIDE SUBSTANTIAL BENEFITS TO THE TRAVELLING PUBLIC, THE GOVERNMENTS AND THE AIRLINES. THE CANADIAN TEAM AGREED TO GIVE THIS SERIOUS CONSIDERATION AND ASKED AIR CANADA TO EVALUATE THE UK PROPOSALS AND REPORT BACK TO THEM AS SOON AS

POSSIBLE.

4.

AS REGARDS THE PACIFIC ROUTES, THE CANADIAN TEAM AGREED FROM THE OUTSET, IN THE LIGHT OF THE DISCUSSION IN APRIL IN LONDON, THE PRINCIPLE THAT CATHAY PACIFIC SHOULD OPERATED ALONGSIDE CANADIAN PACIFIC BETWEEN HONG KONG AND VANCOUVER AND THAT NEW ROUTES SHOULD BE NEGOTIATED FOR THESE SERVICES. DISCUSSION CENTRED ON THE QUESTION OF WHEN CATHAY PACIFIC'S SERVICES SHOULD COMMENCE AND THE POINTS TO BE AVAILABLE ON EACH SIDE.

5. THE UK TEAM POINTED TO THE HEALTHY GROWTH OF TRADFIC ON THE ROUTE AS DEMONSTRATED BY THE FIGURES WHICH THE CANADIANS DID NOT CHALLENGE. IN THE LIGHT OF THESE FIGURES ROGERS SUGGESTED THAT CATHAY PACIFIC'S SERVICE COULD COMMENCE IN 1980 WITHOUT SERIOUS IMPACT ON CANADIAN PACIFIC (THIS IS THE EARLIEST THAT CPA THEM- SELVES ARE CONTEMPLATING). THE CANADIANS WERE INITIALLY UNWILLING TO SEE THE SERVICE BEGIN BEFORE 1983 BUT SUBSEQUENTLY TALKED IN TERMS OF 1982 AND COLLINS INDICATED TO ROGERS PRIVATELY THAT THIS

DATE WAS NEGOTIABLE.

6. THE CANADIANS TABLED A PROPOSED ROUTE DESIGNED TO ALLOW THEIR AIRLINE SCOPE FOR ADDITIONAL DEVELOPMENT IN THE FUTURE, WHILE INDICATING THAT SOME OF THE NEW POINTS WERE QUOTE HYPOTHETICAL UN QUOTE. AS AN OPEN ING GAMBIT ROGERS PROPOSED A CORRESPONDING ROUTE FOR CATHAY PACIFIC. IN SUBSEQUENT DISCUSSION IT EMERGED THAT THE MAJOR DIFFICULTY ON THE CANADIAN SIDE AROSE FROM THE IR INABILITY TO AGREE FIFTH FREEDOM RIGHTS ON LONG TRANSPACIFIC SECTORS (E.G. TOKYO-VANCOUVER) BECAUSE THEY FELT THIS WOULD OPEN THE DOOR TO A FLOOD OF SIMILAR APPLICATIONS FROM OTHER AIRLINES

· 2 CONFIDENTIAL

/ IN THE