TNAG-0862-FCO40-1072-Involvement-of-Hong-Kong-in-air-services-agreements-1979 — Page 12

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CONFIDENTI AL

FM WELLINGTON 012250Z FEB 79

TO PRIORITY F C O

TELEGRAM NUMBER 44 OF 2 FEBRUARY

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INFO CANBERRA, SINGAPORE, KUALA LUMPUR, BANGKOK, JAKARTA, MANILA, HONG KONG (FOR GOVERNOR AND BCARFE), WASHINGTON.

FROM ROGERS.

UK/NEW ZEALAND AIR SERVICES DISCUSSIONS.

1.

DISCUSSIONS ON AIR FARES AND RELATED MATTERS TOOK PLACE HERE ON 31 JAN AND 1 FEBRUARY. THE ATMOSPHERE WAS FRIENDLY AND INFORMAL, ALTHOUGH AS THE TALKS PROCEEDED IT BECAME EVIDENT THAT THE NEW ZEAL ANDERS WERE LOOKING FOR QUICK SOLUTIONS TO THEIR PROBLEMS AND THEY WERE DISAPPOINTED WHEN IT BECAME CLEAR TOWARDS THE END OF THE SECOND DAY THAT THE POLITICAL AND ECONOMIC CONSTRAINTS RULED OUT A QUICK AGREEMENT AT THIS STAGE. APART FROM THE FIRST HALF HOUR, REPRESENTATIVES OF BA AND AIR NEW ZEALAND ATTENDED THROUGHOUT. 2. HEALY, WHO LED FOR NEW ZEALAND, CLAIMED THAT THEY HAD BEEN LEFT TOTALLY IN THE DARK BY AUSTRALIA ABOUT THE IC A P PROPOSALS UNTIL MR NIXON'S ANNOUNCEMENT BEFORE CHRISTMAS. THEY HAD THEREFORE APPRECIATED ROGERS' ACTION IN ALERTING LYNCH (NZ DEPUTY HIGH COMMISSIONER, LONDON) TO ITS IMPORTANT IMPLICATIONS FOR THEM. THEY WELCOMED THE OPPORTUNITY FOR AN INFORMAL DISCUSSION OF THE PROBLEMS I CAP RAISED FOR UK/NZ AIR SERVICES AND FARES.

3. ROGERS EXPLAINED CANDIDLY THE ECONOMIC AND POLITICAL CONSIDER- ATIONS THAT HAD LED US TO ACCEPT THE ICAP PROPOSALS AND THE SEQUENCE OF EVENTS, HE SAID THAT AS PRAGMATIC PEOPLE, WE FOUND NO GREAT DIFFICULTY IN OPERATING ONE TYPE OF SYSTEM IN OUR AIR SERVICES RELATIONS WITH AUSTRALIA AND ANOTHER IN OUR AIR SERVICES WITH THE UNITED STATES (ALTHOUGH THE BERMUDA 2 AGREEMENT PROTECTED US FROM THE EXTREMES OF THE US DEREGULATION POLICY). WE HAD FOUND THE AUSTRALIANS WILLING TO ADAPT THEIR I CAP PROPOSALS TO MEET OUR REASONED REQUESTS. AMONG THE FIRST SUCH ADAPTATIONS HAD BEEN AN AGREEMENT UNDER WHICH BA COULD CONTINUE TO EXTEND TWO SERVICES A WEEK BEYOND AUSTRALIA TO AUCKLAND AND TO MOUNT THE CAPACITY NEEDED TO CARRY THE UK/NEW ZEALAND TRAFFIC OVER AND ABOVE WHAT WAS NEEDED FOR THE UK/AUSTRALIA TRAFFIC.

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