TNAG-0862-FCO40-1072-Involvement-of-Hong-Kong-in-air-services-agreements-1979 — Page 147

RESTRICTED

GRS 330

RESTRICTED

H WELLINGTON 030321Z JAN 79

ho PRIORITY FCO

TELEGRAM NO 1 OF 3 JANUARY

HCEIVED IN GRÁISTEM NO. 51 - JAN 1979

INFO CANBERRA, HONG KONG (FOR GOVERNOR AND BCAREE

MeYOUR TELEGRAM NO 290: UK/NZ AIR SERVICES

OFFICER

PA

Rnew

REGISTRY

Acton Tsia?

1. HEAD OF ECONOMIC DIVISION MFA, O'BRIEN, RAISED SUBJECT WITH ARCHER ON 28 DECEMBER (LETTER TO STABLES IN POST). HE SAID THAT

IT WOULD BE A WHILE BEFORE THE NEW ZEALANDERS WERE READY TO TAKE

THE UK/NZ BILATERAL DISCUSSIONS ANY FURTHER. THE INTER-DEPARTMENT

GROUP OF OFFI1IALS CONSIDERING FUTURE NZ CIVIL AVIATION POLICY

WOULD BE MEETING AGAIN IN JANUARY BUT INTRODUCTION OF LOW FARES

BETWEEN AUSTRALIA AND THE UK AND AUSTRALIA AND THE US NECESSITATED

A COMPLETE RETHINK OF NZ FUTURE POLICY. NZ HAD GAINED THE IMPRESSION

THAT CATHAY PACIFIC WERE ATTACHING LESS URGENCY TO ACCESS TO

AUCKLAND. HE WONDERED IF THIS CHANGED THE UK VIEW.

2. ARCHER SAID THAT HE COULD NOT COMMENT ON CATHAY PACIFIC'S PLANS.

HE HAD HEARD A RUMOUR THAT ANZ WAS NOW MORE INTERESTED IN THE

4

AUCKLAND/HONG KONG SECTOR SINCE THEY WERE ATTRACTING GOOD CARGO USAGE. HE WONDERED VWHETHER ANZ WOULD NOT NOW BE MORE INTERESTED IN THE PROPOSALS WHICH ROGERS HAD TABLED AT PREVIOUS BILATERALS.

IF ANZ LOST GROUND ON THE ROUTE TO CALIFORNIA OR WERE FORCED TO

LOWER PRICES TO AN UNECONOMIC LEVEL WOULD THEY TRY TO SWITCH

NZ PASSENGERS TO OTHER ROUTES E.G. THROUGH HONG KONG? IT SEEMED

THAT ANZ WOULD HAVE DIFFICULTY IN THE NEW LOW PRICE MARKET UNLESS

THEY BEGAN TO THINK SERIOUSLY ABOUT A THROUGH ROUTE TO THE UK OR

A COOPERATIVE PRICING OR SEAT SHARING ARRANGEMENT WITH BA.

3. O'BRIEN SAID THAT HE THOUGHT THIS WAS A FAIR ANALYSIS OF CURRENT

PROBLEMS BUT HE COULD NOT SPEAK FOR ANZ. HIS MINISTER WOULD BE

MEETING MR NIXON IN THE SECOND HALF OF JANUARY TO SEE WHETHER THEY

COULD REACH ANY ARRANGEMENT. WITH THE AUSTRALIANS TO GIVE NZ BENEFIT

FROM NEW FARE STRUCTURES. THE AMERICANS WOULD PROBABLY ALLOW ANZ

TO OPERATE THE NEW LOW FARE FROM CALIFORNIA. HE ACCEPTED THAT

RESTRICTED:

| THERE