TNAG-0862-FCO40-1072-Involvement-of-Hong-Kong-in-air-services-agreements-1979 — Page 86

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POINTS AND THEY WERE THEREFORE CONSTRAINED IN THE LEVELS THEY WERE ABLE TO PROPOSE FOR HONG KONG BY WHAT WAS ACCEPTABLE TO SOME OF THE OTHER COUNTRIES, NOTABLY MALAYSIA AND INDONESIA,' WHERE THE ECONOMICS OF THE ROUTES WERE LESS FAVOURABLE AND THE CARRIERS OPERATED AIRCRAFT WITH HIGHER OPERATING COSTS. THIS ALSO WAS AN IMPORTANT FACTOR MILITATING AGAINST BEING ABLE TO OFFER A LOWER APEX FARE ON THE AUSTRALIA-SINGAPORE ROUTE, FORE ESPECIALLY AS SIA WAS ANOTORIOUS CARRIER OF TRAFFIC BETWEEN AUSTRALIA AND OTHER ASIAN POINTS.

5.

REGARDING THE UNFAVOURABLE RELATIVITY BETWEEN THE LONDON- AUSTRALIA APEX FARE AND THE HONG KONG-SYDNEY APEX FARE, ROWLAND ARGUED THAT IT WAS NOT A LEGITIMATE COMPARISON SINCE THE MARKETS ON THE TWO ROUTES WERE QUITE DIFFERENT,' THE MAJORITY OF THE MARKET ON THE FORMER WAS VFR TRAFFIC WHICH WOULD USE THE APEX FARE WHILE ON THE LATTER THE MAJORITY WAS EXCURSION TRAFFIC WHICH WOULD USE THE TOUR-BASING FARE. ROGERS SAID THAT WHILE HE APPRECIATED THE PROBLEMS WITH WHICH THE AUSTRALIANS HAD BEEN FACED, AND THE DIFFICULTY OF DISCRIMINATING BETWEEN THE REGIONAL CARRIERS, HE WAS NOT SATISFIED WITH THE SOLUTIONS AS THEY AFFECTED HONG KONG. AT HIS SUGGESTION, QANTAS AND CPA HAVE BEEN CHARGED WITH A RE- EXAMINATION OF THE WHOLE PROPOSED FARE STRUCTURE FOR HONG KONG ON A COST-RELATED BASIS TREATING, FOR THE PURPOSE OF THIS EXERCISE, THE ROUTE INISOLATION FROM THE ROUTES BETWEEN AUSTRALIA AND SE ASIA.

EAST AUSTRALIA ROUTE.

6.

IT WAS AGREED THAT 6 X 8747 WAS THE RIGHT LEVEL OF CAPACITY TO CATER FOR THE TRAFFIC ENVISAGED IN 1979/83. AS PROPOSD IN YOUR TELNO 117, ROGERS PUT A BID IN FOR CPA TO MOUNT THE SEVENTH FREQUENCY AS AND WHEN THIS COULD BE JUSTIFIED. ROWLAND EXPRESSED SYMPATHY WITH THIS BUT SAID THAT HE COULD NOT REACH A FIRM CONCLUSION WITHOUT FIRST CONSULTING

QANTAS.

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ROGERS ALSO PROPOSED THAT CPA SHOULD BE ENTITLED TO INCLUDE BRISBANE IN THEIR EAST AUSTRALIA ROUTE, ALTHOUGH CPA WOULD NO EXPECT TO USE THIS OPPORTUNITY UNTIL THEY WERE OPERATING

4 XB747. ROWLAND SAID HE WAS PREPARED TO EXAMINE THIS, ALSO, SYPATHETICALLY IN THE LIGHT OF TRAFFIC GROWTH. ACCORDING TO QANTAS, THE AVERAGE PASSENGERS PER WEEK BNE/HKG AT PRESENT ONLY AMOUNTS TO 67.

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