TNAG-0863-FCO40-1073-Involvement-of-Hong-Kong-in-air-services-agreements-1979 — Page 182

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ASSESSMANT WAS THAT A DAILY A300 FOR MAS BETWEEN KUOWE LUMPUR AND

HONG KONG WOULD NOT BE JUSTIFIED UNTIL SOME TIME IN 1980.

SINCE HOWEVER MAS WOULD NOT GET THEIR FIRST A300 UNTIL LATE IN

1979 HE THOUGHT THE PROBLEM COULDBE GOT AROUND BY SOME PHASING IN

OF A300 OPERATIONS. MAS REJECTED OUR ASSUMPTIONS ABOUT THE

REDUCTION IN MAS TRAFFIC BETWEEN KUALA LUMPUR AND TOKYO AND

IT NEEDED A GOOD DEAL OF PERSUASION FOR HAMZAH TO ACCEPT ROGERS'

PROPOSAL BY HE EVENTUALLY DID.

4. HAMZAH THEN ASKED ROGERS WHAT SUGGESTIONS HE HAD FOR DEALING WITH THE PROBLEM OF FIFTH FREEDOM CARRIAGE BEYOND HONG KONG, ROGERS SAID HE WAS ATTRACTED TO THE CONCEPT OF BALANCE OF EARNINGS. ANOTHER POSSIBILITY WAS TO FOLLOW THE TREND ELSEWHERE AND CONSIDER A THIRD/FOURTH ONLY REGIME. THIS WOULD ENTAIL MAS GIVING UP THEIR FIFTH FREEDOM RIGHTS BEYOND HONG KONG, WHILE CPA GAVE UP THEIR FIFTH FREEDOM RIGHTS BEYOND MALAYSIA. HAMZAH DID NOT MUCH CARE FOR THIS... ROBERS ACKNOWLEDGED THAT IT WAS A DIFFICULT PROBLEM AND SUGGESTED IT WAS PROBABLY BEST LEFT ON ONE SIDE FOR THE TIME BEING.

5. HAMZAH SUGGESTED THAT THE TEAMS SHOULD TURN THEIR ATTENTION TO THE MECHANISM FOR DEALING WITH GROWTH IN CAPACITY TO MEET GROWTH IN DEMAND. ROGERS SAID THAT BOTH SIDES WERE INTERESTED IN PROGRESSINVE GROWTH TO MEET PUBLIC DEMAND WITHIN A FRAMEWORK THAT WOULD FACILITATE ECONOMIC OPERATIONS BY THE AIRLINES. EXPERIENCE SHOWED THAT THIS CAME BEST FROM A CLOSE WORKING RELATIONSHIP BETWEEN THE AIRLINES. GOVENRMENTS OUGHT NOT BE INVOLVED OTHER THAN IN SETTING THE GUIDELINES TO WHICH THE AIRLINES SHOULD WORK. IT WAS AGREED THAT FURTHER CONSIDERATION WOULD

BE GIVEN TO WHAT THE GUIDELINES SHOULD BE.

6. DELLER OF BRITISH AIRWAYS REPORTED THE OUTCOME OF THE PRIVIOUS

DAY'S WORKING GROUP DISCUSSIONS ON FARES. BRITISH AIRWAYS HAD PRESENTED PROPOSALS FOR LOWER END-TO-END APEX FARES WITH SIMILAR CONDITIONS AND RESTRICTIONS TO THOSE PROPOSED FOR THE UK-AUSTRALIA ROUTE. THE LEVELS BORE A CLOSE RELATIONSHIP TO THOSE BA HAD PROPOSED TO SIA FOR THE UK-SINGAPORE ROUTE(WHICH SIA THOUGHT WERE TOO HIGH). THEY INTRODUCED SEASONALITY INTO THE FARE STRUCTURE AND THE AVERAHE LEVEL OVER THE YEAR WAS SOMEWHAT LESS THAN THE

PRESENT MARKET RATE IN MALAYSIA. ENFORCEMENT OF FARES AND

Z

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¿CONDITIONS