TNAG-0863-FCO40-1073-Involvement-of-Hong-Kong-in-air-services-agreements-1979 — Page 45

GR 200

CONFIDENTIAL

CONFIDENTIAL

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HKK 184/1

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по

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FM FCO

031600Z APRIL 79

TO IMMEDIATE CANBERRA

TELEGRAM NUMBER 123 OF 3 APRIL

INFO SAVING HONG KONG (GOVERNOR AND BCARFE), BANGKOK, KUALA LUMPUR, SINGAPORE, JAKARTA, MANILA AND WELLINGTON.

F.R

YOUR TELNO 182 AND 183: UK/AUSTRALIA AIR SERVICES

1. WE HAVE DISCUSSED THE FARES PROPOSALS WITH BA. AT FIRST SIGHT, THE AUSTRALIAN PROPOSALS FOR STOP-OVER FARES LOOK SATISFACTORY. WE ASSUME THAT THEY ARE THE SAME AS THE PREFERRED PROPOSAL DISCUSSED IN CANBERRA IN JANUARY. THE ACCEPTABILITY OF ANY REDUCTION (PARA- GRAPH 7(111) OF YOUR FIRST TELEGRAM UNDER REFERENCE WOULD

DEPEND ON HOW IT WAS DISTRIBUTED BETWEEN THE THREE

SEASONABLE LEVELS. WE ARE CONCERNED THAT THE OFF-PEAK STOP-OVER

SHOULD NOT BE TOO LOW, BECAUSE IT WOULD

OTHERWISE COMPETE WITH THE COMBINED OFF-PEAK/PEAK AND

OFF-PEAK/SHOULDER APEX RETURN.

THE SECTOR FARES PROPOSED BY ASEAN SEEM SATISFACTORY.

BA ARE HOWEVER STILL STUDYING ALL THE PROPOSALS IN DETAIL, AND DELLER (BA) IS HAVING TALKS ABOUT FARES AND CAPACITY WITH QANTAS IN

SYDNEY THIS WEEK.

2. THE AUSTRALIANS SEEM TO BE WAVERING ON THE QUESTION OF ACCESS BY THE ASEAN CARRIERS TO THE END-TO-END TRAFFIC. WE FIND IT DIFFICULT TO RECONCILE THE NEW IDEA THAT SIA CAPACITY INTO AUSTRALIA CAN BE RETAINED AT PRESENT LEVELS (PARA 7(V) OF YOUR FIRST TELEGRAM UNDER REFERENCE REFERS), WITH THE FORMER PROPOSAL TO CUT SIA'S FREQUENCY FROM (14) TO (15) FLIGHTS A WEEK. IS THE EXPECTED LEVEL OF NEW TRAFFIC REALLY EQUAL TO THE SIXTH FREEDOM TRAFFIC THAT SIA WOULD NO LONGER CARRY?

IT SEEMS TO US THAT TO ALLOW SIA TO OPERATE BROADLY THE SAME CAPACTIT FROM THE MAIN POPULATION CENTRES, AT AN ASSUMED 70% SEAT FACTOR, WOULD GIVE THEM A SIGNIFICANT LEVER TO GET ACCESS TO THE END-TO- END TRAFFIC. THIS HAS OBVIOUS IMPLICATIONS FOR OUR ATTITUDE TO SIA'S CAPACTITY FROM SINGAPORE TO LONDON.

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