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UNCLASSIFIED
FM HONG KONG 030459Z APR 79
TO IMMEDIATE FOREIGN AND COMMONWEALTH OFFICE TELNO.434 OF 3 APRIL,
INFO PRIORITY: CANBERRA,
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3 APR 1979
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ROUTINE : HONG KONG GOVT OFFICE LONDON.
YOUR TELNO.213: U.K/AUSTRALIA AIR SERVICES.
1. THE ASEAN PROPOSALS FOR APEX SECTOR FARES ARE PEGGED AT A LEVEL SIGNIFICANTLY BELOW THE HONG KONG APEX FARES AGREED IN JANUARY. THIS IS SURPRISING IN THAT THE HONG KONG APEX FARES WERE COST RELATED TO CPA'S PROJECTED OPERATING COSTS WITH 3747 AIRCRAFT. WE WERE TOLD THAT QANTAS WAS A SLIGHTLY LOWER COST OPERATOR THAN CPA AND ALSO A LOWER COST OPERATOR THAN ALL THE ASEAN AIRLINES, WITH THE EXCEPTION OF SIA. IT SEEMS THAT MAS, PAL, TAI AND GIA ARE PREPARED TO INTRODUCE APEX FARES WHICH WOULD NOT BE ECONOMICALLY VIABLE - A MEASURE PERHAPS OF THE INFLUENCE OF SINGAPORE ON THESE PROCEEDINGS.
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2. NONETHELESS, CPA ARE PREPARED TO ACCEPT THE ASEAN APEX LEVELS WHICH, ON AN AUSTRALIAN CENTS PER MILE BASIS, WOULD PROVIDE FOR DOLLARS 460 LOW SEASON AND 542 HIGH SEASON. CPA AGREE WITH THE AUSTRALIAN VIEW THAT A TEN DAY ADVANCE PURCHASE PERIOD IS UNREALISTICALLY LOW AND WE ARE THEREFORE CONTENT TO HOLD TO THE JANUARY AGREEMENT: 21 DAYS EX-HONG KONG AND 45 DAYS EX-
AUSTRALIA.
3. WE, AND CPA, ARE ALSO CONTENT TO LEAVE THE WHOLESALE CONCEPT ON ONE SIDE AND AGREE TO THE INTRODUCTION OF A HONG KONG GIT FACILITY IN ITS PLACE AT THE LEVEL SUGGESTED BY ASEAN. THIS WOULD WORK OUT AT AUSTRALIAN DOLLARS 363 LOW SEASON AND 551 HIGH SEASON.
/4. AS YOU KNOW,
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