TNAG-0863-FCO40-1073-Involvement-of-Hong-Kong-in-air-services-agreements-1979 — Page 72

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2 6 MAR 1979

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TO IMMEDIATE F.C.0. TELEGRAM NUMBER 411 OF 23 MARCH, 1979 INFO IMMEDIATE CANBERRA AND ROUTINE HONG KONG GOVT OFFICE LONDON UK/AUSTRALIA AIR SERVICES.

LONDON

1. AT THE AIR SERVICES TALKS HELD IN CANBERRA ON 25 AND 26 JANUARY 1979, A NEW PACKAGE OF FARES WAS AGREED FOR THE HONG KONG- AUSTRALIA ROUTE SIT IT WAS NOT POSSIBLE TO AGREE ON THE TIMING OF THE INTRODUCTION OF THE NEW FARES (CANBERRA TELNO 76 OF 27 JANUARY). AT THE TIME, IT WAS FELT THAT EARLY IMPLEMENTATION WOULD ALMOST CERTAINLY BE REGARDED AS PROVOCATIVE BY THE ASEANS.

2. AT A MEETING WITH ROGERS (DOT) IN HONG KONG ON 26 FEBRUARY, WE STRESSED THE NEED FOR AN EARLY INTRODUCTION OF THE NEW FARES. THE HONG KONG PUBLIC HAD BEEN READING OF THE SUCCESS OF CHEAP FARES BETWEEN AUSTRALIA AND LONDON AND ALSO BETWEEN AUSTRALIA AND U.S.A. AND WANTED TO KNOW WHY THEY HAD TO CONTINUE TO PAY EXPENSIVE FARES ON THE HONG KONG-AUSTRALIA ROUTE. TO SAY THAT WE HAVE TO WAIT UNTIL SIMILAR FARES COULD BE AGREED BETWEEN THE ASEAN COUNTRIES AND AUSTRALIA WOULD NOT GO DOWN WELL SINCE SIMILAR CONSIDERATIONS HAD NOT STOOD IN THE WAY OF THE INTRODUCTION OF THE AUSTRALIA-UK CHEAP FARES. IT WAS AGREED THAT WE WOULD AWAIT THE OUTCOME OF THE AUSTRALIA/ASEAN MEETING BEFORE PRESSING THE AUSTRALIANS.

3. PRESSURE IS INCREASING HERE FOR AN EARLY INTRODUCTION OF THE HONG KONG PACKAGE. THE LATEST NEWS IS THAT PAA HAVE RELEASED FIGURES WHICH SHOW THAT THE AIRLINE IS HOLDING 60, 163 RESERVATIONS FOR TRAVEL FROM AUSTRALIA TO THE USA BETWEEN NOW AND THE END OF JULY. FOR MAY ALONE, PAA ALREADY HAS 13, 300 BOOKINGS COMPARED WITH 9,800 FOR MAY 1978.

4. AGREEMENT HAS NOW BEEN REACHED ON A NUMBER OF PRINCIPLES AT THE ASEAN/AUSTRALIA MINISTERIAL MEETING AND THAT OFFICIALS FROM BOTH SIDES WILL MEET WITHIN A MONTH TO CLEAR UP THE REMAINING PROBLEM (JAKARTA TELNO 99 TO YOU). WE SHOULD BE GRATEFUL IF YOU WOULD SEEK IMPLEMENTATION OF THE HONG KONG FARES PACKAGE AT THE EARLIEST POSSIBLE DATE. ACCORDING TO CPA, 15 APRIL WOULD PROVIDE SUFFICIENT LEAD TIME IF THE ADVANCE BOOKING REQUIREMENT FOR THE APEX FARE COULD BE WAIVED FOR THE FIRST MONTH.

MACLEHOSE

1727

FILES

MAED

SPD

SEAD

FED

NK & GO

NEWS D OID MR.BUTLER MR. CORTAZZI MISS BROWN MR. MURRAY

[COPIES SENT TO CAD/DOT]