TNAG-0865-FCO40-1075-Involvement-of-Hong-Kong-in-air-services-agreements-1979 — Page 170

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34

Sivil Aviation Authority

CAA House

45-59 Kingsway

{main entrance Kemble Street)

London WC2B 6TE

Telephone 01-379 7311 Ext 2785

(GAAP

From the Group Director Economic Services

Mr D T Wong

Secretary for Economic Services

Government Secretariat

Lower Albert Road

HONG KONG

HIKKI84/1

20 July 1979

251

+

по

Dor

Draw Danied

Thank you for your letter of 12 June about Hong Kong cargo rates. In view of the points made in your letter, it is probably worth looking at the overall position.

Hong Kong/US cargo rates went up on the 1st of this month, and this was the first increase in these rates since July 1974. There have been a number of discussions, of greater or lesser formality between the Authority and the Hong Kong administration over this period culminating in the discussion in October last year.

As I understand it, at the meeting in October Cliff Paice and John Buswell were indeed suggesting that Hong Kong might wish to support the Flying Tiger filing. This was not because we had costed it out but was a conclusion we had arrived at against the background that there had been no increase for 4 years, that both Flying Tiger and PanAm had been making noises to the Authority about reducing services or pulling off the route (and while these noises are usually bluff we thought there might be slightly less bluff than usual in this case), and because the filing removed what was apparently a source of great discontent to the Shippers' Council, namely the requirement to pay cargo rates in Hong Kong at a level of Hong Kong dollars which was derived from the artificial IATA formula: the new filing was in direct Hong Kong dollars.

If you got the "firm impression" that the Authority was fully au fait with the trans-Pacific costs of the US carriers, I can only apologise. I am sure that neither Cliff Paice nor John Buswell intended to give this impression. As you may know, the carriers give us copies of their justifications to the CAB but these are of no value in assessing Hong Kong/US rates because they are done on the basis of US/Far East costs as a whole. We have no powers to require US/ Hong Kong costs in detail from the airlines, although if we were to ask them I think they might be willing to supply us with what they could.