TNAG-0865-FCO40-1075-Involvement-of-Hong-Kong-in-air-services-agreements-1979 — Page 172

CONFIDENTIAL

Hkk 184/1.07

B41

GPS 335

CONFIDENTIAL CYPHER CATA

FM HONG KONG 232820Z JUL

TO IMMEDIATE FOREIGN AND COMMONWEALTH OFFICE

TELEGRAM NUMBER 1843 OF 23 JULY, 1979

INFO IMMEDIATE CANBERRA.

YOUR TEL NO 549: UK/AUSTRALIA AIR SERVICES.

24 JUL. N22 23/7

See 346

1. WE APOLOGISE FOR THE CONFUSION OVER THE BALANCE OF CAPACITY

ARGUMENT (PARAGRAPH 3 OF T.U.R.). CPA HAD OMITTED TO TAKE THE

CONVERSION FACTOR INTO ACCOUNT WHEN THEY APPROACHED US DUE TO

THEIR KEY PERSONNEL INVOLVED IN THE ISSUE BEING AWAY FROM HONG

KONG. CPA HAVE NOW CONFIRMED THAT THEY DO NOT (REPEAT) NOT WISH

TO CHANGE THINKING ON THE SUBJECT AND HAVE WITHDRAWN THEIR

REQUEST FOR ACTION TO BE TAKEN REGARDING QANTAS' FOURTH

B747 SERVICE.

2. WITH REGARD TO PARAGRAPH 4 OF T.U.R., CPA ESTIMATE THE DIVERSION OF TRAFFIC TOWARDS UK/EUROPE AND U.S.A. AT 15 PER CENT. FOR THE TOTAL MARKET H.K./EAST AUSTRALIA, CPA REPORT

DECREASES IN TRAFFIC OVER THE CORRESPONDING MONTHS IN 1978,

OF 8.5 PER CENT, ZERO.6 PER CENT AND 4.2 PER CENT FOR THE

MONTHS OF FERBRUARY, MARCH AND APRIL 1979, RESPECTIVELY.

CPA SAY THAT UNDER NORMAL CIRCUMSTANCES THEY WOULD HAVE

EXPECTED TRAFFIC OVER THE PERIOD TO INCREASE BY ABOUT 10

PER CENT.

3. WE NOTE THAT YOU WERE TO CONSIDER WHAT ACTION TO TAKE

AFTER THE NEXT MEETING OF THE ASEAN ECONOMIC MINISTERS, BUT THIS HAS NOW BEEN POSTPONED INDEFINTELY (PARAGRAPH 1 OF JAKARTA TELEGRAM NUMBER 232 TO F.C.0.). CPA HAVE NOW REFILED WITH CAA A PACKAGE SIMILAR TO THEIR MAY FILING, BUT INCORPORATING AMENDMENTS TO REFLECT A 7 PER CENT INCREASE ON ACCOUNT OF FUEL COSTS. WE SHOULD BE GRATEFUL FOR

ANYTHING THAT CAN BE DONE TO BRING ABOUT THE EARLY IMPLEMENTATION

OF THE NEW FARES.

CONFIDENTAL

14. CPA HAVE