TNAG-0865-FCO40-1075-Involvement-of-Hong-Kong-in-air-services-agreements-1979 — Page 179

CONFIDENTIAL

2. FOLLOWING IS ANNEX:-

GUIDLINES GIVEN BY THE MALAYSIAN AND UNITED KINGDOM GOVERNKA

TO THEIR AIRLINES FOR THE PURPOSE OF DETERMINING CAPACITY INCREASES

FOR THE PURPOSE OF DETERMINING CAPACITY INCREASES THE AIRLINES SHALL, AS FAR AS PRACTICABLE, BE GUIDED BY THE FOLLOWING:-

A) SCHEDULES SHOULD BE ARRANGED IN SUCH A WAY AS TO MAXIMISE

THE SPREAD OF SERVICES AVAILABLE TO THE PUBLIC: B) PLANNING SEAT-FACTORS SHOULD BE ESTABLISHED FOR CAPACITY

PLANNING PURPOSES. IN ARRIVING AT THESE FACTORS THE AIRLINES SHOULD HAVE REGARD TO THE FACT THAT DIFFERENT TYPES OF TRAFFIC WARRANT DIFFERENT SEAT FACTORS: FOR EXAMPLE, A FACTOR OF 55 PER CENT MIGHT BE APPROPRIATE FOR ON-DEMAND TRAFFIC, AND ONE OF 72 1/2 PER CENT FOR APEX FARE TRAFFIC. IF THESE SEAT-FACTORS AVERAGED BETWEEN THE TWO AIRLINES CONCERNED CAN BE DEMONSTRATED TO HAVE BEEN ACHIEVED OVER A PERIOD OF AT LEAST SIX MONTHS, THE AIRLINES SHOULD MAKE RECOMMENDATIONS TO THEIR RESPECTIVE GOVERNMENT FOR INCREASES IN CAPACITY. SUCH PLANNING SEAT FACTORS SHOULD BE SUBJECT TO REVIEW AT THE REQUEST OF EITHER PARTY, BUT THE BURDEN OF PROOF WOULD LIE WITH THE AIRLINE WHICH WISHED TO VARY A PREVIOUSLY AGREED PLANNING SEAT FACTOR.

C) PLANNING FOR FUTURE INCREASES SHOULD TAKE ACCOUNT OF ALL

TRAFFIC ON THE AGREED ROUTES, BUT SHOULD ALSO REFLECT THE FACT THAT A HIGH PROPORTION OF TRAFFIC ON THE ROUTES IS TOD THIRD/ FOURTH FREEDOM TRAFFIC.

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