307
GRS 385
CONFIDENTIAL
FM FCO 171056Z JUL 79
CONFIDENTIAL
TO IMMEDIATE HONG KONG (GOVERNOR AND SCARFE)
TELEGRAM NUMBER 543 OF 17 JUL
4KK184/1
INFO PRIORITY CANBERRA
See (541) Bur
q
329
•
*0. 51
YOUR TELNO 955: UK/AUSTRALIA AIR SERVICES
1. WE AGREE THAT NEW HONG KONG-AUSTRALIA FARES PACKAGE SHOULD
BE INTRODUCED AT EARLIEST POSSIBLE DATE AND WE ARE CONSIDERING
WHAT FURTHER ACTION TO TAKE IMMEDIATELY AFTER NEXT MEETING OF
ASEAN ECONOMIC MINISTERS, SCHEDULED FOR 25 JULY.
2. HOWEVER WE DO NOT SEE HOW WE CAN LINK THE INTRODUCTION OF
PACKAGE WITH THE CONTINUED RETENTION BY QANTAS OF ITS PRESENT
PATTERN OF OPERATIONS TO HONG KONG IE 4 TIMES B747 PER WEEK, 2 OF
WHICH GO VIA MANILA. THE REDUCTION OF THIS FREQUENCY TO 3 P.W.
IS LINKED TO THE FULL IMPLEMENTATION OF ICAP AND DROPPING OF
THE COMBINATION OF HONG KONG AND MANILA ON THE SAME SERVICES.
WE AGREE THAT QANTAS SHOULD COME DOWN TO 3 FREQUENCIES WHERE THEY ›
SERVE HONG KONG DIRECT ON ALL THEIR SERVICES BUT WE WOULD NOT
AT THIS STAGE WISH TO PURSUE THE PARITY OF CAPACITY ARGUMENT WITH
AUSTRALIANS WHILST QANTAS ARE STILL COMBINING MANILA AND HONG
KONG ON THE SAME SERVICES.
3. THE TOTAL CAPACITY BEING OPERATED ON THE HONG KONG-EAST
AUSTRALIA ROUTE ONCE CPA SWITCH TO 3 TIMES B747 P.W. WILL BE 17
AND A HALF B 707 CAPACITY EQUIVALENTS COMPARED WITH EXISTING 18.
IT IS NOT THEREFORE EASY TO UNDERSTAND ARGUMENT THAT UNLESS THE
NEW LOW FARES ARE INTRODUCED, THERE WILL BE EXCESS CAPACITY. AS FOR WHETHER IT IS REASONABLE THAT QANTAS SHOULD MOUNT ↳ FREQUENCIES AS AGAINST CPA'S 3, THIS WAS DISCUSSED AT LENGTH WHEN BA CAME OFF THE ROUTE AND CPA DID NOT INCREASE ITS CAPACITY ACCORDINGLY SO
AS TO MATCH QANTAS. THEN YOU ARGUED THAT QANTAS NOMINAL CAPACITY
HAD TO BE DE-RATED BECAUSE OF THE E. AUSTRALIA-MANILA TRAFFIC IT
CARRIED ON ITS HONGKONG SERVICES. ARE YOU NOW ARGUING
DIFFERENTLY ?.
4. IT WOULD BE HELPFUL TO HAVE DETAILS OF THE DIVERSION OF
TRAFFIC MENTIONED IN PARA 5 OF TUR.
CARRINGTON
FILES
MAED
HK & GD
SPD
MISS BROWN MR MURRAY
COPIES TO: CAIR/DOT.
CONFIDENTIAL
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