TNAG-0865-FCO40-1075-Involvement-of-Hong-Kong-in-air-services-agreements-1979 — Page 193

CONFIDENTIAL

not be able to continue to delay the announcement of new fares

to Hong Kong if an ASEAN/Australia settlement is unduly delayed,

but wish to wait at least until after the next meeting of ASEAN

Economic Ministers, scheduled for 25 July.

3.

Although we would be glad to see the early introduction

of cheaper fares between Hong Kong and Australia, neither we

nor the DOT understand why CPA claim they are losing traffic under

present arrangements or why the 3 August date should be so critical.

ICAP fares have not yet been introduced between Australian and

ASEAN countries so Hong Kong are at no disadvantage in this

respect. It is true that CPA will introduce 3 x 8747s a week- but

instead of 8 x 8707s which is in fact a slight drop in capacity.

4.

Hong Kong also seem unnecessarily worried about Qantas

frequencies.

Qantas at present fly 4 x B747s to Hong Kong per

week, two of them via Manila. When ICAP is fully introduced

they have agreed to drop this to 3 direct services per week to

Hong Kong. Clearly Qantas cannot sensibly make this change until

agreement has been reached between Australia and the Philippines

on direct end to end services under the ICAP system.

5.

The DOT are preparing a draft telegram to find out exactly

what Hong Kong are worried about, but do not want to press the

Australians again until after the 25 July ASEAN/Australia meeting,

unless Hong Kong can produce evidence of damage from this

CONFIDENTIAL

/further