CONFIDENTIAL
A. CPA'S ADDITIONAL CAPACITY REQUIREMENTS (WHICH INVOLVES AIRCRAFT SUBSTITUTION) WOULD DEVELOP INTO A CLIFF-HANGING SITUATION WITH A DEADLINE OF MAY 1980, AND PLACE US AT AN-OBVIOUS NEGOTIATING DISADVANTAGE AS WAS THE CASE IN SEPTEMBER 1975.
B. GIA APPEAR TO HAVE A REQUIREMENT FOR ADDITIONAL SERVICES TO AND
BEYOND HONG KONG.
4. IT WOULD THEREFORE SEEM THAT A REASONABLY BALANCED REGIONAL AGREEMENT COULD BE NEGOTIATED WHICH WOULD SATISFY BOTH CPA AND GIA
REQUIREMENTS FOR AT LEAST TWO OR THREE YEARS. WE HOPE THAT NEW
ARRANGEMENTS MIGHT BE ON THE LINES OF:
A. UK RIGHTS
7 X 747 HKG/SIN/JKT VV
6 X L10 HKG/KUL/JKT/PER VV (NOT MORE THAN 3 SERVICES BEYOND JKT)
B. INDONESIAN RIGHTS
7 X D1 JKT/HKG VV
6 X D10 JKT/SIN/HKG/TYO VV
5. SUCH A BARGAIN WILL, OF COURSE, PROVIDE FOR ADDITIONAL UPLIFT/ DISCHARGE RIGHTS ON THE SIN/JKT SECTOR WHICH IS WELL KNOWN TO BE SENSITIVE TO THE INDONESIANS. CPA HOPE THAT AT LEAST A MINIMUM OF 20% PASSENGERS A FLIGHT CAN BE ACHIEVED. CPA HAVE ALSO EXPRESSED
AN INTEREST IN OBTAINING DENPASAR AND WE HOPE THIS CAN BE BORNE IN MIND DESPITE THE RATHER GLOOMY FORECAST FROM JAKARTA (TELNO 239 OF 26 JULY).
.6. IF THE JAN TO APRIL 1979 EARNINGS PICTURE IS ANY GUIDE, WE
SHOULD BE BARGAINING FROM A POSITION OF STRENGTH:
US DOLLARS
CPA
GIA
3RD/4TH 3,312,592 6,499,041
5TH 1,539,244
TOTAL
4,671,834 6,499,041
GIA HAVE CLEARLY DEVELOPED A SUBSTANTIAL LEAD IN OVERALL EARNINGS REFLECTING THE INCREASING ACCEPTANCE OF THEIR DAILY DIRECT DC-10 SERVICE AND ALSO THE CARRIAGE OF HKG/DPS VV TRAFFIC (WHICH APPEARS IN THE STATISTICS AS HKG/JKT VV TRAFFIC)
7. AFTER A PERIOD OF STAGNATION UNTIL THE END OF 1977, SUSTAINED GROWTH HAS BEEN MAINTAINED WITH AVERAGE GROWTH RATE OF 20
PERCENT PER ANNUM BEING ACHIEVED.
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CONFIDENTIAL
16.
COL ALDELEO
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