GRS 950
CONEIDENTIAL
CONFIDENTIAL
18T
Akk, 184/2DA
RECEIVED A
19 JUN 19
FM KING 183300Z JUN 79
DESKBY 1889602 ·
TO IMMEDIATE FCO
TELEGRAM NUMBER 565 OF 18 JUNE.
INFO PRIORITY HONG KONG.
FOLLOWING FROM DELEGATION.
IN:
183
80
YOUR TELNO.365:
UK/PRC AIR SERVICES NEGOTIATIONS.
1.
GRATEFUL INSTRUCTIONS ÎN TUR.
2.
WE ASSUME THAT QUOTE HONG KONG-PEKING UNQUOTE IN LINE
12 OF PARA 2 SHOULD READ QUOTE HONG KONG-SHANGHAI UNQUOTE.
3. HOWEVER, WE ARE PERPLEXED BY ARRANGEMENTS RECORDED IN LINES
14-17 PARA 2 FOR BA TO QUIT THE HONG KONG-PEKING ROUTE ALTOGETHER
FOUR YEARS AFTER THE AGREEMENT IS INITIALLED. REASONING IN OUR TELNO.564 (WHICH YOU SAY YOU ACCEPT) LED TO CONCLUSION THAT THERE IS INSUFFICIENT INFORMATION AVAILABLEMTO SET ANY REALISTIC TIME
LIMIT AT PRESENT... THIS CONCLUSION WAS BASED ON CONSIDERABLE AMOUNT
OF WORK DONE HERE, WITH BA'S ASSISTANCE, ON FORECASTING TRAFFIC GROWTH, BA REQUIREMENTS FOR VIABLE OPERATION, AND LIKELY TIME SCALES. AFTER ALLOWING FOR CONTRIBUTION FROM TRAFFIC TO AND FROM .. INTERMEDIATE POINT OR POINTS, AND ASSUMING CURRENT FARES AND COSTS, BA CALCULATED THEY WOULD NEED ABOUT 200 END-TO-END PASSENGERS PER
FLIGHT FOR PROFITABLE OPERATION ON DIRECT ROUTE ING. ON FAIRLY
OPTIMISTIC ASSUMPTIONS ABOUT DIVISION OF TRAFFIC AND SIXTH FREEDOM-
ING OVER LONDON, AND ASSUMING 20 PERCENT GROWTH RATE (IE CURRENT RATE FOR TRAVEL WITHIN ORIENT) WE FORECAST ONLY ABOUT 100 PER FLIGHT IN 1983/4. IN THE UNLIKELY EVENT THAT THE GROWTH RATE WAS DOUBLE THIS (WHICH WOUULD REQUIRE ASSUMPTION OF PENT UP DEMAND AND HIGH RATE OF HOTEL CONSTRUCTION) THERE WOULD STILL BE ONLY
184
THESE CALCULATIONS ARE IN LINE WITH INITIAL FORECAST IN
PARA 10 OF OUR TELNO.494 OF 29 MAY. PRESUMABLY BA ARE THEREFORE
BANKING ON HIGHER GROWTH RATE THAN INFORMATION AVAILABLE HERE
SUGGESTS IS REALISTIC ?
CONFIDENTIAL
1.
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