CONFIDENTIAL
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up to three services a week by CPA on the Hong Kong-London route (with the sixth freedoming from Japan which they would expect under those conditions) as an offset to their fifth freedom earnings on the Silk Route. Any reactions are therefore most likely to take the form of Japanese pressure to reduce the imbalance of earnings in the region, which would no longer be protected to the same extent by the excess of JAL's earnings over BA's earnings on the
trunk routes.
24.
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On the other hand, there could be important indirect effects arising from the disturbance of the present BA/CPA relationship. These will be discussed in the paper about the wider implications of this proposal.
25. It is unlikely that our relations with Japan would be significantly affected if competition on the London-Hong Kong route were provided by RCAL, Skytrain, or whole-plane charters.
Thailand
26.
t
The understandings reached with Thailand on 6 March 1979 are based upon the concept that British Airways will steadily build up to an approximate half-share of the London-Bangkok market and tha t' in order to achieve this they will devote substantially more capacity and frequency to that market than they have done in the past.
This is to be achieved by combining Bangkok with Hong Kong on the days when Hong Kong enjoys a "double daily" service to London. Accordingly, in 1980 British Airways will be operating three
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services a week in each direction through Bangkok to Hong kong and, will thus match Thai International's frequency between Bangkok and London. The "fine tuning" of the capacity to be provided by
two airlines will be achieved
the
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b.
East
in the case of Thai International, by combining traffic to London with traffic to the Middle (where the yields from Bangkok are nearly as high AR those on the through service to London) and to some other point or points in Europe; and
in the case of British Airways through variations in the proportious of capacity reserved on their "double daily services for London-Hong Kong and London- Bangkok traffic.
The agreement envisages that British Airways and Thai International will arrange their scheduling in such way #5 to provide as nearly as possible a ddily service between them and that they will market their "product" jointly They envisage
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A increasing from six services a week for the two airlines to daily service (again for the two airlines combined) as soon possible so as to match the frequency offered by the sixth freedomers such as KLM. The next additional frequency will be provided by British Airways.
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CONFIDENTIA!
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