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3. HOWEVER, THIS IS PAST HISTORY, AND THE PRESENT ISSUE IS WHAT CAN
BE DONE TO HELP PAN AM IN THEIR PRESENT DIFFICULTIES AT TEHRA
THE BASIS OF OUR CONSIDERATION IS AS STATED IN JOHN STEELE'S
LETTER OF 27 MARCH TO JIM ATWOOD, AND WE ARE PREPARED UNDER THE PROVISIONS OF ARTICLE 2(5) OF THE BERMUDA 2 AGREEMENT TO ASSIST
PAN AM ON THE ROUND-THE-WORLD SERVICE BECAUSE OF THE PHYSICAL
DISRUPTION OF SERVICES AT TEHRAN. THE AGREEMENT REFERS TO THE GRANT
OF RIGHTS FOR SUCH TIME AS MAY BE NECESSARY TO FACILITATE VIABLE
OPERATIONS. WHAT IS VIABLE IS A MATTER OF JUDGEMENT BUT THERE IS
CLEARLY NO REQUIREMENT TO GIVE RIGHTS WHICH WOULD PROVIDE MORE
REVENUE THAN THOSE TEMPORARILY LOST.
4. WE ARE THEREFORE GRANTING FULL TRAFFIC RIGHTS BETWEEN LONDON AND
BOMBAY AND BETWEEN HONG KONG AND BOMBAY ON TWO OUT OF THE SEVEN
FLIGHTS PER WEEK ON US ROUTE 2 WHICH ARE PERMITTED UNDER THE AGREEMENT. OUR READING OF THE AGREEMENT IS THAT THE ADDITIONAL RIGHTS SHOULD CEASE IMMEDIATELY THAT TEHRAN IS AGAIN PHYSICALLY
AVAILABLE. HOWEVER, WITHOUT PREJUDICE TO THIS INTERPRETATION, WE PROPOSE ON THIS OCCASION TO GRANT THESE RIGHTS UNTIL 31 MARCH
1980 WITH A REVIEW IN FEBRUARY TO SEE WHETHER ANY ADDITIONAL RIGHTS
ARE APPROPRIATE FROM 1 APRIL 1980. OF COURSE IF PAN AM CHOOSES TO RE-START SCHEDULED SERVICES AT TEHRAN BEFORE 31 MARCH, THE
SPECAIL RIGHTS AT BOMBAY WOULD LAPSE AT THAT TIME.
5. I HOPE YOU WILL SEE THIS AS AN ADEQUATE AND TIMELY RESPONSE TO YOUR REQUEST WHICH I RECEIVED ON 3 DECEMBER, TAKING INTO ACCOUNT OUR NEED TO CONSULT THE GOVERNMENT OF HONG KONG. WE BELIEVE THAT
FULL RIGHTS ON TWO SERVICES PER WEEK OPERATING THROUGH BOMBAY WILL BE A BROAD RECOMPENSE FOR THE LOSS OF 5TH FREEDOM TRAFFIC REVENUE
ON THE LONDON-TEHRAN-HONG KONG SECTORS OF THE THREE FLIGHTS PER
WEEK WHICH PAN AM HAS UNTIL RECENTLY OPERATED. BUT IF, AFTER SOME EXPERIENCE, PAN AM CONCLUDE THAT THERE IS AN ECONOMIC JUSTIFICATION FOR TRAFFIC RIGHTS ON ADDITIONAL SERVICES THROUGH BOMBAY, WE
SHALL OF COURSE BE PREPARED TO STUDY THE EVIDENCE. I SHOULD PERHAPS
MAKE IT CLEAR THAT WE SEE NO OBLIGATION TO GRANT SUBSTITUTE RIGHTS
ON THE GROUNDS THAT TEHRAN IS DECLINING IN VALUE IN TRAFFIC
GENERATION TERMS OR BECAUSE THE IRANIAN GOVERNMENT MIGHT IN THE
LONG TERM ACT PROPERLY AND LEGALLY TO WITHDRAW US RIGHTS AT TEHRAN.
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/6. I MUST
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