TNAG-1177-FCO40-1479-Air-services-between-Hong-Kong-and-South-East-Asia-1982 — Page 123

CONFIDENTIAL

Air Services Asean

to which ASEAN

country's doe Xlus

his apply.

Defensive briefing

1

There are no points to raise with ASEAN members generally.

2 There was some difficulty in air services with ASEAN

during 1979 and 1980 as a result to the Australian policy at

that time which sought to exclude ASEAN carriers from access to

low fare traffic between London and Australia passing through

their territories. This dispute, in which we were necessarily

involved, was satisfactorily resolved in 1981 when reasonable

access to both through traffic and stopover traffic at the low

Super Apex fares available to UK and Australiancarriers was

formally extended to the ASEAN carriers on the route as well.

3

In an

Fares continue to be a problem however since all the ASEAN

carriers discount quite freely below the agreed rates.

attempt to deal with their situation BA have recently entered the

market at the same reduced levels, with CAA approval. We have

informed the ASEAN Governments of BA's action and BA are in touch

with the ASEAN carriers with a view to withdrawing their reduced

fares if the ASEAN carriers agree to do the same. If the matter is

raised Lord Carrington should point to discussions between the

airlines as the best way to resolve what is essentially a

commercial problem, but they are of course entitled to take the

matter up with the UK aeronautical authorities (i.e. Department of Trade) if they wish, in accordance with the terms of our various

Air Services Agreements. No undertakings should be given beyond

consider a promise to consult and if matching fares are proposed.

CAIR1

Department of Trade

14 January 19 2