TNAG-1177-FCO40-1479-Air-services-between-Hong-Kong-and-South-East-Asia-1982 — Page 124

CONFIDENTIAL

Draft Brief

VISIT BY FOREIGN AND COMMONWEALTH SECRETARY TO MALAYSIA,

FEBRUARY 1982

Air Services

Points to Make

There is no problem about introducing Boeing 747s on the four MAS services to London at the capacity of their existing DC-10s. If MAS want full B747 capacity - over 25% more seats

we have said all along that we will look at their case

sympathetically within the context of Annex B of the 1979

Memorandum of Understanding, which anticipated such requests and provided guidelines for determining capacity increases.

This is a technical matter which needs to be examined in some

detail and we shall be happy to arrange talks if the Malaysians

want them. Malaysians will find that we honour our agreements scrupulously (and in this case sympathetically) but it would be

quite wrong to give any undertakings about the conclusions to be

drawn before both sides have examined the facts together.

Background

1 MAS currently operate four DC-10s to London, two of which come.

through from Australia. BA operate four Boeing 747s, all continuing

to Australia. In the summer of 1981 MAS purchased from BA two new Boeing 747s for delivery in early 1982 with Rolls Royce engines.

The terms of this deal were attractive in themselves, but

Malaysians asked for assurances that they would be able to use

the new aircraft at full capacity on their London services. Under

pressure from BA who were anxious to dispose of surplus aircraft, the acting High Commissioner gave, on instructions, an indication

in writing that