TNAG-1177-FCO40-1479-Air-services-between-Hong-Kong-and-South-East-Asia-1982 — Page 58

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BETWEEN THE TWO AIRLINES ON SERVICES BETWEEN HONG KONG AND

SINGAPORE AND NO SHORTAGE OF COMPETITION FOR CATHAY ON OTHER

SERVICES TO AND FROM HONG KONG.

4. PASSENGERS PREFER NON-STOP SERVICES WHEREVER POSSIBLE, AND AS

TRAFFIC GROWS IT BECOMES LESS AND LESS NECESSARY TO RUN QUOTE BUS-

STOP UNQUOTE SERVICES WHICH ARE SLOWER AND LESS CONVENIENT.

PASSENGERS WILL THEREFORE BENEFIT IF SIA CEASE TO COMBINE HONG KONG

SERVICES WITH OTHER POINTS SUCH AS BANGKOK, TAIPEH AND TOKYO.

5. IT IS DIFFICULT TO SEE HOW THE SINGAPORE AUTHORITIES COULD WHIP

UP MUCH PUBLIC SUPPORT FOR THE CONTINUED RIGHT OF SIA TO CARRY

LARGE NUMBERS OF HONG KONG ORIGINATING PASSENGERS TO OTHER POINTS

IN SOUTH EAST ASIA ESPECIALLY WHEN ONE CONSEQUENCE MUST BE FEWER

DIRECT SERVICES FROM SINGAPORE TO THESE POINTS.

6. YOU WILL NOT WISH TO REFER PUBLICLY TO ARBITRATION. THE

PROCEDURES TO BE FOLLOWED ARE SET OUT IN ARTICLE 13 OF THE ASA, BUT

THERE HAVE BEEN ONLY A HANDFUL OF ARBITRATIONS IN CIVIL AVIATION

HISTORY, SO THAT THE CONSEQUENCES ARE UNPREDICTABLE. IN AT LEAST

ONE CASE THE SUCCESSFUL PARTY DID NOT LONG ENJOY THE FRUITS OF

VICTORY OF ARBITRATION SINCE THE LOSER PROMPTLY DENOUNCED THE ASA.

LIM HOCK SAN IS WELL AWARE OF THIS POSITION.

7. SINGAPORE IS VERY IMPORTANT TO BA'S AUSTRALIAN SERVICES, BUT

LONDON AND HONG KONG ARE PROBABLY EVEN MORE IMPORTANT TO SIA WHO

IN ANY CASE OUTEARN THE UK AIRLINES BY MORE THAN 2:1 ON BOTH

ROUTES. ON BALANCE THEREFORE WE BELIEVE THAT SIA AND THE SINGAPORE

AUTHORITIES WILL HAVE TO COME TO TERMS SOONER OR LATER UNLESS THEY

CAN OBTAIN SATISFACTORY ALTERNATIVE ROUTEINGS FOR ADDITIONAL

TRANSPACIFIC SERVICES. GIVEN THE IMPORTANCE OF HONG KONG

ORIGINATING TRAFFIC ON THEIR EXISTING SERVICES WE JUDGE THAT THIS

WILL BE DIFFICULT TO ACHIEVE.

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