TNAG-2546-FCO40-3721-Air-services-agreement-between-Hong-Kong-and-Hungary-1992 — Page 6

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FM HONG KONG

TO ROUTINE FCO

TELNO 1209

OF 050645Z MAY 92

INFO ROUTINE DTP, BUDAPEST

DTP (FOR IAD).

NK

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HKCC181/29

сп

ра

4

155433

MDLIAN 3261

YOUR TELNO 729: HONG KONG/HUNGARY AIR SERVICES.

TWO REPRESENTATIVES OF MALEV HUNGARIAN AIRLINES CALLED ON ESB LAST DECEMBER AND EXPRESSED THE WISH OF THE HUNGARIAN AUTHORITIES TO NEGOTIATE AN ASA WITH HONG KONG. APART FROM GIVING THEM THE USUAL BRIEFING ON OUR ASA PROGRAMME, WE EMPHASISED THE IMPORTANCE OF MALEV BEING ABLE TO DEMONSTRATE THAT THERE WAS SUFFICIENT LONG TERM END-TO- END TRAFFIC DEMAND TO JUSTIFY AN ASA BEFORE WE WOULD CONSIDER NEGOTIATING WITH THEM. THE APPROACH FROM THE HUNGARIAN EMBASSY SEEMS A FOLLOW UP TO THAT VISIT.

2.

MALEV'S PLAN, AS CONVEYED TO US AT THE DECEMBER MEETING, WAS TO INTRODUCE A TWICE WEEKLY SERVICE TO HONG KONG IN 1993 USING B767 ER AIRCRAFT. THE AIRCRAFT WOULD BE NEW EQUIPMENT AND WERE SCHEDULED FOR DELIVERY IN END 1992. THE SERVICE WOULD BE COMBINED WITH EITHER BANGKOK OR SEOUL. WE WERE ALSO TOLD THAT THEY HAD CONCLUDED ASAS WITH SOUTH KOREA AND SINGAPORE. NEGOTIATIONS WITH THAILAND WERE ALMOST COMPLETE, AND THOSE WITH JAPAN WERE PROGRESSING WELL.

3. DESPITE THE ENTHUSIASM OF THE HUNGARIAN AUTHORITIES, WE DO NOT FEEL THAT THERE IS JUSTIFICATION FOR US TO COMMENCE ASA NEGOTIATION WITH THEM. ACCORDING TO HONG KONG TOURIST ASSOCIATION STATISTICS, THE NUMBER OF VISITORS FROM EASTERN EUROPE TO HONG KONG DURING THE PAST FIVE YEARS WAS ONLY IN THE REGION OF A FEW THOUSANDS ANNUALLY. VISITORS FROM HUNGARY TO HONG KONG ARE NO MORE THAN JUST A COUPLE OF HUNDREDS. THE MARKET SIZE OF THE HONG KONG HUNGARY ROUTE IS THEREFORE DOUBTFUL. NO HONG KONG AIRLINES HAVE THE WISH TO OPERATE TO HUNGARY IN THE FORESEEABLE FUTURE.

FURTHERMORE, GIVEN THE CURRENT PROBLEM IN OUR ASA EXERCISE AND THE DIFFICULTY TO COMMENCE NEW ASA NEGOTIATIONS, THIS IS CERTAINLY NOT THE TIME TO START WITH THE HUNGARIANS. IN SUM, WHILST WE WOULD NOT RULE OUT THE POSSIBILITY OF NEGOTIATING AN ASA WITH HUNGARY IN THE FUTURE, THERE IS NO PRACTICAL NEED OR JUSTIFICATION TO PURSUE THE

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