Cathay Wins Licence For China Flights

Cathay Pacific Airways has won a licence to fly to three Chinese cities, Beijing, Shanghai and Xiamen – despite Dragonair’s objections.

Hong Kong’s Air Transport Licensing Authority granted Cathay the licence with immediate effect for five years, although Cathay said operations into China still depended on talks between the two governments. The carrier now has the right to fly three round-trip services a day between Hong Kong and Shanghai and between Hong Kong and Beijing, and three times a week between Hong Kong and Xiamen. But analysts said access to China after a 12 year absence would mean little in the short term, given the adverse impact of SARS.

Dragonair, which controls routes into China, described the ruling as “unfair” and said it would result in its “financial devastation”. It is examining its options with legal representatives. Dragonair, which is almost 18 per cent owned by Cathay and ultimately controlled by China National Aviation Co, has estimated in the past that it would lose total revenues of HK$1 billion (US$128 million) if Cathay starts flying on the above routes. But according to Cathay’s calculations, Dragonair’s lost revenue would only be about HK$300 million.

http://www.airlinequality.com/news/cathay.htm