NICHOLAS IONIDES SINGAPORE
After more than a decade, Cathay Pacific Airways is seeking to resume services to mainland China in a move that will put it head-to-head with Hong Kong's second carrier Dragonair.
Cathay flew to major Chinese destinations until 1990, when it bought into Dragonair and the Hong Kong government introduced a "one airline, one route" policy that limited services on any route to one Hong Kong-based carrier.
Although Cathay still owns a minority stake in Dragonair together with its own parent Swire Pacific, Dragonair has been steadily forging its independence from the major carrier since Chinese interests took control in 1996. The gradual erosion of the one airline, one route policy started two years ago when Dragonair launched dedicated freighter services to Europe via the Middle East to some of the same cities as Cathay. The Hong Kong government said at the time that it would consider a further easing of the policy if it was in Hong Kong's interests.
In July this possibility became a reality, after a new air services agreement was reached between Hong Kong and Taiwan that gave Dragonair passenger and cargo rights to serve the highly lucrative Hong Kong-Taipei route. Cathay had for years been the only Hong Kong airline that operated the route. It is a much used path because direct flights between Taiwan and China have been banned for more than 50 years, forcing stopovers in third points, normally Hong Kong or Macau.
Cathay now confirms that a request has been made to the Hong Kong government for a licence to fly to mainland China again. It had been talking informally to the Civil Aviation Administration of China (CAAC) and its Hong Kong counterpart about resuming flights. It confirmed publicly that an application would be made after the head of the CAAC, Yang Yuanyuan, said on state-run media that Cathay would not be barred from returning to the country.
A long approval process is expected. Once the airline is awarded a licence to fly to China, Cathay will be able to take part in air services talks between Hong Kong and the mainland. It is likely to request rights to serve Beijing, Guangzhou and Shanghai, which are already served by Dragonair and several mainland Chinese airlines.
Hong Kong and China last agreed to boost air services early in 2000 and Dragonair has since substantially boosted its China coverage. China took control of Hong Kong from the UK in mid-1997.
Source: Airline Business
