Paul Lewis/SEATTLE
SWIRE PACIFIC, the UK parent of Cathay Pacific and Dragonair, is emphatic that it intends to remain a major participant in Hong Kong's aviation industry. It dismisses speculation that its grip may be weakening following the recent deal with China which will put a large chunk of its airline holdings into Chinese hands.
"It has always been our intention to remain thoroughly and utterly involved in aviation and airlines in Hong Kong," says Cathay chairman Peter Sutch. He says that the deal set up between Swire and Chinese investment groups Citic Pacific and China National Aviation (CNAC) should help to strengthen, rather than weaken, the group's position.
"We now have a clearly spelled agreement," he says, adding that the ownership changes are expected to be completed shortly.
The HK$6.3 ($815 million) sale of new equity to Citic will, for the first time, dilute Swire's absolute majority interest in Cathay to 43.9%, but Sutch is quick to dismiss speculation that it will lead to further erosion of the group's control over the airline.
"The scene has largely been set for the next ten to 20 years by the agreement that we now have. Chinese aviation has got a substantial interest in Hong Kong, which I think is a good thing, because it means they're going to make it work," argues Sutch.
Of more fundamental significance in the short term is Swire's and Citic's ceding of control of Dragonair to CNAC (Flight International, 8-14 May, P13). CNAC plans to install its own stand-alone management team, raising the prospect of a return to competition between Dragonair and Cathay.
Sutch points out that confidence in Cathay's future is demonstrated by its continuing stream of aircraft orders, with the bulk of the deliveries due well after the colony is handed back to China in 1997.
The airline expects to finalise the next batch of aircraft orders within the year. Cathay still has outstanding orders for 23 aircraft, including ten Boeing 777-200/300s and six Airbus Industrie A340-300Es and four A330-300s, scheduled for delivery over the next four years.
It is keen to secure follow-on production positions, however. Having just taken its first 777-200, the airline is scheduled to receive its first A340-300E at the end of June.
"We'll definitely be ordering aircraft beyond 2000, otherwise we will stop growing," says Sutch. "We're interested in plans that Boeing is developing to take the 747 to its next stage," he adds.
Apart from the proposed growth-747-500/600X, Cathay will almost certainly be exercising some existing options, which include ten 777s, 16 A330/340s and six 747-400s. Interest is also understood to focus on either the ultra-long-range 777-100/200X or A340-8000.
Source: Flight International
