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H.K. airlines continue battle
http://www.sina.com.cn 2003/03/12 11:27  Shanghai Daily

  Hong Kong's two passenger airlines resumed their battle yesterday over Cathay Pacific Airways' bid to flysintosthe China's mainland and a lawyer said they will probably argue through the end of the week.

  Cathay, Hong Kong's main airline, wants to start flights to three mainland cities - Shanghai, Beijing and Xiamen. But its smaller partner-turned-rival Dragonair has complained that its business could be ruined if Cathay is allowed access to its traditional turf.

  Dragonair says those three routes account for 80 percent of its revenues on the mainland - and more than 50 percent of its overall revenues.

  Dragonair executives argued yesterday that if Cathay was allowedsintosthe Chinese main-land market, Dragonair would increase the number of flights to those three cities while cutting back on more marginal servicessintosthe mainland. That would leave travelers with less services.

  The smaller airline's Chief Executive, Stanley Hui, testified yesterday that it was "deplorable" for Cathay to have suggested earlier that Dragonair was a complacent company.

  "I do take very strong exception to these comments," Hui told Hong Kong's Air Transport Licensing Authority.

  A lawyer for Cathay, Charles Haddon-Cave, accused Dragonair yesterday of intentionally understating the numbers in its passenger growth from last year, to better play the role of an airline underdog that is being badly threatened by Cathay.

  Hui said he was not able to discuss the way the passenger statistics were calculated, but that Cathay would be able to ask other Dragonair executives.

  Cathay also accused Dragonair of charging too much when it picks up passengers Cathay has flownsintosHong Kong from other places, such as Australia, then takes themsintosthe China's mainland. Dragonair had no direct response.

  Cathay owns a minority stake in Dragonair and they have long fed passengers to one another, with Cathay focusing on longhaul routes and flights to key Asian business centers while Dragonair served China's mainland and secondary Asian cities.

  The airlines also became rivals last year on the lucrative Hong Kong-Taipei route when Dragonair started flying it in competition with Cathay.

  Cathay and Dragonair began their battle in public in January.




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