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Cathay Pacific flying to Beijing, Shanghai and Xiamen will have "limited impact" on other carriers

28 Jan 2003

Cathay Pacific Airways operating services to Beijing, Shanghai and Xiamen will have a limited impact on the business of other airlines operating those routes, yet will enhance Hong Kong's status as an aviation hub, a witness for the airline today told Hong Kong's Air Transport Licensing Authority (ATLA). The ATLA is currently hearing Cathay Pacific's application for licences to those three cities on the Chinese Mainland.

Cathay Pacific Director Corporate Planning Augustus Tang, in testimony to the Tribunal said: "By leveraging our network and giving our marketing and sales teams an opportunity to do their job - we will be able to create a virtuous circle. It will certainly improve the competitiveness of Hong Kong."

Figures presented to the Tribunal showed that in 2003 an estimated 7.1 million travellers will take connecting flights to Shanghai. Yet in 2002, only 785,000 passengers connected to Shanghai via Hong Kong, according to statistics published by Hong Kong¡¦s Civil Aviation Department.

Mr Tang told the Tribunal: "By capturing even a small percentage (of the existing connecting passenger traffic to the Chinese Mainland) Hong Kong will be able to benefit significantly."

He said there would be only a limited impact on the business of Hong Kong Dragon Airlines, which opposes Cathay Pacific's licence applications. Asked what impact Cathay Pacific will have on Dragonair on its Hong Kong to Shanghai route, Mr Tang said: "The (Dragonair) flight will still be profitable."

Mr Alan Hoo, SC, counsel for Dragonair, did not challenge the basis upon which Cathay Pacific had arrived at its figures which showed that the financial effect upon Dragonair would be limited.

Following legal submissions from Mr Charles Haddon-Cave, QC, counsel for Cathay Pacific, ATLA Chairman, High Court Justice William Stone, ruled that the interests of procedural fairness required that Dragonair's witnesses could not, when later giving testimony, challenge the basis of those Cathay Pacific figures and could only give evidence on how they derived their own calculations.

The ATLA hearing is scheduled to end tomorrow, Wednesday 29 January.