stickyb
11th Jun 2001, 07:00
from this morning's newspaper....(SCMP)
"Cathay Pacific and Dragonair will be allowed to compete on most routes to the mainland following a deal with Beijing that will liberalise Hong Kong's longstanding "one airline, one route" policy.
The agreement, signed in March but still unannounced, is believed to be part of a deal between the two SAR carriers to begin directly competing on major Taiwan and mainland routes, according to a source close to the negotiations.
At present, only one designated SAR carrier, Dragonair, has the right to service mainland destinations from Hong Kong.
But under the terms of the new agreement, the SAR will be able to grant destination rights on most mainland routes to a second airline, significantly expanding the frequency and number of mainland destinations to which SAR carriers are allowed to fly.
"Most of the mainland routes - in excess of 90 per cent and especially the major ones - will now have multiple airline designation," the source said.
Under the terms of the deal, Beijing will automatically approve the SAR's carrier selections on any route. The new agreement lays to rest Hong Kong's 50-year-old "one airline, one route" policy on competition by giving the SAR Government the option to allow the two carriers to compete head-to-head on passenger services to certain routes if demand justifies it.
The Government made its first moves to alter the policy last year when it approved Dragonair's application to launch cargo services to Dubai, Amsterdam and Manchester.
Dragonair and Cathay now compete on five cargo routes to Asia, Europe and the Middle East.
"The Government is now following a policy of progressive liberalisation in air services," the source said, adding that the SAR's overall economic expansion was the dominant theme in government policy.
Dragonair gained the right to fly to mainland destinations in April 1990 when Cathay acquired a stake in the fledgling airline and decided to abandon its mainland schedule in favour of Dragonair.
At the time, Cathay flew four times a week to Shanghai and three to Beijing.
It is believed that, in exchange for granting Dragonair's wish to compete on the lucrative Hong Kong-Taipei route, Cathay will be allowed to resume mainland services.
The source said it was the Government's policy to "protect competition, not the competitors".
The source said it was understood that Dragonair's application to service Taipei would be looked at on the basis of whether the route needed additional capacity, rather than on protecting the existing carriers.
"Certainly the Government has the flexibility under existing policy to grant competing airlines access to the same route if the traffic justifies it. There are no sacred cows anymore. The Government will keep an open mind about any application."
But the source declined to say whether Cathay had already made formal applications to begin servicing mainland routes, citing the right to commercial confidentiality.
A Cathay spokesman declined to say whether the carrier had reapplied for the mainland routes, but did say that the company was always interested in resuming services to the mainland.
"It depends on the SAR and mainland governments, but we are monitoring the situation closely and we will seek to fly there when the time is right," the spokesman said.
A date for Dragonair to begin servicing Taipei will depend largely on when a new agreement can be struck, as the existing five-year deal between Hong Kong and Taiwan is set to expire tomorrow.
Negotiations have been stalled due to political differences between Beijing and Taipei. The SAR Government has no direct contact with Taiwan.
While Beijing considers cross-strait flights domestic in nature, Taiwan is said to want to negotiate a new pact through its Mainland Affairs Office."
"Cathay Pacific and Dragonair will be allowed to compete on most routes to the mainland following a deal with Beijing that will liberalise Hong Kong's longstanding "one airline, one route" policy.
The agreement, signed in March but still unannounced, is believed to be part of a deal between the two SAR carriers to begin directly competing on major Taiwan and mainland routes, according to a source close to the negotiations.
At present, only one designated SAR carrier, Dragonair, has the right to service mainland destinations from Hong Kong.
But under the terms of the new agreement, the SAR will be able to grant destination rights on most mainland routes to a second airline, significantly expanding the frequency and number of mainland destinations to which SAR carriers are allowed to fly.
"Most of the mainland routes - in excess of 90 per cent and especially the major ones - will now have multiple airline designation," the source said.
Under the terms of the deal, Beijing will automatically approve the SAR's carrier selections on any route. The new agreement lays to rest Hong Kong's 50-year-old "one airline, one route" policy on competition by giving the SAR Government the option to allow the two carriers to compete head-to-head on passenger services to certain routes if demand justifies it.
The Government made its first moves to alter the policy last year when it approved Dragonair's application to launch cargo services to Dubai, Amsterdam and Manchester.
Dragonair and Cathay now compete on five cargo routes to Asia, Europe and the Middle East.
"The Government is now following a policy of progressive liberalisation in air services," the source said, adding that the SAR's overall economic expansion was the dominant theme in government policy.
Dragonair gained the right to fly to mainland destinations in April 1990 when Cathay acquired a stake in the fledgling airline and decided to abandon its mainland schedule in favour of Dragonair.
At the time, Cathay flew four times a week to Shanghai and three to Beijing.
It is believed that, in exchange for granting Dragonair's wish to compete on the lucrative Hong Kong-Taipei route, Cathay will be allowed to resume mainland services.
The source said it was the Government's policy to "protect competition, not the competitors".
The source said it was understood that Dragonair's application to service Taipei would be looked at on the basis of whether the route needed additional capacity, rather than on protecting the existing carriers.
"Certainly the Government has the flexibility under existing policy to grant competing airlines access to the same route if the traffic justifies it. There are no sacred cows anymore. The Government will keep an open mind about any application."
But the source declined to say whether Cathay had already made formal applications to begin servicing mainland routes, citing the right to commercial confidentiality.
A Cathay spokesman declined to say whether the carrier had reapplied for the mainland routes, but did say that the company was always interested in resuming services to the mainland.
"It depends on the SAR and mainland governments, but we are monitoring the situation closely and we will seek to fly there when the time is right," the spokesman said.
A date for Dragonair to begin servicing Taipei will depend largely on when a new agreement can be struck, as the existing five-year deal between Hong Kong and Taiwan is set to expire tomorrow.
Negotiations have been stalled due to political differences between Beijing and Taipei. The SAR Government has no direct contact with Taiwan.
While Beijing considers cross-strait flights domestic in nature, Taiwan is said to want to negotiate a new pact through its Mainland Affairs Office."
