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CX Receives Licenses To Fly To Mainland  
User currently offlineAirways From Switzerland, joined Mar 2001, 880 posts, RR: 12
Posted (11 years 5 months 4 days 15 hours ago) and read 3235 times:

I have just got the information about today's decision of the HK Air Transport Licensing Authority about Cathay's request to fly to the mainland.

Cathay Pacific has recevied licenses to fly three times a day to Beijing, three times a day to Shanghai and three times a week to Xiamen. I wonder when they will launch these routes. But probably not this summer...

I haven't heard anything from Dragonair about that, but I suppose they're not happy with these news. Especially in these hard times...

Michael
http://airsider.net

30 replies: All unread, showing first 25:
 
User currently offlineN754pr From , joined Dec 1969, posts, RR:
Reply 1, posted (11 years 5 months 4 days 14 hours ago) and read 3203 times:

Thats very interesting if true. As to when they will start, thats a very big question.

User currently offlineAirways From Switzerland, joined Mar 2001, 880 posts, RR: 12
Reply 2, posted (11 years 5 months 4 days 14 hours ago) and read 3194 times:

Well, I think we can be pretty sure it's true! The news came straight out of Cathay's Press Department.

Michael
http://airsider.net


User currently offlineN754pr From , joined Dec 1969, posts, RR:
Reply 3, posted (11 years 5 months 4 days 14 hours ago) and read 3178 times:

Its confirmed, was on the news.

User currently offlineCathay Pacific From Australia, joined May 2000, 1864 posts, RR: 1
Reply 4, posted (11 years 5 months 4 days 13 hours ago) and read 3132 times:

Finally some good news from CX!  Smile


cathay pacific, now you're really flying
User currently offlineAA61hvy From United States of America, joined Nov 1999, 13977 posts, RR: 57
Reply 5, posted (11 years 5 months 4 days 13 hours ago) and read 3132 times:

What planes will they use? A330 to start out with?


Go big or go home
User currently offlineLadevale From , joined Dec 1969, posts, RR:
Reply 6, posted (11 years 5 months 4 days 9 hours ago) and read 3052 times:

Significant news for the oneworld alliance...

All onworld airlines that codeshare with Cathay will probably add their codes to these flights. This effectively means that oneworld will be the first alliance with a connecting hub serving the Chinese market (within the Chinese market itself). Good work Cathay.

Wow, consecutive weeks of bad news for Star. Conversely, consecutive weeks of good news for oneworld. First, AA and BA are given US government approval to codeshare on routes beyond their respective hubs, and now this. The AA/BA codeshare has the potential to damage the status of UA/BMI at LHR, and of Frankfurt and CDG as connecting hubs for their respective alliances. The Cathay entry into China will further compromise UA's position in HK, already made volatile by the recently approved Cathay/AA codeshare.

Now, it is Qantas' turn to figure out how to get the government to accept the deal for Air New Zealand.

Keep adding members Star. Meanwhile, the oneworld airlines continue to make the strategic moves necessary to build a really comprehensive and viable network.


User currently offlineN754pr From , joined Dec 1969, posts, RR:
Reply 7, posted (11 years 5 months 3 days 15 hours ago) and read 2954 times:

So, when do you think they will be back to China then?

User currently offlineAirways From Switzerland, joined Mar 2001, 880 posts, RR: 12
Reply 8, posted (11 years 5 months 3 days 15 hours ago) and read 2946 times:

I think they will not start flights to mainland until the situation with SARS get's better and traffic picks up again. I really hope it will get better soon, but I don't see Cathay start the China flights in late 2003. But I'm pretty sure they will launch these flights before the Chinese new year in early 2004.

I haven't heard a comment of Dragonair about the granted license. Was there something in the local HK news that I missed from my remote place?

Michael
http://airsider.net


User currently offlineN754pr From , joined Dec 1969, posts, RR:
Reply 9, posted (11 years 5 months 3 days 13 hours ago) and read 2903 times:

At this rate KA will not be a problem as they will not be flying. They are being badly hurt by the SARS thing and some say they only have as little as two months worth of cash....... add the fact that CX will now be hurting their main routes (Beijing & Shanghai) it does not look good.

User currently offlineCx flyboy From Hong Kong, joined Dec 1999, 6601 posts, RR: 55
Reply 10, posted (11 years 5 months 3 days 12 hours ago) and read 2883 times:

As I mentionned on a previous thread, we must remember this is merely the first step. There have been no slots assigned, and the Chinese authorities have not agreed to anything. In fact, they originally said they do not even recognise ALTA, and that the whole thing was meaningless to them. There's no point in ALTA approving it, if the Chinese aren't going to, and let's face it, what Chinese airline would want to compete directly with Cathay Pacific?

User currently offlineCarnoc From China, joined Oct 2001, 875 posts, RR: 0
Reply 11, posted (11 years 5 months 3 days 12 hours ago) and read 2867 times:

What Cx flyboy said is correct, Cathay Pacific's application still needs to be approved by Civil Aviation Administration of China (CAAC) and I think it may take up to a few months if Mainland carriers brought enough doubts and concerns over the matter. Meanwhile, I don't think Dragonair will be quiet, they will continue to fight back.

Regards.


User currently offlineAirways From Switzerland, joined Mar 2001, 880 posts, RR: 12
Reply 12, posted (11 years 5 months 3 days 11 hours ago) and read 2854 times:

Cx_flyboy & Carnoc: Thank's for the insight about the CAAC. I was also wondering whether the CAAC will be happy with the ALTA decission. At least, they are owning an important stake in Dragonair.

About KA's present situation, it doesn't really look good for them, as far as I can see. There has already been a lot of discussions about their situation, even before anyone ever heard of SARS.

Do you think the CAAC will let them go under? I think the Chinese administration is interested in a strong carrier in Hongkong. If they would loose KA, do you think they would launch a new HK based airline through one of the CAAC's airlines?

Michael
http://airsider.net


User currently offlineAirways From Switzerland, joined Mar 2001, 880 posts, RR: 12
Reply 13, posted (11 years 5 months 2 days 12 hours ago) and read 2782 times:

I have just seen the response from Dragonair, they're not happy...

"We are disappointed with the decision for several reasons," said Dragonair Chief Executive Officer Stanley Hui. "First, we believe it contravenes the Basic Law in respect of China's domestic routes. And second, the decision will result in uneconomic overlapping with the services provided by Dragonair on the three routes, leading to financial devastation for Dragonair. We made a very strong case as to the economic impact that granting the licences would have on Dragonair.

I didn't hear them complaining about basic laws when they got the Taiwan routes...

Michael
http://airsider.net


User currently offlineCXCPA From Hong Kong, joined May 2000, 387 posts, RR: 0
Reply 14, posted (11 years 5 months 2 days 11 hours ago) and read 2771 times:

Dragonair's comment is totally unlogic. ALTA also gave them the licence. If ALTA give licence to CX is illegal, then the dragonair's licence is also unvalid. So...

User currently offlineN503JB From Hong Kong, joined May 2000, 302 posts, RR: 2
Reply 15, posted (11 years 5 months 1 day 15 hours ago) and read 2724 times:

***I didn't hear them complaining about basic laws when they got the Taiwan routes...***

You didn't hear becasue CX will not be scare about KA poor In-Flight Service on HKG - TPE route and they want to be a part in China market.
KA scare CX, that's what I can say!

N503JB
JetBlue Airways



HKIA Ramp Spotters
User currently offlineBuckfifty From Canada, joined Oct 2001, 1316 posts, RR: 19
Reply 16, posted (11 years 5 months 1 day 11 hours ago) and read 2680 times:

Usually things get approved on the Hong Kong side much quicker than they do on the mainland. I was told that you have to multiply the ALTA ruling process by five, you'll probably get your answer as to how long it will be before the Chinese make their decision.

And in the current scenario, nothing is assured, especially with government carriers chomping at the bit for a slice of the pie.


User currently offlineHkg82 From Hong Kong, joined Apr 2002, 1297 posts, RR: 1
Reply 17, posted (11 years 5 months 1 day 9 hours ago) and read 2686 times:

Cx flyboy is absolutely right.

I don’t understand, why is there still dispute between Cathay & Dragonair over this matter? Didn’t Dragonair apply for rights from ATLA to offer services to other Asian cities, such as SIN, BKK, MNL, ICN, etc. & wasn’t their request granted? If KA commenced flights to the aforementioned destinations, then surely this would more than offset the loss in revenue KA would incur if CX resumed flights to the Mainland. This is a vice-versa scenario, as CX would reap in huge profits on their Mainland services to make up for the possible loss in earnings if KA started flights to above-mentioned key Asian destinations.

Hkg82.


User currently offlineLoejim From Hong Kong, joined Apr 2003, 14 posts, RR: 1
Reply 18, posted (11 years 4 months 4 weeks 1 day 18 hours ago) and read 2607 times:

I don't mean to bore you guys with crazy political stuff, but here's the reason why KA made such a claim on CX returning to PRC...

The rationale that ATLA is not a valid arena to discuss air services agreement between HKG & China is because the Basic Law states that HKG government only has the right to negotiate air services with "foreign countries" on international routes.

For "domestic routes" - i.e. between HKG & PRC - the decision on air services arrangements are signed through MOUs (Memorandum of Understanding) between HKG & CAAC. This is different from the ASAs (air services agreements) signed between HKG & other foreign countries. And the negotiation of MOUs had never went through ATLA even in the Colonial British years (Pre- 1997)... Thus KA's claim of ATLA contravenes the Basic Law is a valid on a political point of view...

For the international routes between HKG and other countries, ATLA is the venue to determine carrier designation from HKG. Therefore, CX CANNOT complain on the ground of Basic Law, even if KA has gotten the approval from ATLA.

And agree with previous messages that this is only the very first step (or actually no steps had been taken given that CX got the licence from a venue not recognized by CAAC) for CX. They still need to go through proper HKG government endorsements and negotiations with the CAAC. This could also involve surrendering CX's shareholding in Dragonair - which with Swire Pacific's holdings, constitutes a 35% holdings. So it's still going to be a very long road...


User currently offlineConcordeBoy From , joined Dec 1969, posts, RR:
Reply 19, posted (11 years 4 months 4 weeks 1 day 18 hours ago) and read 2600 times:

Loejim,

good points... but there seems to be something of a flaw in that logic: namely, Taiwan.

The dispute of whether or not Taiwan is "really China" is well known, yet (IINM) ATLA gave KA the clearance to operate there.

How could the CAAC not see this as an objectionable action... if CX to mainland is to be seen that way?


User currently offlineB-HXB From New Zealand, joined Jan 2001, 745 posts, RR: 0
Reply 20, posted (11 years 4 months 4 weeks 1 day 18 hours ago) and read 2595 times:

UH-HUH. So Dragonair can get licenses to fly all these routes and compete with CX, but when CX wants to get a license to compete against KA, KA suddenly finds an illogical rationale "we'll lose business" to stop them? I think the Atla ruling was spot on when it pointed out that KA seemed more concerned about their own bottom line than promoting HKG as a hub.

CX has a long way to fly before it even gets near starting up mainland China services, but fingers crossed!!

While we're on the subject of KA, is it true that they're being severely hit by this whole Sars thing? I don't want to start any rumours, but I believe I read somewhere that KA's load factor is quite low (even worse than CX) and that their cash reserves are nowhere near what CX have on hand. Can anyone confirm?


User currently offlineVr-hkg From United States of America, joined Oct 2001, 182 posts, RR: 0
Reply 21, posted (11 years 4 months 4 weeks 1 day 18 hours ago) and read 2591 times:

Yes, I have read the same, that KA are being hit significantly worse than CX by this.

User currently offlineLoejim From Hong Kong, joined Apr 2003, 14 posts, RR: 1
Reply 22, posted (11 years 4 months 4 weeks 1 day 17 hours ago) and read 2584 times:

Concorde Boy,

Tks for reminding that I mindlessly left the Taiwan issue un-explained...

On the Taiwan issue: HKG signs not ASAs with Taiwan, but Commercial Agreements (among carriers - i.e. CX, KA, CI, BR, AE and any carriers from either side). This is the policy that neither PRC or ROC government get involves in this sensitive matter of country vs renegade province or what not...

Therefore, CAAC has no jurisdiction on HKG negotiating air services with Taiwan, although China claims that Taiwan is part of China and HKG-Taiwan routes should be treated as domestic routes. It is both (PRC & ROC) governments' implicit understanding that this is off-limits area.

That is why the Taiwan issue is different from the China issue here... and this is strictly political!

As for B-HXB's comment on CX entering would give HKG more of an opportunity of becoming an international hub, I just want to express a few underlying points:

1. If CX enters PRC market, KA very likely will have to scale down and terminate some of its existing secondary Mainland cities (19 in total).

2. CX is entering into a market which is currently served by HKG carrier, and if this leads to case 1 scenario, HKG will actually have less direct flights with these secondary cities of Mainland. How can one justify that this serves HKG's hub role better?

3. CX also is already benefiting from the current arrangement with KA feeding onward traffic to CX, and it is already earning money even on the Shanghai-Hong Kong round trip sectors (thru shareholdings of KA).

********************************************************

As for KA's current situation, from my source, it has been "devastated" from SARS. But there is no cash flow problem as of yet...


User currently offlineLutfi From China, joined Sep 2000, 775 posts, RR: 0
Reply 23, posted (11 years 4 months 4 weeks 1 day 16 hours ago) and read 2571 times:

Loejim,

But you misunderstand function of ATLA. Well, so did Alan Hoo...

ATLA is just to say "HKG airline Y wants to fly to XXX, does any one object?" It then has a hearing if anyone objects, and decides if to give a license or not

It is then up to the HK government to negotiate the rights, if they don't already exist. It makes no difference whether int'l or domestic.

For example KA holds ATLA license to many destinations in China that they don't have traffic rights for yet, so if ATLA is unconstitional, so are KA licenses...

The judge talked about your underlying points. Go read the report, it is well wriiten and has many interesting facts. In brief

1. KA may reduce points. Judge view was that if the points aren't commercially viable, then it is KA's own commercial decision to lose money on them or not, and not an issue for ATLA or HK government. Besides, mainland airlines would continue to fly the routes

2. See (1)

3. The issue is about 6th freedom pax.

Again, I urge you to read the ATLA report at:

http://www.edlb.gov.hk/edb/eng/related/decision.doc








User currently offlineLoejim From Hong Kong, joined Apr 2003, 14 posts, RR: 1
Reply 24, posted (11 years 4 months 4 weeks 1 day 14 hours ago) and read 2542 times:

Lufti,

I fully do understand what ATLA's function is, and it has accomplished its role in granting that licence. On a political standpoint, this is something that needs to be sorted out between the 2 governments. Of course, this is also why by ATLA granting licences, CX does not automatically get the right to serve these ports. There is still the HKG government and CAAC approvals needed.

The point is, through out the hearing, CX's main argument was resuming service to the three main ports in China would promote HKG's role as an international hub.

However, if this function is accomplished at the expense of eliminating existing services between secondary China ports and Hong Kong, then this main support for CX resuming services is not justified.

On a side note, I would welcome if CX does operate all the other ports that KA operates... but I think CX would not do it on a financial point of view as well... so go figure, CX is only looking at the lucrative routes while KA is stuck with the real role of facilitating HKG as a hub? Someone please explain to me the fairness here...


25 ConcordeBoy : There is no fairness in there... but such is the nature of a truly open international market, something of which more and more will be expected of Asi
26 Loejim : Fairness may not be the best choice of words... Especially when the decision is a finanical one... But I just want to stress a point that as a person
27 Post contains images Hkg82 : Yes but as I stated in an earlier post in this thread, wasn’t Dragonair granted the license to offer services to key Asian destinations such as SIN,
28 Post contains links Airways : That's a very interesting discussion here, thanks for all the facts! I agree with Hkg82. If KA wants to compete against CX on the Asian routes, they s
29 ConcordeBoy : But I just want to stress a point that as a person from HKG, the rationale on improving HKG's position as a hub thru granting CX the licence makes abs
30 Loejim : Thanks for all of your valuable inputs... this is a great discussion! I guess this is tough luck for Dragonair as Cathay was the one who had always be
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