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Old May 22nd, 2006, 02:31 PM   #681
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Cathay to give its jets inflight health checks
2 May 2006
The Nation (Thailand)

Cathay Pacific Airways has announced that it will license a state-of-the-art inflight aircraft-monitoring system from Boeing to track the condition of its 43 twin-aisle jets.

Boeing's Airplane Health Management (AHM) will give Cathay Pacific a real-time tracking tool to identify potential problems to help establish a timely maintenance programme.

Cathay will use the system to track its fleet of existing and to-be-delivered 777s and 747-400s. It is designed to be integrated into existing maintenance and engineering systems.

During a flight, AHM gathers data about faults and relays that information in real time to ground personnel. Maintenance crews can then be ready with the necessary parts and tools to make repairs as soon as the aircraft lands.

The system can reduce the number and length of aircraft delays and convert many tasks from non-routine to scheduled maintenance.

"Cathay Pacific is an airline-industry bellwether due to its reputation for smart management and informed decision-making," said Lou Mancini, vice president and general manager of Boeing Commercial Aviation Services.

"For Cathay Pacific, one of the key benefits of AHM is the ability to

manage a large fleet of aircraft by the effective use of technology rather

than manpower," said Rob Wales, manager of Cathay Pacific's maintenance support.

"By using real-time fault-forwarding linked to Boeing and airline documentation and integrated into the airline's engineering and maintenance system, staff have a powerful knowledge base. This ultimately results in improved operational performance."

AHM is a key technology in Boeing's effort to e-enable the air transport system. Central to the effort is the idea that data, information and knowledge are shared across an entire enterprise to allow airlines to make the best decisions to operate their fleets at the highest levels of safety, security and efficiency.

The system is designed to integrate with other e-enabled products.

In addition, AHM supports long-term fleet-reliability programmes by helping airline's identify recurring faults and trends. Data collected from one airline can be used to guide repair decisions, based on history and fleet experience at another airline operating the same aircraft type.
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Old May 22nd, 2006, 02:32 PM   #682
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HK's Cathay Pacific To Offer 1,600 Crew Early Retirement
4 May 2006

HONG KONG, May 04, 2006 (DJCS via Comtex) -- Cathay Pacific, Hong Kong's leading carrier, said Friday it is offering early retirement to 1,600 cabin crew to offset surging fuel prices and operating costs that are eating heavily into profits.

Cabin crew with more than 15 years of experience - about 1,600 people - could opt to retire early and receive up to 17 months' salary on top of their standard retirement benefits, Cathay Pacific Airways Ltd. (0293.HK) spokeswoman Carolyn Leung said.

Cathay Pacific reported in March that its 2005 net profit fell 25% to HK$3.3 billion, down from HK$4.42 billion in 2004, as sharply higher jet fuel prices offset strong growth in passenger demand.

The carrier said during the year its fuel costs rose 67% to HK$15.59 billion, accounting for a third of its operating expenses.

A statement issued by Cathay Pacific said the carrier's first early retirement scheme was aimed at helping its "ongoing cost management efforts to remain competitive."

Experienced crew who choose to leave under the scheme will be replaced through recruiting new staff, the statement said.

Cathay Pacific employs about 11,000 Hong Kong-based staff, 6,800 of whom are cabin crew.
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Old May 24th, 2006, 01:43 AM   #683
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22 May 2006
Corporate Press Release
Cathay Pacific named Best Inflight Retailer for second straight year

Cathay Pacific Airways has – for the second consecutive year– been named the “Best Inflight Travel Retailer in Asia Pacific” by travel retail publisher Raven Fox.

The Raven Fox awards, decided in an industry-wide poll, acknowledge the quality of airline inflight sales products. Cathay Pacific carried off the “Best Inflight Travel Retailer in Asia Pacific” trophy in 2005, 2003, 2001 and 1998. The airline was this year also highly commended in the "Best Website Serving the Asia/Pacific Travelling Consumer" category at this year's awards ceremony held in Singapore.

Cathay Pacific has in recent years totally transformed its inflight shopping experience by offering a greater selection of goods – many of which are sold exclusively on Cathay Pacific flights. Shopping has become as much a part of the inflight entertainment experience as movies, music and food.

The airline took inflight shopping to a new high with the launch of “Discover The Shop” magazine, which goes beyond the traditional boundaries of a simple catalogue to include the kind of short features and an exclusive fashion shoot usually seen between the pages of glossy fashion and lifestyle magazines. From October last year, passengers have been able to pre-order goods on a special section the airline’s web site to collect and pay for on their flight.

Cathay Pacific currently offers 197 different items for duty free sale, including special 60th anniversary gifts - an IWC limited-edition Classic Pilot Chronograph watch, an Aigner "Andrea Palladio" lady’s pen with 60 diamonds and Tasaki pearl necklace with 60 Akoya pearls. This will exceed 200 in the next season, starting July. Items range from traditional cosmetics and liquors to exclusive jewellery items. Skincare, perfume, cosmetics, jewellery and watches currently account for almost two-thirds of the airline's inflight sales, and most active sales are on routes to and from Japan, Korea and Taiwan.

Innovate promotions, such as “Discover the Gold” earlier this year in which one in every 20 boxes of Goldkenn had five gram 999.9 purity gold bar have created a buzz among passengers and through the industry, helping the airline clinch the Raven Fox title.

Cathay Pacific Director Service Delivery Quince Chong said: "Cathay Pacific provides not only premium service but premium inflight sales products as well. Winning the Raven Fox award for the second straight year – and in our 60th anniversary year as well – reflects the way we select our inflight sales products, the alignment of the brand with CX's brand, the quality, our partnership with our suppliers and our overall commitment to our passengers. Our thanks go to every member of staff who helped make it happen."
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Old May 24th, 2006, 11:18 PM   #684
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Cathay to raise fuel surcharge in June
23 May 2006
South China Morning Post

Cathay Pacific will raise its fuel surcharge on all flights next month, aviation officials said.

Passengers will pay $109 dollars, up from $90, on short flights and $450, up from $370, on long flights.

"The new charge will last until July 31, when Cathay has to apply to either maintain the fare or increase it again," a spokeswoman for the Civil Aviation Department said.

"We are also in the process of looking at 13 other applications for airlines that wish to extend or revise their fuel surcharges."

Cathay Pacific said it regretted charging customers more, but higher oil prices required it.

"The surcharge increase has been prompted by the spiralling rise in jet fuel prices which hit a record high of US$90 a barrel in late April," Cathay said.

"Nevertheless, Cathay Pacific continues to absorb more than half of the fuel cost increases. Fuel surcharge increases have been able to only offset less than half of the fuel cost increases."

The airline also promised to introduce additional cost-saving measures, including using lighter containers and stripping planes of 200kg of paint.

Rival Dragonair also said yesterday it had plans to revise the $90 surcharge it levelled on passengers.

If the authorities approve its increase, the change will also take effect on June 1, but the airline would disclose details of the proposed revision.

Airline spokesman Kenrick Ko said he was not aware of the exact price change requested and the Civil Aviation Department usually permitted such applications.

The announcement comes as Dragonair chief executive Stanley Hui Hon-chung reported a record one-month high in the number of passengers that flew with Dragonair during the Easter and "golden week" holiday around Labour Day earlier this month.

"Large trade shows in Hong Kong and higher leisure travel {hellip} enabled us to break through the 480,000 passenger level for the first time in a single month." he said.
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Old May 26th, 2006, 02:09 AM   #685
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Headwinds buffet Cathay cargo plans
26 May 2006
South China Morning Post

Hong Kong's position as the gateway to China has propelled Cathay Pacific Airways into becoming one of the world's biggest carriers of air freight, the highest value - and highest margin - sector of the trade transport industry.

Like most of Asia's premier airlines, Cathay's cargo business has grown to account for more than 33 per cent of overall revenue and, with China set to be the world's factory for at least the next decade, the management has fashioned some very aggressive plans for the division.

A window into just how big those plans are opened this week when it emerged Cathay had reserved the final five slots on Boeing's B747-400F production line. It has only received one of six B474-400SFs it ordered for conversion at its sister facility in Xiamen and has six more options, the first of which must be exercised next month.

Of course slots and options are not firm orders, but if Cathay chooses to exercise all the possibilities, it is looking at 17 new wide-body freighters in the next decade.

Granted some of the aircraft in its present fleet are getting a little long in the tooth - four of its B747-200Fs are 26 years old and two others are 22 and 19 - but the net increase in capacity could be staggering.

So, like other top global cargo carriers, Cathay has big plans for its freight division, including opening the world's biggest general cargo terminal in 2009, the authorities permitting.

It has everything it needs to become one of the world's elite cargo airlines - location, aircraft, access to capital, reputation, vision - but, unlike its rivals, it lacks a single-user cargo terminal at its hub. In fact, Cathay says it is the only major scheduled cargo carrier that operates from a common-user facility at its home base.

This has become problematic for several reasons. First, its cargo-handling costs are the biggest controllable expenditure for Cathay Cargo, an annual outlay it would like greater control over.

The management says handling costs in Hong Kong are "roughly twice the system average" and three times those at comparable regional airports.

Costs aside, the airline believes a single-user facility would differentiate the types of service it can offer, relieve trucking congestion, increase productivity and reduce the cut-off times for delivery of outbound shipments.

Late cut-off times tend to endear a facility to the logistics community, not least to those who choose which airport the goods are sent through, the cargo owners, as they afford the kind of operational flexibility that has been the mainstay of the lucrative express industry. Its power to attract revenue to an airport should not be underestimated.

Hong Kong Air Cargo Terminals Ltd's three-hour cut-off time for pre-packed cargo is one of the reasons our status as the regional hub appears secure despite the best efforts of cross-border rivals in Guangdong.

In a perfect world, Cathay probably would have preferred to not assume the risk of building a facility capable of handling 4.5 million to five million tonnes. A successful bid in the anticipated tender process would probably result in a messy divorce from Hactl, which necessarily would have to include Cathay and parent Swire Pacific selling their combined 30 per cent stake.

But with its cargo business having grown too large to be handled by anyone else but Hactl, Cathay feels the terminal operator has lost the incentive to take care of its biggest customer.

So, for the past six months, the industry has been waiting for the Airport Authority to decide not what's best for Cathay, but what's best for Hong Kong. The authority says it has "no timetable" in which to make the decision on how or if the facility should be awarded.

"The time required depends on the complexity and scale of the projects," an official said.

For Cathay, time is definitely wasting. "No one wants Hong Kong's status as an air cargo hub to be eroded as it has been on the shipping side where, clearly, things didn't work out as well as they should have, probably because of vested interests," Cathay director and cargo supremo Ron Mathison said.
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Old May 28th, 2006, 01:06 AM   #686
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Old May 31st, 2006, 02:10 AM   #687
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RESEARCH ALERT-ABN AMRO cuts Cathay Pacific to "sell"

HONG KONG, May 26 (Reuters) - ABN AMRO cut its rating on Hong Kong flagship carrier Cathay Pacific Airways Ltd. to "sell" from "buy", on expectations the firm's earnings will drop because of rising fuel costs and expensive hedging. Difficulty in accessing the mainland Chinese market will also be a factor for Cathay, said ABN AMRO analyst Andrew Tan, who forcasts an earnings drop of 20 percent to HK$2.6 billion (US$333 million) for all of this year.

"The airline needs to move fast before other foreign carriers secure an increasingly higher share of a liberalising Chinese market," Tan said in a note dated May 25.

ABN AMRO, which expects Cathay's hedging gains to be "modest" this year, also lowered its target price on Cathay's stock to HK$11 from HK$16. Cathay Pacific's shares have lost 5.2 percent so far this year through Thursday's close, compared to a 5.5 percent gain in the benchmark Hang Seng Index <.HSI>. The stock was up 0.39 percent at HK$12.90 in morning trade on Friday. (US$1=HK$7.8)
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Old June 1st, 2006, 07:32 AM   #688
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31 May 2006
Corporate Press Release
Cathay Pacific To Launch New Freighter Service To Chennai

Cathay Pacific Airways will launch the first direct freighter service between Hong Kong and Chennai on Friday, connecting the world's two fastest growing economies of China and India.

The addition of this southeastern port city of Chennai, formerly Madras, further expands Cathay Pacific's world cargo network and strengthens Hong Kong's position as the world's busiest international air cargo hub and gateway to the Chinese Mainland.

The new twice-weekly freighter service, which operates via Mumbai (Bombay) opens a new market for the airline and offers broader national coverage beyond the existing cargo and passenger services to Delhi and Mumbai.

"Increasingly, Hong Kong's competitive proposition as a global cargo hub hinges on its ability to capture cargo transshipment business, the fastest growing segment in the air cargo market," said Cathay Pacific Director & General Manager Cargo Ron Mathison.

"Cathay Pacific's new service to Chennai will further enhance the transshipment potential between China and India, between India and the United States, through the Hong Kong hub," he said.

The service will operate every Tuesday and Friday using a Boeing 747-200F freighter. It will depart Hong Kong at 2.05pm, arriving in Mumbai at 5.25pm local time the same day before continuing to Chennai later that afternoon and heading back to Hong Kong at 10.15pm. It arrives in the early hours of the following morning in good time for onward connections to the US.
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Old June 1st, 2006, 10:40 PM   #689
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Cathay Pacific places orders for two additional 777-300ER aircraft

Cathay Pacific Airways today placed orders for two additional advanced wide-body Boeing 777-300ER aircraft, increasing its commitment to a total of 18 since the airline announced its biggest ever order for new aircraft in December last year.

Previously, the airline made commitments for 16 Boeing 777-300ER aircraft with purchase rights for 20 more. Two of these purchase rights have now been exercised. The additional two Boeing 777-300ER aircraft will be acquired through direct purchases from The Boeing Company.

All the Boeing 777-300ER aircraft will be powered by General Electric GE90-115B engines. The additional two Boeing 777-300ER aircraft will be delivered in January and September 2008, while the first Boeing 777-300ER aircraft is scheduled to enter service in September 2007.

Cathay Pacific Chief Executive Philip Chen said: “These additional aircraft orders reflect our determination to expand and grow. More aircraft will allow us to widen our services network and connectivity, further strengthen Cathay Pacific as a home carrier and Hong Kong’s position as a global hub and gateway to the Chinese Mainland. We are wholly confident in the long-term future of the airline and Hong Kong, and committed to the continued profitable growth of Cathay Pacific.”

Cathay Pacific’s fleet currently totals 97 aircraft. Its long-haul fleet comprises 23 Boeing 747-400, 15 Airbus A340-300 and 3 Airbus A340-600 aircraft. The regional fleet comprises 16 Boeing 777-200/300 and 26 Airbus A330-300 aircraft. The airline also operates 14 Boeing 747 freighters.

In addition to the 18 Boeing 777-300ER aircraft, the airline also has outstanding orders for two Boeing 747-400 aircraft, one Boeing 777-300 aircraft, six Airbus A330-300 aircraft and five 747-400 Boeing Converted Freighters. Cathay Pacific’s fleet will take delivery of its 100th aircraft this summer in the year of its 60th Anniversary.
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Old June 4th, 2006, 07:27 AM   #690
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SEATTLE, June 01, 2006 -- Boeing announced today that Cathay Pacific Airways has placed its second order for Boeing 777-300ERs, bringing the total commitment to 18 airplanes, 14 directly ordered from Boeing and four leases. Forty-four airlines worldwide have placed 849 firm orders for the 777s
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Old June 5th, 2006, 10:17 AM   #691
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國泰擬斥100億元全購港龍[13:30]
2006年6月5日



經過接近兩年的反覆研究商討,國泰航空(0293)全購港龍的構想,已經接近達成協議階段。國泰航空將宣布,以13億美元(101億港元),向中航興業(1110)及中信泰富(0267)全購港龍。

國泰航空(0293)、中國國際航空(0753)、中航興業(1110)、太古A(0019)及中信泰富(0267)今早停牌。

路透社引述消息人士透露,國泰將以現金加股權,向太古(0019)及中信泰富(0267)等公司,收購港龍的股權。有關收購如能成功,將令國泰成為亞洲最大的航空公司,並令國泰即時可發展國內航線。

國航、國泰航空、中航興業及中信泰富和太古五家上市公司較早時曾發表聲明稱,「確認現正就國泰航空與國航之間的營運合作以及理順國泰航空、國航與港龍航空的股權進行磋商。」而聲明亦證實中信泰富有可能減持國泰航空股權,但仍計劃繼續長期作為國泰航空的重要股東。

完成交易後,港龍可能成為國泰全資附屬公司。

目前國泰持有17.8%港龍股權,太古(0019)及中信泰富則分別持有8%及28.5%港龍權益,港龍的大股東中航興業則持有43%,國泰亦持有1成的國航股權。

而太古及中信泰富高層已同意,向國航發出國泰股份,以換取港龍43.29%權益。國泰與國航將因

此而成為互控。中信泰富出售港龍權益予國泰後,維持為國泰第二大股東的地位。

停牌前國泰報12.95元。國航報3.1元,中航興業報1.97元,太古報72.25元,中信泰富報23.75元。

港龍的企業價值約122億元,82.2%股權的企業價值約為100億元。

港龍擁有超過32二架飛機,內地網絡包括23個城市。而國泰於今年慶祝60周年紀念,機隊的飛機數目將達101架。

這宗交易若屬實,是雙贏局面,可以減低國泰與港龍兩家公司之間的競爭。國泰透過港龍,能夠在大陸航空市場取得更大的市場佔有率,加快在內地拓展步伐。而且國泰與港龍可以互相轉介乘客到對方的航空網絡。

中信泰富急需套現,此舉一來解決了其資金需要,並將體現中信泰富之航空業務的價值,有助收窄股價與每股資產淨值的折讓。中信泰富將可專注於大陸房地產和特種鋼鐵業務。

中航興業複雜的股份結構將得以簡化。

國泰航空與中國國航將因此而成為互控,關係亦進一步增強,可從更緊密合作中受益。
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Old June 8th, 2006, 02:34 AM   #692
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Cathay to double Air China holding
Hong Kong Standard Staff Reporter and Bloomberg
8 June 2006

Cathay Pacific Airways, Hong Kong's largest airline, plans to spend HK$4 billion to double its holding in Air China to 20 percent to strengthen the relationship between the two companies, according to reports.

Cathay, which at present holds 10 percent of Air China, the mainland's largest airline in terms of number of aircraft, will use cash and stock for the purchase, Bloomberg reported, citing people with knowledge of the deal.

At the same time, Air China will obtain 17.5 percent of Cathay, as The Standard exclusively reported Monday.

The share purchases are part of Cathay's efforts to simplify its ownership structure as it moves to take control of 17.8 percent-owned Dragon Airlines, which is part-held by Air China, according to sources.

Cathay will also buy Swire Pacific's 7.7 percent holding of Dragonair and CITIC Pacific's 28.5 percent stake for about HK$8.2 billion, Bloomberg said Wednesday, citing three people with direct knowledge of the deal.

Cathay will also buy the 43.29 percent stake in Dragonair held by China National Aviation Co, according to Standard sources.

Trading in shares of Cathay, Air China, Swire Pacific, CITIC Pacific, and China National Aviation, which is 66 percent owned by Air China, have been suspended since Monday.

Henry Fan Hung-ling, managing director of conglomerate CITIC Pacific, said Wednesday he hoped an announcement in respect of disclosed and connected transactions involving the company would be made Wednesday or today. The proposed buyout of Dragonair remained under negotiation earlier Wednesday, according to a source.

Fan said the buyout is awaiting Hong Kong regulatory approval.

Closer ties between Cathay and Air China may help the mainland-based airline gain valuable management expertise as competition increases in China, the world's second-largest aviation market.

"China is encouraging government- owned enterprises to explore more investment opportunities in the international market, and the closer ties relation between Cathay and Air China match with Government policy,'' said Guotai Junan Securities analyst Alan Lam.

The shareholding restructuring was welcomed by analysts.

The Dragonair buyout, "on the face of it ... is strategically great for Cathay,'' Credit Suisse said in a report. Deutsche Bank analyst Emilie Chau described the shake-up as "a win-win situation for all parties.''

Sellers CITIC Pacific and CNAC will benefit financially from the transactions while Cathay should be able to boost margins from facing less competition on its important Hong Kong- Taiwan route, which is also flown by Dragonair, according to a report from Deutsche Bank.

Cathay will also win immediate access to Dragonair's China routes, which would otherwise have taken a long time to build, the report said.

"Of the HK$10 billion to be paid for Dragonair, CITIC Pacific would receive around HK$3.2 billion'' for the sale of its Dragonair stake, the Credit Suisse report said. "This is in accord with [CITIC Pacific's] strategic plans to reduce aviation exposure to focus on funding expansion of its designated core activities.''

CNAC will receive HK$5.4 billion for its Dragonair holding and may be privatized after the sale as the airline contributes 50 percent of CNAC's earnings, said the Credit Suisse report.
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Old June 8th, 2006, 02:35 AM   #693
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The Dragon that was too hot to handle
Daniel Hilken
8 June 2006
Hong Kong Standard

Cathay Pacific largely has itself to blame for its long exclusion from the mainland and for the high price it is having to pay for its takeover of Dragonair.

In many ways, this deal was the outcome of the long-established airline's own early reluctance to enter the mainland, as well as its attempts to suppress the upstart back in the 1980s, successfully lobbying the colonial government to implement a policy of allowing just one Hong Kong carrier per route.

``We got a lot of opposition from Cathay,'' Stephen Miller, Dragonair's first CEO, told The Standard Wednesday.

As he recalled, he proposed the idea of the airline to a group of the territory's tycoons, led by KP Chao, simply because he felt there was room for competition.

At the same time, according to former Xinhua Hong Kong bureau director and Communist Party Central Committee member Xu Jiatun _ who fled to the United States after the 1989 Tiananmen crackdown _ former Communist Party chief Zhao Ziyang wanted a Chinese-invested airline in Hong Kong that would fly to the mainland.

``His idea was that this could be an enterprise started in Hong Kong but funded by Chinese companies, which brings in management experience from outside to stimulate and improve Chinese civil aviation,'' wrote the former envoy in his autobiography.

The result was the establishment of what was christened Hong Kong Dragon Airlines in May 1985 _ and led to a twisted series of deals that left the Swire Group-controlled Cathay with only a small toe in the mainland.

At present, Cathay is limited to servicing directly only Beijing and Xiamen, while Dragonair flies to 23 Chinese destinations from Hong Kong.

On Monday, The Standard exclusively reported that Cathay is about to propose taking full ownership of Dragonair, paying at least HK$10 billion.

From the start, Cathay fought vigorously to block Dragonair's flight-slot applications. After heated hearings before Hong Kong's Air Transport Licensing Authority, the government adopted a one route-one airline policy that lasted until early this decade.

It probably did not help Dragonair's case that Sir John Bembridge, Hong Kong's financial secretary at the time, was a former Cathay chairman.

``Our arrival on the scene was not hailed very enthusiastically by the then Hong Kong government,'' said Miller, who is now chief executive officer of fledgling Oasis Hong Kong Airlines, a budget carrier.

Concentrating on a boom in travel elsewhere in the 80s, Cathay left the undeveloped China market to Dragonair, as it later became known. Forced into accepting lesser routes, it focused on the mainland.

By 1986, Hong Kong's second airline was serving six cities in the mainland on a regular charter basis. ``Cathay quite soon realized that Dragonair wasn't going to go away,'' said Miller. ``Hong Kong's biggest tycoons had invested in the airline.''

Its response was to buy into Dragonair in 1990 in a deal that gave Beijing- backed CITIC Pacific, the Swire Group and its subsidiary Cathay a combined 89 percent stake in the junior carrier. Management was ceded to Cathay.

At the time, Cathay had flights to Beijing and Shanghai and, under the government's restrictive one-airline policy, the main carrier conceded its mainland slots to Dragonair.

``In the short term, that was a very good solution,'' said Miller. ``Dragonair certainly was struggling at that time.``

But it was a short-lived victory for Cathay. In 1996, the airline ceded most of its ownership of Dragonair in a compromise over China's concerns about the British ownership of both the then colony's flag carriers.

In 1996, China National Aviation Corporation (Group) _ controlled by the mainland's aviation regulator _ bought a 35.86 percent interest in Dragonair, becoming its largest shareholder.

CITIC Pacific retained 28.50 percent, with Swire and Cathay Pacific together retaining just 25.50 percent.
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Old June 8th, 2006, 10:34 PM   #694
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It makes sense.

Is it Cathay that decided not to enter the mainland market in the first place? I thought it was the other way around!
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Old June 9th, 2006, 03:17 AM   #695
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Cathay to Buy Control of Dragonair for $1.58 Billion
http://quote.bloomberg.com/apps/news...a4g&refer=home

June 9 (Bloomberg) -- Cathay Pacific Airways Ltd., Asia's fifth-biggest carrier, will pay $1.58 billion to buy Hong Kong Dragon Airlines Ltd. and double its stake in Air China Ltd., adding 21 routes in the world's second-largest aviation market.

Cathay will buy the 82 percent stake it doesn't own in Dragonair for HK$8.22 billion ($1.1 billion) in cash and stock and pay HK$4.07 billion to increase its Air China stake to 20 percent, the airlines said in a statement today. Air China will pay HK$5.39 billion for 10.2 percent of Hong Kong-based Cathay.

Dragonair's routes in China will give Cathay access to cities including Shanghai and Tianjin, making it the dominant foreign-controlled airline in China. A stake in Cathay, Asia's second-most-profitable carrier, may help Air China compete with domestic rivals including China Southern Airlines Co.

``Having control of Dragonair will be positive for Cathay,'' Mona Chung, who holds Asian airline stocks in the $1 billion she helps manage at Daiwa Asset Management Ltd. in Hong Kong, said before the deal was announced. ``Dragonair now dominates'' flights from Hong Kong to China, she said.

Air China, the nation's largest international airline, will also set up a cargo venture with Cathay in Shanghai to increase cooperation, the companies said.

Cathay, which resumed flights to China in 2003 after a 13- year absence, has routes to only Beijing and the southeastern city of Xiamen. It also flies cargo to Shanghai.


Shanghai Jewel

Dragonair and China Eastern Airlines Corp. are the only carriers that fly passengers between Hong Kong and Shanghai, China's commercial center. The city is Hong Kong's busiest air route after Taipei.

Air China, based in Beijing, is facing more competition as China Southern sets up a hub in the Chinese capital. British Airways Plc is among international carriers that are adding flights to China as the country opens up its aviation market.

Global airlines are seeking to expand in China, where the World Tourism Organization forecasts 100 million people will travel abroad each year by 2020, up from about 20.2 million in 2003.


Shareholding Structure

Air China currently holds 69 percent of China National Aviation Co., which is Dragonair's biggest shareholder with a 43 percent stake. Cathay will give China National Aviation shares and cash for the stake, giving the Chinese company a 7.3 percent stake in Cathay.

Cathay will issue new stock to Swire Pacific Ltd., its biggest shareholder, for its 7.7 percent stake in Dragonair.

Citic Pacific Ltd. will sell its entire 28.5 percent stake in Dragonair to Cathay. Air China will then buy Cathay shares from Swire and Citic, the statement said.

Swire will remain the largest shareholder of Cathay with a 40 percent stake, followed by Hong Kong-based Citic Pacific with 17.5 percent.

ABN Amro Holding NV advised Cathay on the transaction and Merrill Lynch & Co. worked with Air China.

Trading in shares of Cathay, Air China, China National Aviation, Swire Pacific and Citic Pacific was suspended on June 5 after the Standard newspaper reported Cathay might pay at least HK$10 billion to acquire Dragonair.
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Old June 9th, 2006, 03:22 AM   #696
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Cathay seals US$1.05 billion buyout of Dragonair
http://today.reuters.com/business/ne...&imageid=&cap=

HONG KONG, June 9 (Reuters) - Hong Kong's Cathay Pacific Airways Ltd. said on Friday it will pay HK$8.22 billion ($1.05 billion) in cash and shares to take over rival Hong Kong Dragon Airlines Ltd. in a long-expected deal that expands its access to the fast-growing mainland China aviation market.

As part of the deal, Cathay will also pay HK$4.07 billion to double its stake in Beijing-controlled Air China Ltd. (0753.HK: Quote, Profile, Research) from 10 percent to 20 percent.

In turn, Air China will pay HK$5.39 billion for a 10.16 percent stake in Cathay, the companies said.

Air China controls China National Aviation Co. Ltd. (CNAC) (1110.HK: Quote, Profile, Research), which is the largest shareholder in unlisted Dragonair. Cathay already held a 17.8 percent stake in Dragonair.
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Old June 9th, 2006, 04:40 AM   #697
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More update: analysts suggested that Cathay may get 5th freedom rights from China, reported by HKStandard....
http://www.thestandard.com.hk/news_d...390&con_type=1

The AP reports thus: "Cathay said that Dragonair will keep its own brand for six years as part of the deal."
http://www.chron.com/disp/story.mpl/...s/3953115.html
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Old June 9th, 2006, 11:53 AM   #698
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Official Cathay Pacific press release:
http://www.cathaypacific.com/intl/ab...141126,00.html
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Old June 10th, 2006, 08:50 AM   #699
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slightly overdue, but great news overall.

a welcome pick-up by Cathay, securing feet arms and hands into its soon-to-be domestic market, and even retaining valued HK-positioning~~

frankly, a win-win for HK as it continues its ascendancy within the China story...
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Old June 11th, 2006, 05:53 AM   #700
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Cathay Pacific bought Dragon Air (HK)

it's a done deal now, Cathay Pacific has gained a controlling share in Dragon Air to gain acccess to mainland market.

meanwhile Air China (CA) who owns the majority share of Dragon Air will become a shareholder of cathay.

more details will follow.

http://news.bbc.co.uk/2/hi/business/5047344.stm
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