HKG | Hong Kong International Airport

[Monkey]

Originally Posted by hkskyline

Despite the HSR link between Kowloon and Guangzhou, there are still 5 flights a day between the two cities. I guess it's quite clear now that air traffic on this sector will not overshadow HK-Taipei any time soon!

I'm not talking about the current service. The current service is not HSR. But isn't there a plan to upgrade this line to 300km/h running speeds in future? That would leave little room for airlines.

[hkskyline]

Originally Posted by Monkey

I'm not talking about the current service. The current service is not HSR. But isn't there a plan to upgrade this line to 300km/h running speeds in future? That would leave little room for airlines.

For a journey time of 1hr40min, the average speed will need to be over 100 km/h about to cover the 175 km distance. Add the intermediate stops and the average speed will even be higher. It is indeed a high speed railway. There is a plan to build a line for an even faster train with the Hong Kong terminus at West Kowloon, but for business passengers, it's far easier to transit at the airport and fly the remaining distance than to head out to the city to catch a train.

[hkskyline]

Hong Kong Express Takes Delivery of Fourth Aircraft
Corporate Press Release

Hong Kong, May 28, 2006

Hong Kong Express Airways has today taken delivery of a new aircraft in preparation for its forthcoming summer route launches. The Embraer 170 passenger aircraft is the fourth of its type in the airline’s fleet and the final aircraft to be delivered from an initial order placed last year.

Featuring the same 76-seat cabin as the airline’s existing aircraft, the new Embraer 170 aircraft offers an uncompromising 32-inch seat pitch. And thanks to its 2 + 2 configuration offers greater personal space with all seats being either window or aisle.

Commenting on the delivery, Hong Kong Express Airways General Manager Sales, Simon Sin said, “As well as enabling us to open connections between Hong Kong and new cities in Mainland China and beyond, the arrival of our fourth aircraft reflects our commitment to expansion. Our fleet to date has proven efficient in allowing us to pursue market opportunities and with today’s arrival we are well placed to realise our strategic growth targets.”

Starting on 2nd June, Hong Kong Express Airways in conjunction with Mandarin Airlines will launch daily charter services between Hong Kong to Taichung in Taiwan, followed by the commencement of direct scheduled services to Chiang Mai on 22nd June. Adding to its network of destinations in Mainland China, flights to Chongqing - Hong Kong Express Airways’ fourth route into China, will be introduced later this summer.

[hkskyline]

Heliport extension plans break up Ho's monopoly
Project seen more likely to prepare for lucrative services to Pearl River delta
23 May 2006
South China Morning Post

Casino tycoon Stanley Ho Hung-sun's monopoly of commuter helicopter services between Hong Kong and Macau will be broken by plans to extend the heliport at the Macau Ferry Terminal in Sheung Wan.

The Hong Kong government would open a tender next month for the extension work, which was estimated to cost about $70 million and to be completed by 2008, sources said.

The sources said a number of Mr Ho's rival casino operators in the former Portuguese enclave were among the more than a dozen interested parties that hade made inquiries with the Civil Aviation Authority of Macau about setting up cross-border heli-services.

However, the spokesmen for Wynn Resort and Galaxy said the firms had no intention at the moment while a spokesperson at the Sands casino declined to comment.

The Macau Ferry Terminal has the only heliport in the city centre that is equipped with customs and immigration to cater for cross-border commuter services, now monopolised by Mr Ho's HeliExpress.

"Such a service can survive commercially only with casino subsidies. That is why there is no competitor," an industry source said.

In fact, the number of helicopter passenger trips between Hong Kong and Macau declined to 93,968 last year from an average of about 100,000 a year in the previous four years, the source said. "The traffic was flat, partly due to the bad weather and partly due to the cost of tickets," the source said.

HeliExpress charges $1,800 per trip, including $200 departure tax and other fees. However, this did not leave much room for making a profit, the source added.

This is why the heliport extension plan is less likely to be geared for increasing competition in the Hong Kong-Macau services than preparing for the more lucrative services between Hong Kong and the Pearl River delta once the mainland gives the green light.

Low-level flying into the mainland - under 3,000 metres - is controlled by the military and not open to civil aviation at the moment. However, negotiations are continuing through the Hong Kong Guangdong Co-operation Co-ordination Unit.

The Macau Ferry Terminal extension is a blow to plans put forward by Hong Kong Aviation Group, run by Michael Kadoorie, to create another cross-border heliport with customs and immigration services next to the Hong Kong Convention and Exhibition Centre in Wan Chai.

[hkskyline]

30/05/2006
AHK fleet grows to seven with latest arrival
Corporate Press Release





Air Hong Kong now has seven A300-600F freighters in our growing fleet. The latest delivery, registration B-LDG, arrived in Hong Kong on Thursday, 25 May 2006 in the distinctive AHK white-and-yellow livery.

This newest addition to the fleet is planned to replace the aircraft, wetleased from Air Atlanta International, that currently operates on the HKG/BKK/PEN vv route from 31 May 2006.

B-LDG has already operated to Singapore and will be rotated throughout the AHK network, which consists of routes to Narita and Kansai in Japan, Taipei, Incheon in Seoul, Singapore, Bangkok/Penang and Shanghai (wet lease operation for CX).

Our 8th new aircraft, registration B-LDH, is scheduled for delivery on 22 June 2006, arriving Hong Kong the following day.

[hkskyline]

港龍機14人驚哭索賠
如坐過山車 兩度折返

【記者何家茵報道】本港昨日的海、陸、空交通也受惡劣天氣影響，其中航空交通最為混亂，共有93班抵港及離港航機受延誤，而往來屯門至大澳的渡輪亦停航六小時，不少道路也因水浸而要改道。另外，港龍一班往桂林的航機亦因天氣關係兩度折返本港，兩個旅行團受影響，一批旅客拒絕再登機要求退團。
海陸空混亂 93班機延誤

機場管理局發言人指出，暴雨令本港航空交通受影響，昨有21班抵港航機及72班離港航機受延誤，受影響乘客平均滯留機場30分鐘或以上。至於渡輪服務方面，富裕小輪往來屯門至大澳並經東涌及沙螺灣的航班，因天氣惡劣，昨日中午12時停航，至傍晚6時15分才恢復正常服務，共約停航逾六小時。此外，由於昨日多處水浸，故要實施改道措施。

另外，港龍航空一班原定前晚7時10分飛往桂林的KA700航機，由於當地天氣亦惡劣，兩度被迫折返本港，延至昨日下午3時才成功起飛，傍晚近6 時抵達桂林。而該班航機有新華及康泰兩個桂林四至五天的旅行團，其中新華團的19個團友當中，有14人一度受驚大哭，指飛機突然急速下墜及上升，「心都跌埋出來」，故昨在本港機場等候期間，不肯再上機並要求退團。
兩團受影響 有團友動粗

新華旅行社副總經理謝日中說，已承諾向有關團友退款，但機票費用有待航空公司決定是否退回，期間有團友不滿並向領隊動粗，旅行社會保留追究權利。至於康泰旅行社的19人桂林團，則只有一人退出，旅行社向所有團友退回相當於一晚酒店住宿的100元賠償。港龍發言人則指已為154名乘客安排酒店住宿及餐膳，並向受影響乘客致歉，又強調乘客及機組人員安全是首要考慮問題。另一方面，蔬菜統營處總經理黎國仁表示，由於華南地區近期天氣惡劣影響蔬菜供應，故昨日菜價普遍貴四至六成。

[Kaitak747]

廉航攻港勢爆減價戰
03/06/2006



廉 價 航 空 公 司 熱 潮 即 將 席 捲 香 港 ， 繼 東 南 亞 大 批 廉 航 湧 現 之 後 ， 一 家 本 地 廉 航 預 計 於 今 年 第 三 季 ， 在 香 港 提 供 服 務 ， 以 標 榜 歐 洲 長 線 航 班 ， 期 望 挑 戰 傳 統 航 空 公 司 的 地 位 。 另 一 邊 廂 ， 剛 輸 掉 全 球 最 佳 機 場 名 稱 的 香 港 國 際 機 場 ， 為 加 強 競 爭 力 ， 下 半 年 會 推 出 平 價 停 機 位 ， 供 須 不 停 續 航 的 短 途 廉 航 使 用 。 有 航 空 專 家 估 計 ， 到 時 傳 統 航 空 公 司 將 無 可 避 免 地 調 低 票 價 ， 最 終 得 益 的 會 是 消 費 者 。

廉 價 航 空 推 出 的 超 平 機 票 ， 曾 經 成 為 城 中 熱 門 話 題 ， ○ 四 年 底 一 家 新 加 坡 廉 價 航 空 公 司 曾 進 軍 香 港 ， 為 在 香 港 出 發 的 乘 客 ， 提 供 二 百 多 港 元 來 回 香 港 至 新 加 坡 的 機 位 ， 帶 來 一 陣 震 撼 。

今 年 下 半 年 廉 航 將 在 香 港 再 掀 戰 幔 ， 以 本 地 投 資 者 為 主 的 甘 泉 航 空 ， 將 於 九 月 底 至 十 月 初 ， 開 辦 香 港 至 倫 敦 的 航 班 ， 為 搶 佔 市 場 ， 公 司 會 把 部 分 單 程 機 票 「 劈 價 」 至 一 千 元 起 ， 而 中 長 期 的 策 略 ， 就 希 望 把 票 價 維 持 在 傳 統 航 空 公 司 平 均 價 的 一 半 ， 「 我 們 不 是 搶 客 ， 是 發 掘 以 往 因 機 票 太 貴 而 未 有 出 門 的 『 潛 在 旅 客 』 。 」 公 司 主 席 李 卓 民 牧 師 說 。

長 程 賺 錢 補 短 程 虧 損
李 卓 民 牧 師 認 為 ， 傳 統 航 空 公 司 一 直 依 賴 長 程 航 線 賺 取 利 潤 ， 補 貼 短 程 航 班 的 虧 損 ， 但 他 認 為 這 種 經 營 未 必 有 效 率 、 乘 客 有 時 需 轉 機 才 可 前 往 遠 程 的 目 的 地 。

「 我 們 只 做 點 對 點 長 線 航 班 ， 便 沒 有 這 個 包 袱 。 」 李 說 ， 長 線 飛 機 在 空 中 時 間 較 長 ， 維 修 成 本 比 短 線 廉 航 低 ， 令 他 們 有 更 大 的 空 間 去 調 低 票 價 ， 因 而 相 信 長 線 廉 航 「 有 得 做 」 。 李 承 認 航 空 公 司 最 大 的 不 明 朗 因 素 ， 依 然 是 燃 油 價 格 和 禽 流 感 問 題 ， 但 他 認 為 以 他 們 的 經 營 模 式 ， 問 題 不 大 ， 「 即 使 油 價 造 成 票 價 壓 力 ， 我 們 仍 會 比 大 公 司 便 宜 。 」 李 有 信 心 地 說 。

李 卓 民 稱 未 來 三 至 五 年 ， 機 隊 會 由 現 時 的 兩 架 波 音 七 四 七 客 機 ， 增 至 二 十 五 架 ， 到 時 可 以 聘 用 二 千 五 百 名 員 工 ， 到 時 除 了 機 長 外 ， 大 部 分 職 位 都 會 在 香 港 招 聘 。

甘 泉 是 少 數 經 營 長 線 航 班 廉 價 航 空 ， 事 實 上 目 前 世 界 各 地 的 廉 航 ， 都 以 經 營 航 程 在 五 小 時 以 內 的 短 程 班 為 主 ， 貫 徹 「 航 程 短 ， 可 以 做 多 幾 轉 」 的 經 營 哲 學 。 環 顧 東 南 亞 不 少 機 場 ， 面 對 愈 來 愈 多 的 廉 航 航 線 ， 早 已 在 機 場 開 設 專 為 廉 航 而 設 的 停 機 位 ， 以 爭 取 這 個 市 場 。 剛 擊 敗 香 港 成 為 全 球 最 佳 機 場 的 新 加 坡 樟 宜 機 場 ， 亦 已 於 三 月 底 建 成 一 個 廉 航 航 廈 ， 使 用 這 航 廈 的 旅 客 ， 只 需 要 支 付 較 便 宜 的 機 場 稅 和 其 他 費 用 。

平 價 泊 位 須 巴 士 接 駁
香 港 方 面 亦 將 於 今 年 下 半 年 ， 推 出 收 費 較 低 的 停 機 坪 停 泊 位 。 機 場 管 理 局 發 言 人 表 示 ， 這 些 停 機 位 由 於 沒 有 直 接 連 接 客 運 大 樓 的 通 道 ， 乘 客 須 乘 接 駁 巴 士 前 往 ， 每 機 位 每 十 五 分 鐘 收 一 百 二 十 五 元 的 費 用 ， 較 一 般 連 接 航 廈 的 機 位 便 宜 三 十 一 元 。 發 言 人 強 調 ， 這 類 新 泊 位 ， 任 何 航 空 公 司 都 可 租 用 ， 他 解 釋 由 於 這 類 泊 位 接 近 跑 道 ， 飛 機 可 較 快 地 進 出 跑 道 ， 一 般 來 說 較 為 適 合 快 速 續 飛 的 航 班 。

民 航 處 前 處 長 樂 鞏 南 認 為 ， 面 對 廉 航 的 挑 戰 ， 一 場 「 鬥 錢 多 」 的 減 價 戰 在 所 難 免 。 他 指 出 甘 泉 開 航 後 ， 一 直 以 香 港 為 基 地 的 國 泰 航 空 ， 也 會 開 辦 廉 航 航 班 ， 其 他 航 空 公 司 也 必 會 減 價 應 戰 。

樂 認 為 傳 統 航 空 未 必 一 定 捱 打 ， 因 還 有 第 六 航 權 的 優 勢 ﹙ 即 在 外 地 將 乘 客 帶 到 香 港 轉 機 ﹚ ， 加 上 單 從 香 港 到 英 國 的 旅 客 未 必 像 估 計 中 多 ， 故 廉 航 大 戰 鹿 死 誰 手 仍 是 未 知 之 數 。

[hkskyline]

HK, Mainland China and Macao sign arrangement on aircraft maintenance organisations
Friday, June 2, 2006
Government Press Release

The Director-General of Civil Aviation, Mr Norman Lo, signed a cooperation arrangement on mutual acceptance of approval of aircraft maintenance organisations between the General Administration of Civil Aviation of China (CAAC), Macao Civil Aviation Authority (AACM) and Hong Kong Civil Aviation Department (CAD) in Beijing today (June 2).

This cooperation arrangement is an expansion of a previous one signed in May 2002 (that covers only aircraft component maintenance) and the new arrangement includes entire aircraft maintenance.

The cooperation arrangement allows the maintenance organisations in Hong Kong, once recognised under the arrangement, to maintain aircraft registered in Mainland China and Macao without seeking additional approval from the CAAC and AACM respectively. Likewise, maintenance organisations in Mainland China and Macao may maintain aircraft registered in Hong Kong without additional approval from the CAD. The airline industry will also benefit from the arrangement as they can have more choices on their maintenance contractors. Through this arrangement, the reduction in duplication of approval and oversight activities maximises the utilisation of resources of both the regulators and the industry.

The CAD has entered into similar arrangements with Singapore and Canada and is in active discussions with the regulators in other countries to establish similar arrangements.

[hkskyline]

Cathay close to $10b Dragonair buyout
Hong Kong Standard
Monday, June 05, 2006

Cathay Pacific is expected to buy out its 17.8 percent-owned subsidiary Dragon Airlines for at least HK$10 billion to establish a firmer foothold in the fast- growing mainland aviation market, sources said.

Cathay is understood to be in advanced stages of the discussions, first started in 2004, with Dragonair parent China National Aviation Company to simplify its shareholding in the mainland-owned carrier, a senior source close to the talks told The Standard.

The long-contemplated move may also involve revamping the shareholding structures of major players in the regional aviation sector, including Cathay Pacific, CNAC, Air China and CITIC Pacific.

Cathay Pacific is expected to buy out the stakes held in Dragonair by Swire Pacific, CITIC Pacific and CNAC through a combination of cash and share issues.

A Citigroup report out last month estimated Dragonair to be worth about HK$12.2 billion. Cathay would have to pay HK$3.2 billion for CITIC Pacific's entire 28.5 percent stake in Dragonair, the report said.

A source confirmed that Air China was likely to acquire shares in Cathay Pacific, becoming its third-largest shareholder after Swire Pacific and CITIC Pacific.

Cathay Pacific already holds a 10 percent stake in Air China and the cross shareholding is expected to strengthen ties between the two carriers, helping the mainland-based airline to gain valuable management expertise for competing more effectively in the international market.

CITIC Pacific, whic
h currently owns 25.42 percent of Cathay Pacific, is likely to cut its stake in the carrier.

Earlier this year, the conglomerate said it wanted to trim shareholdings in its non-core businesses and focus on the property and resources sectors.

A recent report issued by CITIC Capital, a unit of the CITIC Group, said any alliance between Cathay Pacific, Air China and Dragonair could be a compelling force in the global aviation market as it would create vast synergies in resource utilization and routes.

The three carriers could form a "triangular cooperative platform" implementing a cohesive domestic, regional and international strategy, the report said. Dragonair flies to 23 destinations in the mainland from Hong Kong.

Cathay Pacific, despite years of trying, has so far managed to secure routes only to Beijing and Xiamen.

The lucrative Hong Kong-Shanghai route has eluded the carrier and, even on the Hong Kong-Beijing route, Dragonair accounts for 88 percent of the flights.

In the past, the tussle for mainland routes between Cathay Pacific and Dragonair turned bitter, with one or both sides threatening arbitration.

Total ownership of Dragonair would make Cathay the top foreign carrier operating in the mainland, far ahead of Japan Airlines, Singapore Airlines and Korean Air, which only have limited access to Chinese skies. "Clearly, Cathay would benefit from controlling Dragonair as it could cut competition and allow Cathay to fully utilize Dragonair as a feeder airline," HSBC's regional transport analyst Mark Webb said in a recent report.

Dragonair's net profits accounted for 52 percent of CNAC's total income last year.

The carrier recorded disappointing earnings for 2005, with net profits down 59 percent to HK$270 million - far below market expectations.

This, in turn, dragged CNAC's net profits down 38 percent to HK$225 million.

Asked how the government would respond to a possible 100 percent buyout of Dragonair by Cathay Pacific, Deputy Secretary for Economic Development and Labour Wilson Fung told The Standard Sunday he had not received any notification from related companies on the matter.

Shares of Air China, Cathay Pacific, Citic Pacific and CNAC rose Friday.

Air China shares jumped 5 percent to HK$3.10, while Cathay Pacific rose 1.57 percent to HK$12.95, and CNAC gained 1.55 percent to HK$1.97.

[Monkey]

Originally Posted by hkskyline

For a journey time of 1hr40min, the average speed will need to be over 100 km/h about to cover the 175 km distance. Add the intermediate stops and the average speed will even be higher. It is indeed a high speed railway. There is a plan to build a line for an even faster train with the Hong Kong terminus at West Kowloon, but for business passengers, it's far easier to transit at the airport and fly the remaining distance than to head out to the city to catch a train.

I take your point about those arriving at Hong Kong airport preferring a short onward flight to Guangzhou rather than travelling into Kowloon and changing to the KCR.... but there is no way that the current Hong Kong-Guangzhou rail service can be considered HSR. It's just not fast enough.

[Monkey]

If this Cathay/Dragonair deal goes through, will Dragonair become part of the Oneworld alliance? I hope so....

[samsonyuen]

It'd be good for CX to buy Dragonair, so it has access to the mainland Chinese market that it should've already had.

[hkskyline]

Cathay Buyout Of Dragonair May Hurt China Carriers
By Jeffrey Ng
6 June 2006

HONG KONG (Dow Jones)--A buyout of Hong Kong Dragon Airlines Ltd. by Cathay Pacific Airways Ltd. (0293.HK) may intensify competition for China's two major regional carriers and push them to seek international partners, analysts said Tuesday.

China Southern Airlines Co. (ZNH) and China Eastern Airlines Ltd. (CEA), already struggling to pull out of steep losses caused by high fuel prices, would likely face downward pricing pressure on their profitable flights between mainland China and Hong Kong if Cathay Pacific, Hong Kong's biggest airline, is able to buy Dragonair, which is smaller but has a strong China focus.

Cathay Pacific owns 17.8% of Dragonair but is in talks to take full control in a deal that could be valued at more than HK$8 billion, people familiar with the situation said.

A buyout is expected to be announced by Thursday, one of the people said Tuesday.

The deal would give Cathay Pacific much-needed access to more cities in mainland China, which accounts for most of Dragonair's 31 destinations.

Cathay Pacific has only two passenger destinations in the mainland, Beijing and Xiamen, after unsuccessfully lobbying for years to get onto the lucrative Hong Kong-Shanghai route.

Just as important, analysts said, are the synergies that could be achieved if Cathay Pacific and Dragonair find ways to pool resources.

"The primary benefit that these companies can derive is cost reduction," said Damien Horth, a transport analyst at UBS AG (UBS).

That could give the carriers scope to cut fares, making the buyout "a challenge for the airlines in the Greater China region," said Horth.

Shanghai-based China Eastern mainly competes with Dragonair on the Shanghai-Hong Kong route, while Guangzhou-based China Southern competes mainly on flights between Hong Kong and Beijing, Xiamen, Guilin and Wuhan.

The direct effect from fare competition would hit China Eastern hardest, where Hong Kong flights accounted for more than 9% of its 2005 passenger traffic, as measured by revenue passenger kilometers.

By comparison, Hong Kong services accounted for just 2.5% of China Southern's total passenger traffic last year, according to company figures.

The traffic numbers don't tell the whole story. Tickets on Hong Kong flights are usually more expensive than government-controlled fares on Chinese domestic flights.

"The only way for the two airlines to survive on these routes is to cut their prices as well as to boost volume," said Alan Lam, an analyst at Guotai Junan Securities Ltd.

Analysts said increased price competition would hurt the Chinese carriers more than Cathay Pacific or Dragonair, because the state-controlled Chinese airlines are less efficient and experienced.

Both China Eastern and China Southern reported heavy net losses in 2005, reversing their profitability the previous year. China Eastern posted a net loss of CNY467.3 million, while China Southern's loss for the year was CNY1.85 billion.

Both airlines attributed their losses to high fuel prices and costs associated with integrating their expanding fleets. Though Cathay Pacific's 2005 net profit fell 25%, it remained well in the black, with earnings of HK$3.30 billion.

Merrill Lynch & Co. (MER) analyst Paul Dewberry downgraded his expectations for China Eastern and China Southern last week. He forecast both would continue to lose money in 2006 and 2007 due to high fuel prices and severe price competition.

Analysts said better connections and cheaper fares from a merged Cathay Pacific-Dragonair network would draw many travelers from outside China and Hong Kong away from China Eastern and China Southern, which focus more on domestic flights.

For example, many passengers who take Cathay Pacific from cities in the U.S., Europe or elsewhere in the Asia-Pacific region now connect through Hong Kong to mainland China on China Eastern or China Southern. Cathay Pacific in control of Dragonair would find ways to make it more attractive for such passengers to take Dragonair on their flight segments between Hong Kong and mainland China.

"That means there's greater urgency for someone like China Eastern and China Southern to find a bigger partner for expanding internationally," said Horth.

He said the two airlines could try to woo partners by offering international carriers feeder services from their hubs in Guangzhou and Shanghai.

China Eastern's chairman, Li Fenghua, said in April his company was aiming to sell a stake of at least 20% to a strategic investor to raise funds and improve its management expertise.

Another China Eastern executive named Singapore Airlines Ltd. (S55.SG) as one of those in talks with the airline.

A China Eastern spokesman declined to comment, while China Southern couldn't immediately be reached for comment.

[hkskyline]

India keen to secure HK air deal
7 June 2006
South China Morning Post

India's top aviation official has urged air service negotiators from India and Hong Kong to return to the table to forge a new bilateral agreement by the end of the year.

Civil aviation minister Praful Patel, speaking yesterday on the sidelines of the International Air Transport Association's annual general meeting in Paris, said the long-awaited deal was in line with his government's overall policy of liberalising its aviation sector.

"The last round wasn't satisfactory for either side. So we need to renew that process," said Mr Patel.

"We really feel the one area we have not been able to make a breakthrough is with Hong Kong. We would like to see much more traffic between and beyond the two countries."

Negotiators last met in January last year, but talks broke down in acrimony after some aggressive brinkmanship resulted in the Indian side leaving the table on the first day of a three-day session, according to people close to the discussions.

The present deal is five years old and does not reflect the newly liberal mandates of either regime.

Mr Patel said India's approach to the talks would not differ now that a merger of Cathay Pacific Airways and Hong Kong Dragon Airlines had been agreed in principle.

"We won't be bothered by the merger. What we concentrate on is the capacity in the market, both ways. Whichever airline operates it doesn't really matter," he said. "India already has more capacity than our national airline needs, so it does not matter if it's Cathay, Dragonair, or someone else. But we need to complete it this year."

[Monkey]

OK so Cathay have scored the deal. They now own 100% of Dragonair. Surely Dragonair at least will join Oneworld!! Air China and Cathay Pacific have also boosted their stakes in each other. News stories from Bloomberg and Reuters:


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.


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.

[Monkey]

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

[Monkey]

Official Cathay Pacific press release:
http://www.cathaypacific.com/intl/ab...141126,00.html

[hkth]

From news.gov.hk:
Cathay-Dragonair deal welcomed

[hkskyline]

Cathay-Dragonair deal to strengthen HK as aviation hub

HONG KONG, June 9 (Xinhua) -- Hong Kong Secretary for Economic Development and Labor Stephen Ip Friday welcomed the shareholding realignments involving Cathay Pacific and Dragonair, by saying that the move will strengthen Hong Kong's role as an aviation hub.

Combining the strength of both companies will enhance their efficiency, IP said, adding "This should benefit the traveling public who should be able to have more choices, and it should be more convenient for them to travel from the Chinese mainland through Hong Kong and then through Cathay Pacific's flights to many destinations all over the world."

When questioned whether the move was monopolization, Ip said, " they have to compete with other airlines, whether foreign or Mainland airlines. There is very keen competition in the aviation sector. Despite the shareholding realignments, it is essential for both companies to continue to compete with other airlines."

He said that he did not foresee any job cuts, and that staff matters are for the companies to decide.

"But I do hope they will continue to spread their business. I do hope that they will continue to buy aircraft. So they would require, for example, more cabin crews," he said.

[hkskyline]

HK PRESS: CNAC Holder Held Up Dragonair Buyout Talks
10 June 2006

HONG KONG (Dow Jones)-- Cathay Pacific Airways Ltd.'s (0293.HK) last 96 hours of negotiations on buying out affiliate Hong Kong Dragon Airlines Ltd. were stalled at the last minute when a minority shareholder of China National Aviation Co. Ltd. (1110.HK) threatened to veto the proposal, the Hong Kong Economic Times reported Saturday.

Quoting unnamed sources, the paper said Air China Ltd. (0753.HK), which owns 68% of CNAC, originally had no plans to take CNAC private.

But it later succumbed to pressure from Dragonair's founder P.K. Chao and agreed to take CNAC private at HK$2.80 per share.

CNAC said in a statement Friday that On Ling Investment, which owns a 9.75 percent stake in CNAC, said it would agree to vote in favor of selling CNAC's stake in Dragonair at an upcoming shareholders' meeting, providing Air China agreed to take CNAC private on the basis of HK$2.80 a share.

Cathay agreed to pay HK$8.22 billion in cash and stock to Dragonair's shareholders for a majority stake it doesn't already own, thus making it a dominant airline in China.

The takeover was closely watched, with trading in the Hong Kong-listed shares of all five companies involved in the talks - Cathay, Air China, Swire Pacific Ltd. (0019.HK), CNAC and CITIC Pacific Ltd. (0267.HK) - suspended since Monday after a newspaper reported on the takeover bid.

Cathay called a press conference at 1430 GMT Thursday, but it canceled it with no explanation.

Economic Times said the deal was only struck between 1430 and 1500 GMT Thursday.

Both Cathay Pacific and CNAC did not answer phone calls Saturday requesting comment.

Newspaper Web site: http://www.hket.com