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Old November 8th, 2004, 08:52 AM   #481
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Industry returns show mainlanders stick to the surface
Murray Bailey
8 November 2004
South China Morning Post

Hong Kong's travel industry traffic returns were 30 per cent up on the 2001 base year in August. The bulk of this growth is related to the impressive growth in travel to and from the mainland.

Without this, estimated growth in August - the latest month for which data is available - would have been a less-impressive 10 per cent.

But one segment, the number of passengers using the airport, is well below that top-line growth. The airport has managed only a 12 per cent increase in passengers - in other words, growth similar to non-mainland growth.

The reason is that numerous travellers from the mainland are entering Hong Kong through land borders. Many, after all, are travelling from Guangdong.

The good news for the airport is that this traffic base can be considered as future potential for the airport. A low-fare airline flying between Hong Kong and the mainland would also bring benefits. However, the bulk of low-fare traffic could go to a rival regional airport.

There are many to choose from - Guangzhou's new airport, Macau, Shenzhen and Zhuhai - and all are eager for the traffic boost that low-fare airlines bring.

HOTELS gather strength While Hong Kong is losing share in its position as an international aviation hub, its hotel sector is strengthening, growing much faster this year than its neighbours. Growth in hotel revenue was 20 per cent up on average to August - which compares with just 11 per cent growth in Macau and 12 per cent in Shenzhen.

This is not merely a Sars-related factor. When compared with the same period in 2001, hotel revenues in Hong Kong are up 19 per cent, compared with 11 per cent in Macau and 8 per cent in Shenzhen.

Newly released figures for international air travel, however, show that in 2003, Hong Kong lost ground as a result of Sars. Thus, its international air travel total is now less than twice the size of that in the mainland.

Since the change of sovereignty in 1997, Hong Kong's international air traffic has grown by only 14 per cent while the mainland's has grown 54 per cent.

But even if the growth rates from over the past five years were maintained, the mainland still seems unlikely to overtake Hong Kong before 2010.

The numbers of air passengers on the main long-haul routes from Hong Kong for the first half of this year were good, bad and indifferent - not quite what airline managers are saying they were.

According to data from the civil aviation bodies in Australia, Britain and the US, passenger travel to and from Hong Kong is at different stages of recovery from the setbacks that started with the September 11 terrorist attacks.

The number of passengers flying directly between Hong Kong and Australia, for instance, started recovering only this year. But the peak year for passengers was in 2000 and this year's January-to-June total - at 639,000 - was still below the 689,000 counted over the same period in 2000.

The number of passengers flying direct between Hong Kong and Britain, however, surpassed the 2001 half-year total in 2002 - the year following the 9-11 attacks.

Traffic between Britain and Hong Kong peaked in 2000 but this year's total of 612,000 passengers was comfortably above the 521,000 recorded in 2000.

Passenger travel between Hong Kong and the US is almost back to normal. In the first half of this year, there were 744,000 passengers flying direct between the two destinations. That compares with just below 800,000 in the first-half of 2001.

Full recovery may happen within this year, even though some monthly figures have been below those in 2001.

Compiled by Murray Bailey, research director and editor, Travel Business Analyst
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Old November 8th, 2004, 09:27 AM   #482
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Old November 8th, 2004, 09:38 AM   #483
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Irish Independent
November 6, 2004

HOW HONG KONG COULD BUILD AN M50 IN JUST SIX MONTHS

'It would take us about six months to build the M50," said the man from Hong Kong, and one is inclined to believe him.

They built their new international airport in five years. That is impressive enough, until you realise that the airport was built at sea, on millions of tons of landfill quarried from the precipitous mountains and islands of the Hong Kong region.

Of course, an airport needs infrastructure, so they threw up a couple of gigantic suspension bridges (think of the new Boyne bridge multiplied by 50) across the harbour, with connecting motorways. Since the airport opened, six years ago, they have added a high-speed rail-link tunnel under the harbour to connect it with downtown Hong Kong.

And that is just the airport. There is also the new metro system, the new Cyberport, a multi-media fantasy of the latest technology, plus shopping. Then there's the new science park, which will be almost the size of Dublin's Docklands development, on more landfill, at what seems the bargain price of Euro 1.5bn.

A sense of gloom was therefore added to the jet lag when I returned from a visit to Hong Kong in time to read of the Cork and Limerick motorways that will not meet. They will not meet because of the cost and delays in acquiring land for a link road between them. An Bord Pleanala reluctantly gave approval for what will be yet another flawed piece of infrastructure because it would take four years just to get through the process of re-designing the road.

Why then, would Donald Tsang, the chief secretary of the Hong Kong Special Administrative Region, and therefore number two in its government, pay a visit to Ireland this week? To have a bit of a laugh? Apparently not. Mr Tsang has been a regular visitor and believes Ireland and Hong Kong have much in common and much to learn from each other.

We could certainly learn how to plan and construct physical infrastructure. And them? The reason becomes a bit clearer when Mr Tsang begins to talk about Hong Kong's economic future. The former British colony has been part of China since 1997, but with a separate legal and political system, border controls and, until now, tariffs on goods 'exported' to the mainland.

This 'one country, two systems' is guaranteed by law, but China's explosive growth has increased trade and lowered barriers faster than anyone expected in 1997. Since January, goods made in Hong Kong, even if made, say, by an Irish company, are now duty-free in China. Flows are increasingly two-way, with 280 large Chinese companies already listed on Hong Kong's stock exchange, which was second only to New York in capital raised last year.

More dramatically, around 10 million people from the mainland are expected to visit the island city next year - more than Hong Kong's total population of seven million - as Beijing eases restrictions on travel visas.

Many come to buy the luxury goods coveted by China's new well-to-do, from Bulgari jewellery to Louis Vuitton handbags. This seems odd, but the taxes are higher on the mainland and one can never be sure that the goods are genuine.

According to some experts, that last point may be more important than it seems. "The leaders in Beijing see Hong Kong as an example of what China must become," says one. "They are having this enormous economic success, with growth of 10% a year in an economy already bigger than Germany's.

"But there are still great weaknesses in the banking system, prompt payment for goods and services, protection of intellectual property, and so on. Hong Kong is strong in all of these. Beijing wants to preserve that. Increasingly, they use Hong Kong as a training ground for Chinese managers and officials."

That kind of thinking in the Chinese leadership has allayed many of the fears expressed in 1997. "We will not have to change our value systems because of economic integration with the mainland," says Mr Tsang. "Freedom and the rule of law will remain the over-arching principle. They are the main attractions for mainland firms and will never disappear."

Then the penny drops. "It is like the case of Ireland. You are English-speaking and you operate under the English common-law system," says the chief secretary, who was educated by Irish Jesuits and is a devout Catholic. "That makes you attractive to US firms coming to Europe, who feel comfortable doing business here."

That's why they are interested. Although the parallel may seem extreme, they see Ireland as a small country, on the periphery of the EU, with a different history and political tradition from most of mainland Europe, yet an economic success. Why, we were even a British colony, of sorts.

Hong Kong sits at the mouth of the great Pearl River delta and, after the free-trade agreement, its leaders already talk of the region in terms of the EU. "The plans we have to form an economic entity in the nine Chinese provinces of the delta, plus Hong Kong, would cover 460 million people, which is about the same as the enlarged EU," Mr Tsang says.

"Within that, Hong Kong would specialise in financial, business and legal services, as well as being a major transport and logistics hub. The region would be a role model for the new China, and the rest could see whether this formula works." In January, the Taoiseach will visit mainland China and Hong Kong. Mr Ahern mainly wants to know how Irish companies can get a bigger share of the astonishing economic growth. Exports are already equal to those of Japan, and growing over twice as fast.

Several Irish companies are operating in Hong Kong. One provided security technology for the city's Octopus smart card, regarded as a world leader, which can be used to buy almost anything, from newspapers to train tickets.

Mr Ahern might like to ask about that, coming from a country that exports high technology, but makes almost no use of technology itself. And about building tunnels. And about how to have effective competition and superior services in telecommunications and public transport.

And about property booms and crashes, perhaps. They do those better, too. After the Asian financial crisis of 1998, property prices in Hong Kong fell by 70%. They are still 40% below their 1997 level. Some blame previous government policies designed to boost property prices. Mr Ahern might reflect on his government's policies, which do the same via enormous tax breaks.

"In future we will let market forces work more in the property market," says Mr Tsang. "But people love property. As soon as they see prices rising again, they forget all the previous pain." Let's hope it's not another lesson we still have to learn.

Brendan Keenan
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Old November 8th, 2004, 10:29 PM   #484
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Old November 8th, 2004, 10:48 PM   #485
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South China Morning Post
November 6, 2004

Growth in cargo slows at airport terminal
Annette Chiu

Growth in freight volume at Hongkong Air Cargo Terminal slowed last month due a drop in imports and decelerating export growth.

The terminal, which is responsible for more than 70 per cent of air freight at Chek Lap Kok International Airport, handled 213,868 tonnes of cargo last month, up 7.6 per cent year on year, according to the provisional figures provided by the operator.

In the first 10 months, it handled 1.85 million tonnes of air freight, up 14.3 per cent year on year - a rate one percentage point lower than the growth of the first nine months.

The growth in exports slowed to 8.2 per cent last month to 125,697 tonnes, despite a comparative 18 per cent increase in the first 10 months, with volume reaching 1.03 million tonnes.

The growth rate of exports to Europe, the largest market for China's manufactured goods, dropped to less than 20 per cent for the first time this year. Volume last month rose only 13 per cent to 41,730 tonnes. The year-to -date figure was 347,175 tonnes, up 27 per cent year on year - two percentage points less than the 29 per cent seen in the January to September period.

Exports to the US grew 8.4 per cent to 38,798 tonnes, while year-to-date figures show a 13 per cent increase to 301,535 tonnes.

Import volume dropped 0.4 per cent last month to 57,510 tonnes.
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Old November 9th, 2004, 04:15 AM   #486
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New ferry terminal allows efficient, faster service
Zheng Caixiong. China Daily. (North American ed.). New York, N.Y.:
Jun 8, 2004

GUANGZHOU: A new, more modern ferry terminal is expected to start service in the Nansha Economic and Technological Development Zone next month, furthering ties between Hong Kong and the Pearl River Delta area.

From the new terminal, high-speed hovercraft will be able to reach Hong Kong's harbour in Tsim Sha Tsui in less than an hour.

According to Yuan Rongmin, deputy general manager of Nansha Ferry Co Ltd, his firm is exploring opening ferry service in the years to come from Nanshan to Macao and Hong Kong's Chek Lap Kok International Airport and the Disney Theme Park which is now under construction on Lantau Island.

"Negotiations to open the new ferry service from Nansha are now well under way," said Yuan.

Located at the mouth of the Pearl River, the new terminal reaches a construction floor space of more than 10,700 square metres and is designed to be able to handle more than 900,000 passengers annually.

The new terminal in Guangzhou's Haizhu District is about 38 sea miles away from Hong Kong and 41 sea miles from Macao.

It is close to the newly built Nanshan International Convention and Exhibition Centre and the five-star Puzhou Hotel.

Construction commenced in October 2000, costing more than 110 million yuan (US$13.25 million).

Yuan said the terminal will have evening and night ferry launches to Hong Kong to meet the demand created by a growing number of Hong Kong tourists and investors.
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Old November 9th, 2004, 04:30 AM   #487
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GLOBAL LOGISTICS: Hong Kong
Ken Mark. Canadian Transportation Logistics. Don Mills:
May 2004

The major challenge that Hong Kong faces is crafting a new business and logistical model as China develops into the dominant economy in Asia. Simply put, as China prospers and modernizes, more firms will go around rather than through Hong Kong to do business there. In the short term, Hong Kong must stress the benefits and advantages of its higher-cost business services to Chinese and overseas users. But over the long term, it must adapt those existing strengths and advantages while marketing them as value-adding, specialized services. "Hong Kong has to evolve from its previous near-monopoly as the entry point for doing business with China," says Tony Burger, Canada's consul general in Hong Kong, "to a position where it can compete effectively with other emerging cities within China."

At present, of the 30,000 trucks crossing the boundary from Guangdong province into Hong Kong every day, about one third are destined for Kwai Chung despite an estimated US$200 premium per container in handling charges compared to Chinese facilities. Yet users are willing to pay more for Hong Kong's higher productivity, security and convenience. And to participate in growth on the other side of the boundary, HIT is exporting its expertise by entering into joint-venture agreements with Chinese partners to develop and operate new container operations in Yantian near Shenzhen. In the long run, HIT's Hong Kong assets will remain profitable by focusing on specialized services.

What does the future hold in store for Hong Kong? Says Gary Chan, Regional Director-North, BDP Asia Pacific in Hong Kong for Philadelphia-based BDP International, "Until direct trade with China becomes dominant, Hong Kong will continue to be the comfort zone for China's burgeoning global trade partners, playing the crucial part of middleman for trade financing, communication with factories, sound legal contracts, inbound logistics and added service value."

The most trusted entry point into the Chinese market faces the spectre of being bypassed as China modernizes its own logistics infrastructure. Contributing editor Ken Mark spent a week in Hong Kong to discover how this vibrant logistics centre plans to keep that from happening.

Hong Kong has successfully rebounded from the SARS outbreak with its characteristic gung-ho, can-do attitude stronger than ever. It remains one of the world's most vibrant business, commercial and logistics centres. Despite its tiny size (1,100 sq. km] and small population (6.8 million), Hong Kong enjoys significant trade relations with Canada. We rank in the top 20 of its import sources and in the top 10 of its export markets, (see sidebar story). However, those numbers pale in comparison to the growth potential with neighboring China, the world's fastest growing economy.

The major challenge that Hong Kong faces is crafting a new business and logistical model as China develops into the dominant economy in Asia. Simply put, as China prospers and modernizes, more firms will go around rather than through Hong Kong to do business there. In the short term, Hong Kong must stress the benefits and advantages of its higher-cost business services to Chinese and overseas users. But over the long term, it must adapt those existing strengths and advantages while marketing them as value-adding, specialized services. "Hong Kong has to evolve from its previous near-monopoly as the entry point for doing business with China," says Tony Burger, Canada's consul general in Hong Kong, "to a position where it can compete effectively with other emerging cities within China."

In more concrete terms, according to Sammy Chey, corporate manager Far East, PBB Global Logistics in Fort Erie Ont., Hong Kong's role as a re-export point from China and as a trans-shipment point is fading. The full impact of WTO (World Trade Organization) rules which China joined in 2000 will become more transparent after 2006.

But the first order of business is to make the boundary between Hong Kong and China irrelevant. For now, Chinese and foreign firms willingly pay premium prices to tap into Hong Kong's vast pool of financial, business and supply-chain expertise and use its ultra-efficient transportation infrastructure. But those advantages will diminish as China catches up.

Hong Kong's most obvious logistics shortcoming is boundary congestion - trucks can take up to three hours to cross. But there are massive plans to modernize the transportation infrastructure, simplify red tape and introduce innovative business solutions.

Ultimately, Hong Kong may wind up playing second fiddle to Shanghai as China's financial and transportation centre. But thanks to geography, it will never fade away completely because it is adjacent to the Pearl River Delta - home to more than 40 million people and extensive manufacturing facilities that make it southern China's production dynamo.

How successful that strategy will be remains unclear. But history is on Hong Kong's side. After losing millions of factory jobs to China and elsewhere, Hong Kong successfully transformed itself into a thriving service economy with more than 80% of its GDP and employment coming from that sector.

The following vignettes highlight the depth and breadth of the expertise, not to mention the optimism and determination, of executives and officials as they begin helping Hong Kong carve out its future niche in the Asia-Pacific economy.

Except for rail, Hong Kong's cargo-moving transportation infrastructure is unmatched in the world. It is the world's busiest container port handling 19.1 million TEUs in 2002. Of that total, the nine terminals and 22 berths at the Kwai Chung container port handled 62%. The rest is Pearl River traffic that continues to increase. Growth at Kwai Chung, however, has stalled - in 2003 it was more or less flat. Across the boundary in China, newer facilities - closer to manufacturing facilities - enjoy 40% annual increases albeit from a much lower base. John Meredith, group managing director, Hutchison Port Holdings, the operators of Hong Kong International Terminals (HIT), remains unfazed by the competition. "I would not mind handling less cargo," he says, "as long as we could do it more profitably by lowering our costs and level of investment. What's really important is not how much tonnage you handle, but how much money you make doing it."

At present, of the 30,000 trucks crossing the boundary from Guangdong province into Hong Kong every day, about one third are destined for Kwai Chung despite an estimated US$200 premium per container in handling charges compared to Chinese facilities. Yet users are willing to pay more for Hong Kong's higher productivity, security and convenience. And to participate in growth on the other side of the boundary, HIT is exporting its expertise by entering into joint-venture agreements with Chinese partners to develop and operate new container operations in Yantian near Shenzhen. In the long run, HIT's Hong Kong assets will remain profitable by focusing on specialized services.

The story and the strategy is echoed by HACIS, the operators of Super Terminal One at Hong Kong International Airport (HKIA), number one in the world in terms of air cargo volume. Its SuperTerminal One is the world's busiest air cargo facility. For 2003, the estimated total is about 2.0 million tonnes up from 1.9 million tonnes in 2002 or about 77% of Hong Kong's total. Another facility, Asia Airfreight Terminal handles the rest. Despite the current rosy picture, HACIS is aggressively protecting and augmenting its market share against emerging competitors within China.

To do so, HACIS must remove boundary-crossing bottlenecks. Besides traffic congestion, problems with customs documents and their transmission add to the delays. For example, cargo arriving from a 13-hour flight from Europe can sit for several days at HKIA waiting for paperwork to clear Chinese customs. To break the logjam, HACIS introduced its SuperLink China Direct service that whisks shipments quickly through customs, consolidates cargo for various consignees and delivers it in bonded trucks for next-day delivery in China. In addition, since all shipment-related data is now digitized, cargo can be tracked and traced electronically.

In October 2003, HACIS launched a supplementary southbound service routed through its new Futian Free Trade Zone consolidation warehouse in suburban Shenzhen. Phase I focuses on bulk cargo and Phase II will address pre-pack cargo. To speed up customs procedures, goods are pre-cleared at the facility before they are packed. Most important, the service side-steps traffic congestion by using Passage # 1, an exclusive, limited-access crossing point for free trade zone tenants.

Such time-saving, value-added services will help maintain Super Terminal One's and HKIA's competitiveness as modern Chinese air cargo terminals and airports start coming on stream.

SuperTerminal One ranks as one of the modern logistics wonders of the world. It is six storeys - 400 metres high - with 3600 slots (60 × 60) with 274,000 sq. m. of floor space. There is also a two-storey, 74,000 sq. m. Express Centre dedicated to integrated couriers. As each item is unloaded from a plane, it is placed in a yellow bin and given a unique tracking number. Since the storage system is totally automated - robotic cranes transport the bins without human intervention and Customs officials have complete independent control over the entire system enabling them to call for the inspection of any shipment at any time - there is no need to segregate import and export goods. On November 30, 2003, SuperTerminal 1 set a one-day record of handling 7,700 tonnes of cargo.

Nevertheless, Hong Kong is not about to rest on its laurels. The government continues to announce a steady stream of ambitious infrastructure projects that will forge closer transportation and logistics links with the Pearl River Delta (PRD). For example, there are plans to double the number of customs and immigration booths at Lok Ma Chau, the busiest crossing point that handles almost 23,000 trucks each day.

Another proposal already moving ahead is the Hong Kong-Shenzhen West corridor - a bridge linking Shekou with Deep Bay. It will open up the PRD's western region which currently lacks a direct Hong Kong link. One of the project's innovations will be the co-location of Chinese and Hong Kong customs and immigration facilities in a single centralized location. Here at home, such a concept remains a distant dream for streamlining Canada-U.S. border crossings.

A more ambitious plan is the construction of a 50-km-long bridge system linking Hong Kong with Macao further opening up the movement of goods. The two cities are currently connected only by a hydrofoil passenger ferry service.

Also on the agenda is a leading-edge solution for sending and sharing business data between and among supply chain and other business partners. The DigitalTrade & Transportation Network (DTTN) currently under discussion is a pioneering effort seeking to unify the existing hodgepodge of different IT systems of transportation, logistics, trade, finance and other business firms into a virtual network. "We see it as a way to bridge the communications gap," says Raymond Cluing, chief assistant secretary for economic development & labour for the Hong Kong government, "by integrating the disparate IT systems of all the various companies and organizations. It will boost Hong Kong's competitiveness because it will help small- and medium-sized firms optimize their assets by making it easier for them to make fuller use of their IT systems." Once established, DTTN will be the one of the first such networks in the world.

What does the future hold in store for Hong Kong? Says Gary Chan, Regional Director-North, BDP Asia Pacific in Hong Kong for Philadelphia-based BDP International, "Until direct trade with China becomes dominant, Hong Kong will continue to be the comfort zone for China's burgeoning global trade partners, playing the crucial part of middleman for trade financing, communication with factories, sound legal contracts, inbound logistics and added service value."

Canada-Hong Kong Trade

In 2002, two-way trade between Canada-Hong Kong reached $2.2 billion a decline of 12%, due mostly to continuing trade liberalization and China's accession to the WTO that has diminished its role as a commercial centre for China. Yet, Hong Kong remains a major gateway to its giant neighbor since it is still China's largest port.

That year, Canada ranked 19th among Hong Kong's source of imports and 10th in terms of Hong Kong's export destinations. Canada exported $1.2 billion worth of goods to Hong Kong, of which an estimated 40% ended up in China.

Following its return to Chinese sovereignty in 1997, Hong Kong became a Special Administrative Region (SAR) but remains a separate customs territory with a separate membership in the World Trade Organization and the Asia-Pacific Economic Cooperation (APEC) forum. More important, it also maintains its own financial system and formulates its own monetary and financial policies including the authority to issue Hong Kong currency, pegged to the U.S. dollar.

As a SAR under Chinese sovereignty, Hong Kong functions under China's "one country-two systems" banner, hence the dividing line between them is considered a boundary not a border.

The city is home to the largest Canadian business community in Asia, with over 150 local or regional Canadian corporate offices located there.
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Old November 9th, 2004, 07:36 AM   #488
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This ad has been floating around airliners.net and another aviation forum :



HMY Airways was launched in November 2002. The Vancouver-based airline is owned by Dr. David T.K. Ho, an energetic Canadian entrepreneur who was born and raised in Hong Kong. Known today as Harmony Airways, the rapidly growing airline has three Boeing 757 aircraft that fly from Vancouver to Toronto, Los Angeles, Las Vegas, Honolulu and Maui.

If the rumours are true, then Harmony will be the third Canadian airline in history to fly to Hong Kong (former Canadian Airlines and Air Canada). Currently, the Vancouver - Hong Kong nonstop route is flown by Cathay Pacific and Air Canada.
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Old November 9th, 2004, 09:49 PM   #489
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Tuesday November 9, 3:30 PM
Airlines apply in Hong Kong to extend fuel surcharges

(AP) Fifteen airlines have applied to extend their fuel surcharges on passenger flights because of high oil prices, Hong Kong's Civil Aviation Department said Tuesday.

Twelve of the airlines also want to increase their surcharges, a department spokesman said on condition of anonymity.

The names of the airlines were not disclosed pending consideration of their applications.

However, Hong Kong's two airlines _ Cathay Pacific Airways Ltd. and Dragon Airlines Ltd. _ said last month they have asked the Hong Kong government for permission to extend their surcharges beyond the current expiration date of Nov. 30.

Cathay said in a newsletter that fuel accounts for about 25 percent of its total operating cost. This year the airline has spent about 2.7 billion Hong Kong dollars (US$346 million; euro 270 million) more than budgeted on fuel. Surcharges have covered about HK$1 billion (US$128 million, euro 100 million).

In August, the Civil Aviation Department approved applications by 20 airlines to extend the surcharge period. Of the total, 13 airlines were allowed to increase the surcharges to a range of US$7 to US$19 from US$4 to US$14.
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Old November 10th, 2004, 06:40 AM   #490
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Old November 10th, 2004, 09:34 AM   #491
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Old November 10th, 2004, 05:14 PM   #492
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Old November 10th, 2004, 07:52 PM   #493
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BA eyes more China flights but no new destinations

LONDON, Nov 10 (Reuters) - British Airways Plc , Europe's second-biggest airline, said on Wednesday it planned to increase flights on existing routes in China but had no immediate plans to fly to new destinations in the country.

BA also said it was eyeing new services to South Africa and India as it seeks new business amid tough competition in the European short-haul sector and a crowded North Atlantic market.

BA's commercial director Martin George said the airline planned to increase existing services to Hong Kong and Beijing but had no immediate plans to fly into Shanghai.

"Whether we go anywhere else in China we will wait and see," George told a Foreign Press Association lunch.

China and Britain signed a new air services agreement earlier this year, paving the way for increased airline traffic between the two nations.

India and South Africa also hold potential for the carrier. Chief Executive Rod Eddington will appear before a special hearing of the UK aviation regulator on Thursday to argue for a generous slice of new air services between India and Britain.

The South African and British governments will also hold talks later this month aimed at increasing air traffic between the two countries.

BA posted a 23 percent rise in second-quarter operating profit on Tuesday but said high fuel costs and lower ticket prices would continue to weigh on its performance this year.

George told reporters the airline's future profit growth would rely on further cost cuts, but said he did not expect revenue growth to decline next year from the 2-3 percent expected in the current financial year to March 2005.

"Profits in the short to medium term will come from increasing focus on costs," he said, citing potential savings from more on-line bookings and a reduction in staff sick leave.
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Old November 11th, 2004, 07:24 PM   #494
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Old November 12th, 2004, 07:39 AM   #495
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Old November 12th, 2004, 08:03 PM   #496
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Old November 12th, 2004, 10:10 PM   #497
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Old November 12th, 2004, 10:49 PM   #498
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Non-stop cross-strait flights proposed; Taipei seeks charter runs with mainland for Lunar New Year
Jacky Hsu
13 November 2004
South China Morning Post

Taiwan yesterday unveiled a preliminary draft plan to launch reciprocal, non-stop charter flights between the island and the mainland.

Under the draft, the two sides would run charter passenger and cargo flights during the upcoming Lunar New Year holiday, to be followed by regular charter services if things went smoothly.

"As soon as the mainland side expresses its desire for such flights, we will appoint the Taipei Airlines Association to help in bilateral talks so that such a service can be launched as soon as possible," said Mainland Affairs Council vice-chairman Chiu Tai-san.

He said Taiwan was willing to adopt the 2002 Hong Kong model in making such flights possible.

In the 2002 talks between Taiwan and Hong Kong on the renewal of their air links, the two sides agreed to direct flights based on three principles - shelving political differences, respecting practical requirements and conducting private sector negotiations.

Mr Chiu said the council had invited relevant government departments and private business groups in Taiwan to discuss the issue.

He said national security should not be of concern if the two sides used the existing flight routes open for Hong Kong. He said authorities would not worry about a surprise attack from the mainland as there were adequate facilities for the island to detect and determine whether an aircraft was hostile.

Mr Chiu called on Beijing to temporarily set aside political differences to allow such flights. He said Taipei's offer demonstrated the island's goodwill to improve ties.

"I am confident that the two sides will finally be able to start such services," he said, adding that Beijing once proposed that the two sides discuss the issue based on the 2002 Hong Kong model.

Taiwan and the mainland launched their only charter flight service last year to transport mainland-based Taiwanese businessmen in Shanghai back to the island for the Lunar New Year holiday.

But Beijing refused to permit such a service this year on the grounds that such flights should be reciprocal, without a stop in either Hong Kong or Macau.
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Old November 13th, 2004, 02:15 AM   #499
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Dragonair New Ad Campaign
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Old November 13th, 2004, 05:20 AM   #500
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Heavyweight special interests could torpedo HK's air-hub status
Joseph Lo
13 November 2004
South China Morning Post

ASIA'S FIRST AND, so far, most successful low-cost airline begins trading as a public company on Monday in Malaysia. It could easily have been in Hong Kong.

Three-year-old AirAsia, which can claim to be Asia's first and most successful budget airline, has finally completed its initial public offering, raising about
US$200 million to help fund its expansion.

With the new breed of airlines stealing the limelight from traditional network carriers in Europe and the United States, AirAsia's IPO is a salutary reminder
that Hong Kong has lost ground as a centre for free-market entrepreneurship. For all the government's bluster about liberalisation, few investors have tried
to launch a new airline in Hong Kong for the better part of two decades.

Contrast that record with the new carriers being launched in Singapore (Valuair, Jetstar Asia and Tiger Airways), Indonesia (Lion Air), Thailand (Nok Air and AirAsia Thailand) and Malaysia with AirAsia.

Even Macau is getting into the act, with Australia's Virgin Blue (another relatively new carrier that just listed this year) making overtures to launch a
China-focused airline with China National Aviation Co (CNAC) and Shun Tak as partners.

Macau officials say privately that other groups are also negotiating for a slice of the city's market, as an alternative low-cost gateway to Hong Kong and the Pearl River Delta.

Ironically, government and industry officials agree that there is a need to introduce more locally bred competition into the airline sector at Chek Lap Kok.

At an industry forum this month, permanent secretary for economic development and labour Sandra Lee Suk-yee said Hong Kong needed to offer consumers more choice to maintain our lead as a regional air hub and gateway
to the mainland.

"We want a level playing field. Let low-cost carriers and [existing] airlines compete on a level playing field {hellip} [then] let the consumer decide," Ms Lee said.

She added: "This means more competition, [which is] in the interest of the travelling public."

Even Citic Pacific managing director Henry Fan Hung-ling, who sits on Dragonair's board by virtue of Citic Pacific's 28.5 per cent stake in the airline,
agrees that new competition on mainland routes from Chek Lap Kok would help reinvigorate Hong Kong's status as a regional hub.

The emergence of CR Airways and Hong Kong Express, two local startups with mainland ambitions, was positive for Hong Kong, he said last week.

Yet both face significant regulatory and market hurdles that the government shows little resolve in helping to solve. It is not even a matter of startups
demanding government subsidies, as Ms Lee has repeatedly said was the case, but the need for a level playing field. That means equal opportunities for
route rights and better protection against anti-competitive behaviour.

For example, the lack of an open skies arrangement between Hong Kong and the mainland, and the dominance of Dragonair in serving mainland routes from Chek Lap Kok, means limited capacity exists in the system to be tapped by a startup.

And on air routes to the rest of the world, the critical mass that Cathay Pacific Airways has built up means it is likewise difficult for a startup to gain a
toehold on key international air-travel markets from Hong Kong.

Contrast that with the Singapore government's resolve to accelerate air-services liberalisation and competition, allowing its carriers to compete for
route rights.

Far from the local market being opened progressively, the recent deal for Cathay to take a 9.9 per cent stake in mainland flag carrier Air China probably
means there will be less, rather than more, intensive competition through Chek Lap Kok.

And industry insiders said privately that negotiations had been ongoing for Cathay to reacquire control of Dragonair from CNAC in the coming months, in order for Cathay to regain more access to the coveted mainland market.

Both Cathay and CNAC declined to comment.

Whether such a deal materialises, it is clear that instead of moving towards a more open aviation industry as our rivals are, Hong Kong is sliding towards the opposite direction. As such Hong Kong faces a gradual erosion of its status as the region's main air hub and mainland gateway to rival cities.

Following a price war launched by state carrier Malaysia Airlines, AirAsia chief executive Tony Fernandes is said to have crashed an exclusive cocktail party in Kuala Lumpur to publicly berate Malaysia's transport minister for allowing the behemoth to engage in alleged anti-competitive behaviour.

Perhaps Hong Kong's would-be airline rebels are simply too polite in confronting the industry's sclerosis.
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