Hong Kong's Cathay Pacific Airways has begun formal integration work with Dragonair after completing its takeover of the smaller Hong Kong-based carrier.

Cathay completed the takeover at the end of September. It wasted no time in unveiling changes, starting with 174 job cuts at Dragonair in Hong Kong and 17 in overseas offices, representing about 5% of Dragonair's total workforce.

Under the takeover agreement Dragonair is being managed by Cathay although the smaller airline will retain its separate brand and identity for at least six years. The takeover, from Air China-owned China National Aviation, CITIC Pacific and Swire Pacific, has given Cathay instant access to over 20 Chinese cities Dragonair serves.

In addition to job cuts, Dragonair has stopped flying to the Thai capital Bangkok, which Cathay serves several times a day from its Hong Kong base, and more route network rationalisation announcements are expected in future. Dragonair will, however, be resuming services to the Thai resort island of Phuket, suspended since early 2005, later in the year.

Cathay says it hopes "to maximise the synergies and opportunities that arise from linking Cathay Pacific's international network and Dragonair's extensive mainland [China] services, bringing significant long-term benefits to both carriers".

Source: Airline Business