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Aviation History
1986
1986 - 0060.PDF
The Year ol For the past few months a single Boeing 737-200, emblazoned with a golden dragon, has been at the centre of the biggest rumpus in Hong Kong's aviation history. The aircraft has spent little time in the air since arriving in the UK colony in June, but its presence on the tarmac at Kai Tak Airport has become a symbol of the dilemma facing Hong Kong as it edges towards Chinese sovereignty in 1997. Dragonair, which operates the 737 on lease from Guinness Peat, is backed by some of the most powerful members of the Hong Kong business community with a dash of mainland Chinese interests. It is one of a posse of airlines to appear on the scene in the past year, all staking a claim for the right to operate a Hong Kong based international network. But, so far, Dragonair has been the only airline to sit tight through a turbulent summer and autumn, during which the war of words between some of the newcomers and Cathay Pacific has become increasingly bitter, to press home its case at route licence hearings. In late December Hong Kong's Air Transport Licensing Authority (ATLA) licensed Dragonair to serve eight second ary Chinese cities after a stormy six-day hearing. Cathay Pacific, Hong Kong's de facto carrier which is controlled by the London-based Swire Group, had success fully objected to Dragonair's proposed flights to two further destinations— Beijing and Shangai—which it claimed would clash head-to head with Cathay routes only recently authorised after years of Chinese opposition. ATLA ruled that the capacity on these two important routes did not justify the licensing of a carrier in addition to Cathay. But the door was left open to Dragonair which was told it could reapply, a course which the fledgling carrier With the end of Hong Kong's most controversial route-licensing hearing, Chris Birkett assesses the difficulties of establishing new international carriers in the UK colony as it approaches reunion with China. Pictures by Janice Lowe. intends to take. Dragonair general manager Stephen Miller believes that Hong Kong-Beijing will still suffer from undercapacity even after Cathay launches its service on the route in April. Meanwhile Miller says Dragonair will press ahead with the eight-point network. "We can mount a credible operation," Miller tells Flight. The airline is to urge the UK Government to re-open air services talks with China with a vew to winning Chinese authorisation for its network. And Dragonair will make a direct approach to the Chinese for an immediate expansion of charter opportunities. Miller also intends to explore other avenues, including pushing for scheduled services to Southern Japan. The ATLA decision was nevertheless a blow to Dragonair. The routes to the two major cities formed the financial back bone of its proposals, and Dragonair told ATLA that projected profits without Beijing and Shanghai would be halved over two years. The other destinations are largely untried, and some would not be optimally served with a 737. The short hop between Hong Kong and Guanghou, for example, would just be profitable with 737s at 90 per cent load factor, according to Miller, but a much more suitable aircraft would be a Shorts 360 or an F.27. However, the loss of Beijing and Shang hai will not sound Dragonair's death knell. The animal is still breathing fire. Miller says that its financial backers will be prepared to stand behind it even without the lucrative primary destinations, and press on with the more limited China network. Certainly those backers have already proved their patience during Dragonair's eight-month history, in which the carrier's operations have been largely restricted to a weekly charter to Malaysia. Dragonair was established last April by Hong Kong Macau International Investment, a vehicle for joint Hong Kong/China ventures set up in the wake of the Sino/British agreement on UK withdrawal from the colony. With China taking a substantial FLIGHT INTERNATIONAL, 11 January 1986
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