Monopoly busting in the air
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01/24/2003
There could be some relief in sight for Shanghai's frequent flyers to Hong Kong who question why they have to pay so much for a direct airline ticket.The high-priced Shanghai-Hong Kong route will gain some key competition if Cathay Pacific Airways succeeds in its bid to resume services to China. Until now, Dragonair has had the sole right to be the Hong Kong airline on the lucrative route, regarded as a cash-cow by airline analysts. For Shanghai residents flying to Hong Kong, the choices are stark. Shanghai travel agents will quote a price for a return ticket to Hong Kong on Dragonair at 3,790 yuan (US$456), with no discount. Passengers on China Eastern can bring the price down to 2,880 yuan (US$346) with the usual discount from an agent. Yet a return China Eastern ticket from Shanghai to Shenzhen, adjacent to Hong Kong, can be purchased for 1,610 yuan (US$193) after discount. Small wonder that flights from Shanghai to Shenzhen are full of Hong Kong people looking to cut their travel costs by more than half. Many continue to Hong Kong from Shenzhen on the convenient fast-ferry, which costs 186 yuan (US$22) one way. Yesterday, both Cathay and Dragonair appeared before Hong Kong's Air Transport Licensing Authority (ATLA) over a legal challenge by Dragonair to the market opening. Dragonair said last week that ATLA, an independent statutory body tasked with licensing Hong Kong airlines, was not authorized under Hong Kong's Basic Law to license Cathay on lucrative mainland routes not already provided under arrangements negotiated between the central government and the SAR government. Insiders say they are unsure how ATLA was likely to rule on the issue. Analysts predict some strong arguments between the two airlines over the high-profitable routes. China Daily news
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