Cathay Pacific layoffs | Hidden worries about inheriting the Dragonair route? Transport and Housing Bureau: Dragonair's shipping rights must be returned to the government

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Written by: Golden Chess

2020-10-21 19:03

Last update date: 2020-10-21 19:50

Cathay Pacific Airways today (21st) issued a notice to announce the restructuring plan, drastically reducing 8,500 positions, and its subsidiary Dragon Airlines ceased operations today.

Luo Xiangguo, a senior consultant of the Aviation Policy Research Center of the Chinese University of China, said that if Cathay Dragon Airways cancels its license, the traffic rights must be returned to the government and then open to local airlines for application. "It’s not that Dragonair can privately decide whether you want to do it. ".

Luo also pointed out that in addition to Cathay Pacific airlines, Hong Kong has only one local airline. The government will consider the financial capabilities, operating capabilities and experience of the application company when granting traffic rights.

Due to the internal financial problems of Hong Kong Airlines, Luo said bluntly that "Cathay Pacific is better than Hong Kong Airlines." It is expected that Cathay Pacific will regain the original routes operated by Dragonair.

Cathay Dragon operated more than 40 destinations before the suspension, mainly on mainland routes, including Southeast Asia and India routes.

Cathay Pacific announced today that it intends to seek regulatory approval for Cathay Pacific and its wholly-owned subsidiary Hong Kong Express to operate most of the routes originally operated by Cathay Dragon.

Luo Xiangguo stated that the Hong Kong government granted Cathay Dragon the air traffic rights. Therefore, after the relevant airlines are suspended, the government needs to withdraw the air traffic rights, and then publicly let the Hong Kong aviation industry apply for the operation of relevant routes. "It’s not that Dragonair can decide privately. If you have one, you have one."

Luo Xu said that at present, apart from Cathay Pacific, Hong Kong has only one local passenger airline. As for the Greater Bay Area Airlines, it is still in the licensing stage.

When the government is considering granting air traffic rights, it will consider the experience, financial capabilities, and business arrangements of the applicant company. He bluntly stated that "Cathay Pacific has an advantage over Hong Kong Airlines.

He believes that Cathay Pacific has many years of experience and can prove to the government that it has more advantages. If only Cathay Pacific submits the application when applying publicly, there is no competition from other companies. route.

Luo Xiangguo said that if Cathay Dragon Airways cancels its license, the traffic rights must be returned to the government and then open to local airlines for application.

(Information Picture/Photo by Lu Yiming)

Regarding the time required to apply for air traffic rights, Luo Xiangguo said that if only one Cathay Pacific airline applies, the time can be very fast, "especially when it is opened, not a new company."

Under conditions such as complete financial reports, the government does not need to "turn around much better."

However, he believes that the current economic situation is unsatisfactory and the aviation industry has suffered a severe setback. He bluntly said that "I am in a hurry, and there are no customers at the moment.

Tan Wenhao said that Cathay Pacific can take over the rights of Dragonair as usual, Luo Xiangguo: no comment

As for the Legislative Council Member Tan Wenhao, who had served as a pilot at Cathay Pacific, he stated in Commercial Taiwan this morning (21st) that Cathay Dragon is wholly-owned by Cathay Pacific. Cathay Pacific can take over the shipping rights of Dragonair as usual, but now it has to seek regulatory authorities. The approval cannot be ruled out because the Mainland Civil Aviation Administration does not allow Cathay Pacific to expand.

He said: "It is okay as usual, and it should be better before implementation. IKEA wants to bring back the regulatory agencies that I mentioned. Is it a mainland side?"

Tan Wenhao quoted that last year the Civil Aviation Administration of the Mainland said that Cathay Pacific failed to meet the "safety requirements" and prevented Cathay Pacific from expanding its air rights and increasing its routes. "During the social movement last year, many civil aviation bureau personnel would board the plane and conduct surprise inspections. "Secret", I believe Cathay Pacific was already "fat" at that time.

He believes that Cathay Pacific may not be able to directly take over the rights of Dragonair, otherwise it will become a new route.

When Luo Xiangguo was asked about Tan Wenhao's remarks, Luo said that he "does not comment."

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Transport and Housing Bureau: Dragonair's shipping rights must be returned to the government

A spokesperson for the Bureau of Transportation and Housing said that after Cathay Dragon Airways is completely grounded, it must return the traffic rights to the government and cannot transfer it to other companies on its own.

After the government takes back Cathay Dragon’s traffic rights, local airlines can apply to the Transportation and Housing Bureau for the use of the traffic rights, which will be allocated by the Transportation and Housing Bureau according to the established mechanism.

During the process, other local airlines have the opportunity to provide comments on the application.

After integrating the opinions collected, the Transportation and Housing Bureau will process the application in accordance with the established guidelines, considering factors such as encouraging healthy competition, whether it is beneficial to Hong Kong's position as an international aviation hub, and the overall development of Hong Kong's aviation industry to determine how to allocate it.

In conclusion, the primary principle of air rights allocation is that public resources can be fully utilized to consolidate or enhance the competitiveness of Hong Kong's aviation industry. 

The Transport and Housing Bureau knows that Cathay Pacific Group intends to apply for the right to return from Cathay Dragon.

Upon receipt of further information submitted by the Cathay Pacific Group regarding the application, the Transport and Housing Bureau will handle it according to the established mechanism.

The circumstances and complexity involved in each application are different, and the processing time cannot be generalized.

Due to the specific circumstances related to navigation rights and their distribution, confidential negotiations between the government and the government, and commercially sensitive information, the authorities will not disclose the details to third parties.

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