Cathay Pacific

Air Canada HK link set to trim fares

PUBLISHED : Wednesday, 15 March, 1995, 12:00am
UPDATED : Wednesday, 15 March, 1995, 12:00am

FARES on busy Hong Kong-Canada routes are expected to drop this summer with the arrival of a third competitor in the market.

Air Canada will probably join Canadian Airlines and Cathay Pacific Airways on the lucrative routes to Vancouver and Toronto, following a surprise announcement by Canadian Federal Minister of Transport Doug Young.

The announcement allows Air Canada to serve Hong Kong with four flights a week, pending the result of negotiations with civil aviation authorities, due to end on Friday.

Air Canada's senior director of product management, Danielle Poudrette, who is in Hong Kong for the negotiations, said that the Civil Aviation Department (CAD) had already indicated it would grant slots at Kai Tak airport.

Ms Poudrette said the airline was granted slots at Kai Tak in September in anticipation of Canadian government backing, but was forced to release them in December when Mr Young announced that he would not allow Air Canada to serve Hong Kong.

She said the airline aimed to start its services in June or July, with four flights weekly to Vancouver and Toronto.

Canadian Airlines has daily flights to Vancouver with three a week to Toronto. A fourth direct flight to Toronto begins in May.

Cathay Pacific also has daily flights to Vancouver and hopes to increase the frequency of its Hong Kong-Toronto flights to four a week.

The Canadian government's announcement, which also gave Canadian Airlines rights to service the Philippines, Vietnam and Malaysia, is seen as a major boost for Canada's two struggling carriers.

The announcement follows the signing of an open-skies agreement with the United States last month.

Canadian Airlines posted a loss last year of C$25 million (about HK$136.72 million). In 1993 it lost $381 million.

Air Canada has also lost millions since the recession hit, but posted a strong gain last year for the first time in several years.

Canadian Airlines' general manager in Hong Kong, Richard Webb, said he expected the addition of Air Canada on the route to force lower fares to Vancouver and Toronto.

'It will definitely be good for the consumer because it is assumed Air Canada will have a nice introductory offer,' Mr Webb said.

'Obviously we and Cathay will have to match it.'