Major airline breaks duopoly

PUBLISHED : Saturday, 01 July, 1995, 12:00am
UPDATED : Saturday, 01 July, 1995, 12:00am

CANADIAN Airlines and Cathay, which have enjoyed a virtual duopoly on passenger travel between Canada and Hong Kong for the past 50 years, are about to be joined by Air Canada.

It will begin a thrice-weekly service to the territory on December 20.

In a territory previously unavailable to Canada's national carrier because of restrictions set by the Canadian Ministry of Transport, the airline is making up for the lost time.

It already has a daily service to Kansai, Japan, and four flights a week to Seoul, Korea.

Anita Leung, Air Canada manager for Hong Kong, China and Southeast Asia, said that having been granted the territory route in March, the airline would fly a 747 400 combi on a return Toronto-Vancouver-Hong Kong leg. The combi would carry half passengers (199 economy seats) and half cargo.

Miss Leung was disappointed Air Canada could not start its service this month.

'We have everything ready to go but permission to begin operations does not apply until December.

'People ask me why it took so long for Air Canada to come to Hong Kong. We would have loved to have come 10 years ago but it wasn't our territory.' With three carriers flying the same route, Miss Leung said she doubted the battle to fill seats would create a price war.

'The market is here, we have the travellers for this route, why would we create a price war?' At Canadian Airlines, which has been servicing the territory since 1949, Bernard Lu, the airline's passenger sales manager, said it was too early to tell what effect Air Canada's presence would have on prices.

'A price war - this is something we can't tell [if it will happen],' Mr Lu said.

'We would rather have healthy competition than under-cutting the price because the [seat] capacity has already increased about 50 per cent and, if another Canadian airline comes to Hong Kong, that total will rise to about 60 per cent.' With Canadian having increased its Toronto-Vancouver-Hong Kong service from seven flights a week last year to 11 a week this year, Mr Lu said the Asian runs had been averaging 83 per cent capacity. 'The increase in flights reflects the demand,' he said.

'Actually, this market is what we call 'VFR' - visit friends and relatives - mixed with business travel and people immigrating. We are also the first airline to offer a direct service to Toronto - via Vancouver.

'Although it is a brief stopover, passengers only have to clear customs in Toronto and for them this makes it very convenient as they don't have to clear customs at the first point of entry.' Canadian will further increase its presence in the region as it has just been given the rights to fly to Manila, Ho Chi Minh City and Kuala Lumpur.

But perhaps its biggest drawcard is that it is the only North American airline to offer direct flights to Beijing.