Swire Group, whose activities span property, aviation, beverages, marine services, and trading and industrial, is a Hong Kong listed conglomerate. It is the parent of Hong Kong carrier, Cathay Pacific Airways, and Dragonair, and Hong Kong Aircraft Engineering Co (Haeco) is a subsidiary. Swire Pacific and Swire Properties are the main listed arms of the group, which also owns Swire Hotels.
Increased competition can only be beneficial
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THE CONSUMER WHAT has been entirely overlooked in this on-going debate about the future of Hong Kong's skies is the effect the game will have on the consumer. But it can only be beneficial.
From the point of view of the consumer the prospect of higher competition and greater choice has to be good.
Cathay Pacific Airways remains one of the most protected monopolistic carriers in the world, being the only major carrier operating out of one of the world's leading business and financial hubs.
Furthermore, the airline has managed to forge cosy relationships with other carriers including Vietnam Air and Malaysia Airlines. This has tended to reduce the pressure for price competition on routes.
Looking five years on, a new carrier with more flying slots available with the further development of Chek Lap Kok can only be good for ensuring price competitiveness, higher frequency of flights and better overall services.
The precedent for bringing in new carriers and more competition has been set elsewhere. In South Korea, Korean Airlines gave up routes to Asiana Airlines. In Taiwan, China Airlines made way for Eva Air and in Britain, British Airways was forced to let in Virgin Atlantic Airways.
Competition on routes will force carriers to be a bit more imaginative in their approach to potential users. There will be a higher degree of discrimination between the different types of consumers out there.
The price-sensitive types, usually tourists, will get their price-cut packages with no frills.
More regular users of routes but not necessarily on business will get fairly competitive packages but there will be a higher emphasis on service. Business users will be offered a choice of packages all of which emphasise service with luxury frills.
A potential downside to higher competition is less profitable routes are going to be hurt. The number of flights will be reduced, flight times will not necessarily be as convenient and price competitiveness will not be a factor governing the cost of tickets as the big fights will focus on the higher volume and more profitable routes.
Looking at the experience of Hong Kong Dragon Airlines on China routes, there is a factor which will tend to make consumers less price sensitive when selecting their carrier. That factor is safety.
Despite apparent competition on mainland routes and a price competitiveness at mainland carriers over Dragonair, Dragonair flights are consistently booked out.
There is a comfort factor for passengers using an airline they know with a long track record, especially from the perspective of safety and quality of service.