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Hong Kong aviation

Increasing aviation competition won’t stop travellers coming to Hong Kong, former Cathay boss says

Tony Tyler defends Hong Kong’s status in face of warnings from Qantas boss that stronger competition could leave the city behind

PUBLISHED : Saturday, 22 April, 2017, 5:14pm
UPDATED : Sunday, 23 April, 2017, 9:04am

The competitiveness of state-owned mainland airlines, Middle Eastern carriers and new ultra-long-haul flights bypassing Hong Kong will not stop the city attracting travellers, an aviation leader has said.

Tony Tyler, who was Cathay Pacific’s chief executive from 2007 to 2011, defended Hong Kong’s status as a premier international hub after warnings from Australian airline Qantas’ boss, Alan Joyce, about the changing landscape of air travel and the possibility that stronger competition would leave the city behind.

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Tyler, 61, who led the International Air Transport Association for the past five years, said the underlying hub model worked.

“We’ve seen with Emirates it works. They’ve got such a strong network that they only need a couple of passengers from different routes to fill up another flight. The success of the Cathay Pacific and Hong Kong model is built on that,” Tyler said.

Explaining how hubs will evolve in the face of rival airports starting non-stop flights, he said: “Yes, you are going to lose share when another airport puts on a new non-stop flight, but then you find new demand – you’ve got growth going on all the time. If you are smart you are adding spokes to your new cities to generate new traffic flows.”

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When Tyler was at Cathay Pacific, the airline launched flights to Milan. He said the route was borderline viable.

“It was instantly very successful and the passenger traffic was coming from places we didn’t expect,” he recalled.

Tyler said the secret to succeed as a hub was to stay competitive in cost and capacity.

His vote of confidence is upheld by new Civil Aviation Department figures showing the number of new flight applications to Hong Kong being rejected rose to 150 per day last year.

Turkish Airlines is one of those firms. The Istanbul-based carrier flies six times a week and has repeatedly applied for a daily service but has been unsuccessful.

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Still, Ahmet Harun Basturk, the company’s vice-president of sales for Asia and the Far East, backed Hong Kong as a well positioned “gateway to the region and Asia’s world city”.

He said the airline could attract both corporate and leisure passengers and Hong Kong offered lucrative cargo opportunities that drew airline business.

Basturk said Hong Kong still “has a lot of potential for airline business and that is the reason it attracts most of the carriers”.

Achim Czerny, an associate professor in aviation management at Polytechnic University, said there was enormous growth in global air traffic and Hong Kong was right in the middle of it.

“While the growth in airport capacity is relatively limited – especially true in Hong Kong where a three-runway system is on the way – I don’t think that in such an environment Hong Kong should be too worried about filling its capacity in the future,” he said.