CATHAY Pacific Airways' contract to manage Hong Kong Dragon Airlines (Dragonair) has been replaced by a new agreement giving the territory's second carrier autonomy ahead of its planned listing next year.
The new contract is a five-year co-operation agreement that replaces the 15-year management contract drawn up in 1990 when Cathay and parent Swire Pacific bought a large stake in Dragonair.
Cathay and Swire hold a 43 per cent stake in the 10-year-old carrier, with 30 per cent controlled by Cathay.
Although Cathay spokesman Nick Rhodes denied any link, a senior airline source confirmed the listing of Dragonair - tentatively planned for the middle of next year - was the key reason behind the contract change.
The source said Dragonair had to be seen as autonomous if the stock exchange was to allow a listing.
Industry magazine Flight International said the move would also help protect Dragonair's independence after the handover.