CITIC Pacific hit back yesterday at claims there will be room for only one airline in Hong Kong after 1997, saying it is time for Swire Pacific's monopoly to end. Managing director Henry Fan Hung-ling said it was 'about time' managers at Swire, who control the majority of the territory's aviation interests, 'wake up to reality and face competition'. 'We, CITIC Pacific, do not believe that any monopoly can today continue. Historically, Hong Kong has been operating under this . . . and obviously, with the change in sovereignty, that will have to go.' Swire holds a 52 per cent stake in Cathay Pacific Airways and a 13 per cent stake in Dragonair. Cathay controls 30 per cent of Dragonair and 75 per cent of all-cargo carrier Air Hong Kong. CITIC has a 46 per cent stake in Dragonair. Mr Fan said: 'I hope Swire doesn't live on a monopoly. 'No airline can continue to operate in a monopoly, the way it has been. 'Both Cathay Pacific and Dragonair, and for that matter Air Hong Kong, will have to wake up to reality and face competition. It is about time,' he said. Swire and Cathay also have interests in airline catering, maintenance, security, cargo handling and other aviation-related businesses. Mr Fan said CITIC's managers 'took exception' to comments from Cathay managing director Rod Eddington on Monday that Hong Kong would become a one-airline town in line with global industry consolidation. 'Today, Hong Kong already has three airlines, and whether it can accommodate more than one airline not only depends on the economic development in Hong Kong, but also in China,' he said. 'I think it is premature to predict today that Hong Kong can accommodate only one airline - major or minor.' Mr Fan said Swire's opposition to the application by China National Aviation Corp (Hong Kong) (CNAC) for an air operators' certificate - the first step in setting up an airline in Hong Kong - was also 'premature'. He said the company had 'every right' to file its application to set up China Hongkong Airlines and to try to compete with Cathay and Dragonair. 'If CNAC wants to come to Hong Kong, they would have to satisfy the Basic Law requirements that they are a company with its principle place of business in Hong Kong,' Mr Fan said. 'At the moment, nobody knows whether they will satisfy the requirements. 'We think it is premature today to either endorse or object to CNAC coming to Hong Kong. 'So long as they satisfy the rules and regulations, they should be let in,' he said. Mr Fan denied that either CITIC or the family of Beijing textile magnate Chao Kuang-piu, which holds a seven per cent stake in Dragonair, would be selling any of their shares to CNAC. Swire and Cathay chairman Peter Sutch has confirmed the conglomerate and Cathay are in negotiations to sell CNAC a stake in the territory's second carrier, but has said all shareholders are involved. A Cathay source said CITIC and the family of Mr Chao pulled out of the negotiations a month ago, but a combined six per cent shareholding from Cathay and Swire was still on the table. CNAC, thought to be controlled by the regulatory Civil Aviation Administration of China, applied to the Hong Kong Government in March for approval to operate flights from the territory to compete with Cathay and Dragonair. Mr Fan said: 'It is a Cathay Pacific stake and a Swire stake. CITIC is not involved and I can confirm on behalf of the Chao family that they are also not involved.'