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Cathay reverses plans for Hongkong-Toronto service

CATHAY Pacific has announced it will reverse plans to go ahead with a Hongkong-Toronto service this year, vice-president of Canadian operations Mr James Barrington said.

''We will look at the Toronto service at a later date, but our Canadian operations have been very expensive, and at this point we do not have enough 747-400 crews to manage the service,'' he said.

Referring to the current dispute, he said employee demands to control crew timetables and destinations were not acceptable. He said it would be the resolve of management to ''sit it out for as long as necessary''.

Other factors influencing the decision to scrap the Hongkong-Toronto service may also include the airline's dismay over the British Columbia government's requirement that the carrier pay a fuel surcharge of five Canadian cents per litre (HK$0.30 per litre) for refuelling at Vancouver International.

In an interview with the South China Morning Post prior to his departure to head up operations in Tokyo this month, Vancouver operations chief, Mr John McCulloch, said the surcharge adds ''hundreds of thousands of dollars'' to the annual cost of doing business in Vancouver, hinting that the service start date would be delayed.

As his successor, Mr Barrington said he was also waiting for an important legal opinion on whether the BC government could impose a capital tax on Cathay's assets in Canada.


While the legal firm representing Cathay in Vancouver refused to comment on the degree to which the tax could affect the airline's operations, lawyer Mr Les Little said ''capital tax consequences concerning all carriers are currently under study''.

Speculation is that the tax will be applicable to freight operations, the carrier's new catering division - Steels Kitchens - and even aircraft parked on the tarmac, waiting to return to the territory.

Mr McCulloch said the carrier was also concerned about Canadian immigration policies which forced the airline to pay enormous fines for transporting bogus refugees to Canada.

He said it was ''extremely expensive and almost impossible'' to stop people from boarding flights at Kai Tak who, once airborne, ditched their passports to claim refugee status on arrival.


The company is held responsible for footing the bill for the immigration processing costs of each claimant.

In April, Cathay will celebrate its 10th anniversary of operations in Canada, posting healthy profits from an ''average of 70 to 75 per cent'' Hongkong-Vancouver passenger load capacities, Mr Barrington said.