Sunday, December 23, 2007

India-Hong Kong bilateral

India and Hong Kong signed today a new air bilateral treaty opening up flights between the two territories which the latter had been lobbying for nearly a decade. The main highlights of the new treaty are as follows:

i. 27 new weekly flights between the two territories.

ii. HKG based carriers can operate 10 additional flights to DEL, 6 additional to BOM and 11 new flights combined to BLR/CCU/MAA.

iii. Designated airlines of India can fly 14 times a week maximum combined between HKG and the U.S. West Coast with full 5th freedom traffic rights.

iv. HKG based carriers can fly to Europe (except UK) via India with full 5th freedom rights up to 14 times a week only.

Analysis :

If there was ever an award to given for the most patient airline, then Cathay Pacific would be a strong contender for that award. Since 2000, CX has been lobbying extensively to the Indian Govt to let them increase their presence in India with more online flights but it all fell to deaf ears. Midway, a break through was achieved and 4 weekly flights to DEL were allowed but CX wanted access to BLR, MAA and daily flights to BOM. Fearing that their market share would further erode, AI was not too keen to allow CX more penetration into the country. Now that CX is allowed to fly to India in a more liberal, wide spread manner, expect the following to take place by 2009 :

BOM - increased to 10 weekly i.e. 4 weekly HKG-BKK-BOM-DXB + 6 weekly nonstop flights to HKG. To compete aggressively against ANA and AI for high yielding business class traffic, CX should seriously contemplate launching a 6 weekly SAME PLANE SERVICE using a 2 class A 333 on the NRT-HKG-BOM-HKG-NRT route which has the new business class seat features on board.

This can be made possible in the following manner :

CX 521 Dep NRT 1700 Arr HKG 2050 A333
CX 000 Dep HKG 2230 Arr BOM 0200+1 A333

CX 000 Dep BOM 0530 Arr HKG 1430 A333
CX 508 Dep HKG 1610 Arr NRT 2125 A333

***These above mentioned flight timings allow excellent 2 hour connections in both directions with CX's YVR, LAX & SFO bound flights from HKG thus providing useful feeder traffic.

DEL - increased from 4 to daily initially and then possibly to 10 14 allowed.

BLR - daily flights will be launched with an A 333 / B 772 initially as CX is fully aware what form of high yielding feeder traffic BLR can supply via HKG to Japan, China, SFO & LAX.

MAA - 4 weekly nonstop flights max.

As far as the Indian side is concerned, one fully expects 9W and KF to use 7 frequencies each respectively to launch daily flights from BOM nonstop to HKG in the future using an A 332. However, one does not for see any Indian carrier utilizing the 5th freedom options available to them via HKG to SFO/LAX in the short term UNLESS 9W re-routes its proposed daily B 773ER flight from BOM-PVG-SFO to BOM-HKG-SFO!

9W & KF should also look at the possibility of flying nonstop daily from BLR to HKG using an A 332 because if either one can sign a SPA with CX out of HKG for onward flights to China, Japan, MNL, SGN and ICN, the route does have money making potential for it to exploit. As it is 9W has a small scale hub in BLR with flights to MAA, HYD, CCU, COK & TRV which can provide value able feeder traffic to HKG and beyond. If 9W does indeed opt to fly BOM-HKG-SFO and BLR-HKG nonstop, then it can send pax from SFO via HKG to both BLR & BOM!

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