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TRANSPORT

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package of proposals including the future regulatory mechanism for the privatised AA, and will consult stakeholders on the proposals.

Air Services

In 2003, the Air Transport Licensing Authority (ATLA) granted six licences: one to Cathay Pacific Airways Limited (CPA), two to Hong Kong Dragon Airlines Limited (HDA), one to AHK Air Hong Kong Limited (AHK), and two to CR Airways Limited (CRK). At year-end, CPA held nine licences to operate scheduled services to 133 destinations, HDA held 10 licences to operate scheduled services to 106 destinations, AHK held eight licences to operate scheduled services to 57 destinations, CRK held two licences to operate scheduled services to five destinations, and Helicopters Hong Kong Limited (HHK) held two licences to operate scheduled services to two destinations.

CPA commenced some major codeshare services with American Airlines to operate passenger services to 20 cities in the United States in January. The codeshare services were further extended to five more US cities later in the year. However, the outbreak of SARS in March triggered a world-wide reduction in demand for passenger air travel. CPA cut its scheduled passenger flights by almost 50 per cent. After the travel advisory notice concerning Hong Kong was lifted by the WHO in May, the market quickly recovered and CPA's scheduled passenger air services were restored to the pre- SARS level by September. CPA commenced scheduled all-cargo services to Osaka and passenger services to Beijing in September and December, respectively. The frequency of scheduled passenger air services to Auckland, Johannesburg, London, Melbourne, Rome and Sapporo was also increased from October. There had been a sustained growth in cargo carriage, which was not affected by the SARS outbreak. In October, CPA carried a record monthly tonnage of air cargo. In July, CPA took delivery of its third long-range Airbus A340-600 aircraft. The airline also took delivery of three Airbus A330-300 and two Boeing B777-300 aircraft in the last quarter of the year. By year-end, CPA operated scheduled services to 49 destinations world-wide.

HDA's services were also severely affected by the outbreak of SARS. Up to 64 per cent of its scheduled flights were cancelled before the lifting of the WHO's travel advisory notice. From July, visitors from designated cities in the Mainland were able to travel to Hong Kong under the Individual Visit Scheme. This had a stimulating effect on the demand for HDA's services between Hong Kong and the Mainland, which returned to pre-SARS levels in August. The airline also launched new scheduled passenger services to Bangkok in November and resumed its passenger air services to Harbin in December. Its air cargo shipment continued to grow robustly during the year. The airline took delivery of two Airbus A321-200 aircraft in September and October. At year-end, HDA operated scheduled services to a total of 30 destinations, including 19 cities in the Mainland.

In June, the Civil Aviation Department (CAD) issued a varied Air Operator's Certificate (AOC) to CRK for the operation of its first Bombardier CRJ-200 regional jet. CRK thus became the third Hong Kong-based carrier that can operate scheduled air services to the Mainland using fixed-wing aircraft.

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