"Hong Kong privatisation plan draws thumbs up at airlines"

Friday, August 8, 2003

Privatisation plan draws thumbs up at airlines
United Kingdom - The Standard


Airlines gave a mixed welcome to yesterday's announcement by newly installed
Financial Secretary Henry Tang, to partly privatise the Airport Authority.

Tang said the proposal would be put to the Legislative Council in the first
half of next year.

The most enthusiastic response came from Hong Kong Dragon Airlines
(Dragonair) chief executive Stanley Hui, who said: ``Speaking as one of the
biggest customers of Hong Kong International Airport, we wish the Airport
Authority every success in its part-privatisation plan.'' He said the scheme
``should help ensure we maintain a competitive position as an aviation
hub''.

Speaking after announcing its biggest-ever loss, Cathay Pacific Airways
chairman James Hughes-Hallett said the authority was the airline's closest
partner at Chek Lap Kok, adding: ``I am sure we will have input during the
process leading up to the initial public offering.'' Asked if Cathay would
buy shares in the organisation, Hughes Hallett said: ``Ask me again in two
years.'' Hughes-Hallett had just returned from Beijing where it is believed
he had talks about Swire Pacific's formation of an airport management joint
venture.

The Board of Airline Representatives (BAR), which represents more than 70
airlines operating at Chek Lap Kok, said it welcomed the government's
intention to consult all concerned parties. But it said the privatisation
``is not simply an issue for the aviation or tourism industry.

``It is a key issue concerning the future economic development of Hong Kong.
As such, effective consultation with all stakeholders ahead of the airport's
actual privatisation is vital for everyone in Hong Kong,'' it said.

Echoing the view of International Air Transport Authority head Giovanni
Bisignani this week, BAR said: ``A strong independent regulator must be in
place after privatisation to balance the needs of all stakeholders.'' The
Airport Authority welcomed the privatisation plan. ``Privatisation will
reinforce the authority's first class airport operation under market
discipline. The people of Hong Kong have entrusted us with this precious
asset and it is our responsibility to maximise its returns,'' chairman
Victor Fung said.

The government said a financial adviser would be appointed shortly to help
prepare the privatisation process, including the legal and regulatory
framework.

While the exact timetable for the IPO would depend on market conditions,
Tang said: ``Privatisation of the Airport Authority will be conducive to
maintaining and further developing Hong Kong International Airport as a
centre for international and regional aviation.''


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