CATAWBA AIR TRANSPORT: United States (1972-1991).

Established at Charlotte, North Carolina, in 1972 to provide daily round-trip air taxi flights to Wilkesboro via Hickory. Cessna lightplane revenue frequencies are duly inaugurated, but because of energy costs cannot be maintained beyond 1973.

Charter flights are, however, continued for the next 15 years and, in 1987, Catawba resumes a limited schedule of air taxi flights to Hickory. The company ceases operations in 1991.

CATHAY PACIFIC AIRWAYS (PTY.), LTD.: Swire House, 9 Connaught Road, Central Hong Kong, Hong Kong; Phone 852 7475000; Fax 852 845-2039; Http://www. cathaypacific. com; Http://www. cathay-usa. com; Code CX; Year Founded 1946. Having returned to the U. S. after V-J Day in September 1945, Roy Clinton Farrell, like many other ex-G. I. flyers, has dreams for his own air service. He joins with four other China National Aviation Corporation (CNAC-1) veterans, Millard Nasholds, Bob Russel, Bill Geddes-Brown, and Australian Sydney de Kantzow, to purchase a war-surplus Douglas C-47 for $30,000 from the War Liquidation Commission.

Christened Betsy, in December the plane acquires a cargo of toothbrushes and tuxedos and departs with it for China via Miami, Recife, Dakar, Karachi, Calcutta, Kunming, and Kweilin. The Betsy arrives at Shanghai on January 6, 1946, following a 26,000-mi., 26-day flight.

Farrell decides that the future lies in flying cargo from China to Australia and, on February 4, the Betsy ferries a load of freight down to Sydney via Hong Kong. Joined by de Kantzow, the American pilot forms the Roy Farrell Export-Import Company, Ltd. in Sydney on March 11 to legitimize the operation. Nonscheduled roundtrips between China and Australia continue.

Farrell and de Kantzow are forced by political unrest to flee the mainland to Hong Kong’s damaged Kai Tak airfield in May. There they hold a number of meetings with journalist colleagues to discuss future possibilities. It is decided to form a real Hong Kong-based air cargo concern. The group subscribes capital of HK$5 million, purchases a second Douglas transport (the Nikki), and formally incorporates its airline at Hong Kong on September 24. The registration fee is HK$1 for each aircraft.

Nonscheduled service is now extended to Manila, where, legend has it, the company’s name, Cathay Pacific Airways, is created by Farrell and several journalists at the bar of the Manila Hotel. The fleet is increased by the addition of 4 more war-surplus C-47s and several Consolidated PBY-5A Catalina flying boats.

One of the latter evacuates the Vietnamese emperor Bao Dai from Tourane, now Da Nang, at month’s end. In November, 2 Avro Ansons are acquired and employed to ferry fish from Hong Kong to Malaya and Burma.

On January 5, 1947, Farrell and de Kantzow open a new DC-3 route across the harbor to the new grass landing field at the racetrack at Macau. The inaugural flight is something of an embarrassment as the Douglas, on final approach, hits the retaining wall of a water reservoir, loses its landing gear, and must execute a belly landing. When the dust settles, the pilots step out onto a red carpet which leads to a reviewing stand where dignitaries are waiting to give speeches before a large crowd.

It is thereafter decided to operate what will prove to be a profitable “gold run,” twice-daily Catalina Hong Kong to Macau service. Additional frequencies are available on demand.

With support and equipment from British Overseas Airways Corporation (BOAC), Hong Kong Airways (Pty.), Ltd. is set up on October 22 to feed traffic coming out of China to the British flag carrier at the crown colony’s airport. Another purpose is to regain commerce lost to Pan American Airways (PAA) via its subsidiary China National Airways Corporation (CNAC-1). Outfitted with Douglas DC-3s from BOAC, HKA inaugurates twice-daily service to Shanghai on December 2.

Twice-daily frequencies are initiated by HKA on January 10, 1948 between Hong Kong and Canton. While on a fish flight, a Cathay Avro Anson crashes in Burma on February 9. Meanwhile, the new HKA route proves so rewarding that it is doubled to four times per day on March 22. Later in the spring, HKA begins flights to Manila and a spirited competition is undertaken with Cathay.

On July 1, the 3 Cathay flying boats are transferred, for financial reasons, to a subsidiary, the Macao Air Transport Company, Ltd.

Ten minutes out en route from Macao to Hong Kong on July 16, a four-man robbery team seizes the company’s Consolidated PBY-5A Miss Macao, with 3 crew and 26 passengers, killing pilot Dale Cramer and his copilot. Their bodies jam the controls forcing the aircraft to crash in the Pearl River estuary 10 mi. NE of the twin-engine aircraft’s point of origin. The lone survivor of the wreck is one of the pirates, who survives long enough to tell the story of what has been labeled the first nonpolitical skyjacking (actually, it is second after the 1932 Panair do Brazil, S. A. incident) and the first crash during an airline hijacking. The scheduled Macao to Hong Kong service is suspended.

Later, with considerably less fanfare, new DC-3 services begin to Singapore and Bangkok. Late in the summer, Hong Kong’s British administration enacts legislation requiring local financial participation in foreign-owned companies based in the Crown Colony. Cathay’s owners are notified that, unless their interest is reduced to just 10%, the airline’s landing rights will be cancelled.

On October 18, Australian National Airlines (Pty.), Ltd. and the old

And established Hong Kong-based hong, or trading house, Butterfield and Swire, Ltd., acquire 80% shareholding and the 6 DC-3s and 3 PBYs, leaving Farrell (operating as Cathay Holdings) and de Kantzow with 10% shareholding each. John K. Swire is named chairman. Cathay Pacific Airways (Pty.), Ltd. is formally registered the same day, with nominal capital of HK$10 million.

To handle the airline’s logistics and repairs, Cathay’s owners establish the Pacific Maintenance and Supply Company (Pty.), Ltd. (PAMAS) on November 4.

A DC-3, coming into Hong Kong from Manila on February 24, 1949 with 23 aboard, crashes while attempting to land and burns; there are no survivors.

On May 13, the Hong Kong government, acting on orders from the Colonial Office in London, divides the routes emanating out of Hong Kong between HKA and Cathay. The BOAC-supported company receives all of those to the north, except Manila, which it must share with Cathay.

Cathay places its first DC-4 into service on September 23, joining the 5 remaining DC-3s in the fleet. The four-engine Douglas transport is employed to inaugurate services to Saigon on November 2 and to Hanoi and Haiphong on November 12.

When the forces of Mao Tse-tung take power in China, they order all Chinese contact with the West be severed, including HKA services. As a result, BOAC, on November 30, sells its stake to Jardine, Matheson. The new owners sell the Douglas transports and consider new services.

By January 1950, Hong Kong Airways (Pty.), Ltd., which had once aspired to a large area of operation, is reduced to a single route to and from Taipei, Formosa, with a Curtiss C-46 Commando leased from The Flying Tiger Line and a DC-4 chartered from Northwest Airlines. This service is the company’s entire business for the next five years. Cathay, on January 5, initiates frequencies to Sandakan, Labuan, and Jesselton in British North Borneo. Rangoon and Calcutta also become DC-4 stops during the first quarter. In April, shareholder de Kantzow reduces his stake to just 5%; Cathay Holdings retains 10%, with Swire and ANA owning the rest.

Economics dictate that HKA seek avenues of cooperation with its former rival. On November 23, it merges its own Jardine Aircraft Maintenance Company (Pty.), Ltd. with PAMAS to form Hong Kong Aircraft Engineering Company (Pty.), Ltd. (HAECO), which becomes one of the world’s best known aviation support organizations during the next halfcentury.

Late in the year, Cathay founder Farrell sells his interest and returns to the U. S. Meanwhile, the airline acquires another DC-4.

In April 1951, cofounder de Kantzow departs to his Australian home, even as the four-engine Douglas opens a route to Singapore via Saigon. Shareholding is again rearranged. The Butterfield and Swire interest is placed in control (66%), ANA’s percentage drops dramatically (to 14%), and the Peninsular & Oriental Steam Navigation Co. becomes the chief minority shareholder (30%).

Service continues apace in 1952 and, on May 23, 1953, the Manila route is extended to Labuan and North Borneo while new services are started westward to Bangkok, Rangoon, and Calcutta.

As the First Indochina War reaches a conclusion in early 1954, Cathay finds it increasingly difficult to conduct its operations. In April, the company suspends flights to Haiphong and Hanoi. The Geneva accords take effect on July 21, dividing North and South Vietnam; political and military tensions in the area are high.

Mistaken for a Nationalist Chinese aircraft, the leased DC-4 piloted by Capt. Cedric Carlton and with 18 aboard, while en route from Bangkok to Hong Kong, is shot by Red Chinese MIG-15s on July 23, and forced to ditch in the South China Sea off Hainan Island (2 dead). A Grumman Albatross from Clarke AFB at Manila rescues seven people and eight are still missing when the U. S. rescue operation is broken off due to its proximity to the Chinese mainland.

A week later, Peking radio admits the attack was a mistake and offers compensation to victims or their families. DC-4 services are now suspended until August 12 when a replacement aircraft, leased from Canadian Pacific Air Lines, Ltd. (CPAL), becomes available. During the stand-down, it is announced that flights to North Borneo will be suspended.

In October, longtime competitor Hong Kong Airways (Pty.), Ltd. orders a pair of Vickers Viscount 760Ds, while its Curtiss lease with The Flying Tiger Line ends in November. Meanwhile, receipt of ?367,000 compensation for the July tragedy is announced in the British House of Commons on November 3. A DC-6 is purchased from Pan American-Grace Airways (PANAGRA) on December 30 and a route is opened to Kuala Lumpur.

In January 1955, BOAC reenters the local picture, taking back the stake in Hong Kong Airways (Pty.), Ltd. it had sold six years earlier. In the interim, while awaiting delivery of the Viscounts, an effort is made by the British company to revitalize HKA and expand its services with leased aircraft.

The PANAGRA DC-6 purchased by Cathay arrives in April. The signal event of the year for Cathay, not recognized at the time, is the sale out of service to Australia of the carrier’s first plane, the DC-3 Betsy.

When the Borneo Company, Ltd. purchases a 4% stake in the Swire airline in 1956, flights to North Borneo, suspended in 1954, are resumed.

The HKA Viscounts arrive in January 1957 and enter service on February 25 between Hong Kong and Seoul, South Korea. The turboprops expand HKA business in March when they begin flying to Manila, following up with services in April to Taipei and in May to Tokyo. Strong, but unprofitable, competition now resumes with Cathay Pacific.

Cathay, meanwhile, is not standing still. New services are inaugurated during the spring and summer to Phnom Penh in Cambodia, Vientiane in Laos, Kuching in Sarawak, and Kuala Lumpur, Malaysia. Orders are placed in September for 2 Lockheed L-188s. Cofounder Sydney de Kantzow is killed in an automobile accident on November 21.

Taking a new approach, Cathay receives a HK$6.75 million DC-6B on June 22, 1958; it is the first airliner purchased new by the carrier, as well as its first pressurized aircraft. Eighteen months into the fiscal bloodletting, BOAC, acting on behalf of HKA, and Cathay officials agree to rationalize the situation by combining forces. Cathay Pacific Holdings (Pty.), Ltd. is established in December for the purpose of organizing a merger of the two airlines.

Management of HKA passes to Cathay Pacific on February 1, 1959. Cathay becomes the first East Asian turboprop operator as its initial Lockheed L-188A is delivered on April 1 and begins service on the Manila-Bangkok-Singapore route on April 24.

Assimilation of HKA, already begun, is formally announced on June 8; the process is completed on July 1. Cathay Pacific Holdings (Pty.), Ltd. formally receives Hong Kong Airways (Pty.), Ltd. from BOAC Associated Companies on July 1 with shareholding divided three ways: Butterfield and Swire (73%), BOAC (15%), and Ansett-ANA, Ltd. (12%). HKA’s 2 760Ds are sold to Malayan Airways, Ltd.

The second L-188A now arrives and begins operations on routes to Saigon, Kuala Lumpur, Darwin, and Sydney on July 25. The same day, service to Seoul is ended.

Service to Labuan is dropped in mid-February 1960, while flights to Brunei commence on February 25. Twice-weekly DC-6B flights are inaugurated on April 1 over routes to Taipei and Kyoto and to Osaka and Tokyo; the frequency to Osaka is the first international service to Japan’s second-largest city. Service to Vientiane is suspended as civil war flares.

As the result of structural concerns raised by a series of L-188 crashes in the U. S., the company’s 2 Electras are withdrawn from service on December 4 for modifications. On December 12, a Bristol Britannia 102, leased from British Overseas Airways Corporation (BOAC), replaces them in service. The market at Kuching is abandoned on December 15; however, flights to Seoul are restarted. Enplanements reach 100,000.

The Electras return to service on February 4, 1961. As the result of a generous financial incentive from General Dynamics, orders are placed for Convair CV-880-22M jetliners. At the same time, the last DC-3 is sold. Routes are extended to Jakarta and Jesselton (now Kota Kinabalu) on September 7, but, as a result of poor loads, flights to Sydney are halted.

The first CV-880-22M is delivered on February 20, 1962, and enters service on the Tokyo run via Manila, Bangkok, Singapore, and Taipei, on April 8. The flight marks the company’s first jetliner service. The fleet now comprises 1 DC-4, 1 DC-6, 2 L-188As, 1 Convair CV-880-22M, and 2 Viscount 820s.

On January 9, 1963, a pooled-service agreement is signed with Thai Airways International, Ltd. (THAI) and Malayan Airways, Ltd.

Cathay holds a 32% stake, with the THAI stake pegged at 30% and Malaya’s at 28%. All fleet units, except for the Convair and 2 Lock-heeds, are retired and service to Kuala Lumpur is suspended.

Due to decreasing traffic, the Rangoon office is closed in July 1964 and the last flight to that point, following the end of U. K.-Burmese negotiations, is made in late August. Nineteen years of service is thus ended. Meanwhile, the company’s flight kitchen at Kai Tak Airport is expanded. It now prepares over 11,000 meals per month for Cathay, plus meals for Malaysian Airways, Ltd., Philippine Airlines, and Thai Airways International, Ltd. In September, H. J. C. Browne succeeds the retiring W. C. G. Knowles as chairman. A second Convair CV-880-22M enters service on November 15, replacing one L-188A.

Enplanements increase 14% as the one-millionth passenger (cumulative) is boarded in mid-November.

Airline employment in 1965 stands at 958. CV-880-22M services to Osaka and Tokyo begin on February 15. The Japanese city of Fukuoka joins the route map on September 2 and the Vientiane route (operated briefly in 1960) is reopened during the month. In late fall, following the opening of the new Subang International Airport, services are restarted to Kuala Lumpur after a two-year hiatus. At year’s end, a third CV-880-22M is received and undergoes acceptance checks. Enplanements grow to 227,891.

The third CV-880-22M joins the fleet in early January 1966, allowing the Japan frequency to be increased to 10 times per week on January 10 and giving Nagoya its first international jet service. Orders are placed for 2 additional CV-880-22Ms.

A total of 297,000 passengers are flown on the year.

The last L-188A is retired in 1967 as the fourth CV-880-M enters service during the summer; simultaneously, service is withdrawn from Brunei. Flights to Okinawa commence on October 1.

While taking off from Hong Kong on a November 5 service to Saigon, Flight 30, a CV-880M with 11 crew and 116 passengers, suffers a severe vibration. The crew attempts to abort the takeoff, but the jetliner overshoots the runway and crashes into Kowloon Bay (Hong Kong Harbor), where it breaks into three parts (one dead).

Passenger boardings for the year increase to 313,423.

Airline employment in 1968 is 1,381. A fifth CV-880-22M enters service on Southeast Asian routes and, in something of a surprise, the company purchases majority control of Bahamas Airways, Ltd. in October. In 1969, orders are placed for 2 Boeing 707-367Bs as 2 more CV-880-22Ms join the fleet. Service is withdrawn from Phnom Penh and Calcutta.

The work force totals 2,082 and enplanements reach 490,230.

On April 1, 1970, CV-880-22M thrice-weekly services are inaugurated to Perth via Kuala Lumpur, linking Western Australia with Hong Kong, Tokyo, Osaka, and Taipei. Hong Kong to Singapore and Bangkok jet service begins on December 1.

Freight traffic is up 7% and passenger boardings jump 16% to 583,607.

The workforce rises 6% in 1971 to 2,215. The corporate structure is revised again on April 14 when the Hong Kong and Shanghai Banking Corporation purchases a 25% stake for HK$21 million. Swire Butterfield and Swire, through its China Navigation Company subsidiary, Ansett Transport Industries, and BOAC hold the remaining shares. On June 15, Swire severs the Australian connection begun by Sydney de Kantzow when it purchases Ansett’s 12% stake. On July 2, two IBM reservations computers, known as CPARS, come on line.

A deal is now struck with Northwest Airlines in the U. S. for the purchase of a number of Boeing 707-351B Stratoliners fitted with wide-body interiors and B-707-351Cs. The first of 2 B-707-351Bs to be received on the year enters service on August 24 and begins flying to Denpasar, Bali, on September 17. Within a month, Jakarta must, by an Indonesian government order instigated by Garuda Indonesian Airways, be made a stop on the Bali route. The second B-707-351B arrives on December 27.

Bookings for the year are 573,498.

The second B-707-351B begins flying on company revenue routes in March 1972; two CV-880-22Ms are sold during March and April.

Flight 700Z, a CV-880-22M en route from Singapore via Bangkok to Hong Kong with 10 crew and 71 passengers, crashes into the mountains in the Central Highlands of South Vietnam near Pleiku, on June 15; there are no survivors from the suspected bombing.

It is reported on July 1 that a bomb has definitely caused the Flight 700Z disaster when it exploded on the plane’s right side near the wing. Services to Kagoshima, Japan, commence on August 17 and the third former Northwest Airlines B-707-351B arrives on August 28.

A Thai police lieutenant, S. Chaiyasut, is arrested on August 31 for the fatal June bomb. His motive was to collect $225,000 from insurance policies on his daughter and fiancee, who were passengers on the ill-fated flight and in whose luggage the device was placed. The following spring he will be charged with premeditated murder, but later acquitted by a Thai court on because of insufficient evidence.

The fourth B-707-351B is delivered on November 18. Also in November, the company enters into a pool agreement with British

Caledonian Airways, Ltd. (BCAL) to provide low-fare service from London to Perth via Singapore or Jakarta.

Passenger traffic accelerates 27.68% to 793,000 while freight skyrockets 78.6%.

Airline employment stands at 2,791 in 1973. Following a six-year suspension, service is resumed via Kota Kinabalu to Brunei on January 27. New in-flight amenities are now introduced, including new interior designs by Walter Dorwin Teague Associates. The five-millionth passenger (cumulative) is transported on March 14.

The largest order in Hong Kong trading history to date is made on July 3 when HK$120 million in requests are placed with Northwest Airlines for 4 additional Stratoliners. A B-707-351C joins the fleet on August 6 as 3 CV-880-22Ms are retired. Bankrupt Bahamas Airways, Ltd. is shut down in late summer.

The year’s customer boardings soar 33% to 1,054,690, the first time in which the annual passenger count surpasses a million. Cargo traffic is up a spectacular 64.9%.

The employee population grows to 2,952 in 1974; new flight attendant uniforms are introduced and the 4 former Northwest Airlines B-707-351Cs are added. On January 1, the airline is appointed general sales agent for the Peninsula Hotel Group and receives shareholding. It also establishes Peninsula Overseas Management, Ltd. to develop and manage hotels in the Far East, including Singapore’s Marco Polo, which opens in February.

The next day, Butterfield & Swire is reformed into John Swire & Sons (Pty.), Ltd.

On March 14, orders are placed for 2 Lockheed L-1011 TriStar 100s. As Hong Kong and Japan engage in new bilateral negotiations during the month, the Japanese restrict Cathay access to Osaka. In retaliation, Japan Air Lines Company, Ltd. (2) (JAL) is forced to drop Hong Kong from its Tokyo to Sydney service. Two more B-707-351Cs join the fleet as another CV-880-22M is sold.

In pool with British Airways, Ltd. (2) and Qantas Airways (Pty.), Ltd., the only nonstop service both ways is added from Hong Kong to Sydney.

Following the collapse of Court Line Aviation, Ltd. on August 15, Cathay is able to purchase that carrier’s 2 L-1011 TriStar 1s, Halcyon Days and Halcyon Breeze.

On September 15, JAL is prohibited from Hong Kong altogether. This action has a positive impact on bilateral discussions between Tokyo and Hong Kong and a new agreement is shortly thereafter signed, allowing reciprocal services by the flag carriers of each to resume on November 1.

Cargo soars 29.7% while passenger bookings advance 13.7% to 1,215,000.

A total of 280 flight attendants are added in 1975 as the payroll grows to 3,334. The company closes its Saigon office on April 25 and terminates weekly flights between that city and Hong Kong. The first carrier to acquire the extended-range TriStar, Cathay Pacific takes delivery of its first L-1011-100 on August 8, and a second shortly thereafter. On September 15, the two are placed in service on routes connecting Hong Kong with Taipei, Tokyo, Manila, Singapore, and Jakarta.

The last 2 CV-880-22Ms are now retired and, together with 5 withdrawn earlier, are sold to Miami-based International Air Leases. Following increases and reorganization of share capital since 1970, the carrier’s parent, Cathay Holdings (Pty.), Ltd. in May holds 60% of the issued capital. Cathay Holdings (Pty.), Ltd. is made up of Swire Pacific, Ltd., the new name for combined China Navigation Company and John Swire & Sons (Pty.), Ltd. and Peninsular & Oriental Steam Navigation Co., Ltd. Other shareholders include the Hong Kong and Shanghai Banking Corporation, Ltd. (25%) and British Airways Associated Companies, Ltd. (15%).

Freight traffic this year jumps 22% and passenger boardings move ahead 18% to 1,429,000.

Employment rises 1% in 1976 to 3,363. On February 10, Flight Operations Director Capt. Bernard Smith admits that he had taken a US$10,000 bribe from Lockheed back in 1973-1974 to promote the carrier’s choice of the TriStar; he resigns.

B-707-351C freight service is started from Hong Kong to Seoul, Singapore, and Bangkok in July. In September, a third L-1011-100 enters service. Routes are extended thrice weekly to Bahrain on November 16 and twice weekly to Melbourne in December.

Freight swells 38% and passenger boardings in this thirtieth anniversary year rise 14.4% to 1,622,000.

Penang is added as a stop on the Singapore route on April 3, 1977, bringing to 18 the airline’s total number of destinations. Daily nonstop return flights commence on November 1 to Osaka and Tokyo, bringing the number of weekly services between Hong Kong and Japan to 41. The two Lockheed units acquired from failed Court Line, Ltd. join the fleet and enplanements are up to 1,789,575.

Airline employment at Managing Director D. R. Y. Bremridge’s carrier totals 3,500 in 1978. The fleet now comprises 5 TriStar 100s and 9 B-707-351Bs/Cs. Daily return service to Jakarta via Singapore begins on April 1. Frequencies to Australia are now 17 per week with 18 round-trips flown each week to Manila.

Needed to expand capacity on the route to London, B-747-267Bs are ordered in October. TriStar flights to Kaohsiung, Formosa, and Nagoya commence on November 1 while B-707-351B roundtrips commence to Port Moresby on November 3. The 22nd weekly service to Bangkok is started on December 18.

An order is placed in 1979 for 1 additional L-1011 while 2 B-707-351Cs are sold. A bilateral air services agreement is signed between Hong Kong and the People’s Republic of China, opening the possibility of services to mainland China. The first B-747-267B is delivered on July 20 and in late August it begins operations from Hong Kong to Melbourne and Sydney and north to Seoul via Taipei and Tokyo. Darwin now disappears from the company’s route map.

Capacity on existing routes is increased through the use of TriStars in preference to B-707s and the average passenger trip length is 1,270 miles. The Hong Kong Air Transport Licensing Board (ATLB) in November approves the company’s application to begin long-desired services to London.

Freight traffic this year moves ahead by 18.1% while passenger traffic increases 13.6% to 2.6 million passengers flown.

The workforce is increased during 1980 by 7.9% to 5,549. On January 1, D. R. Y. Bluck assumes the airline’s chairmanship. The British Airways, Ltd. (2), ex-BOAC, 15% interest is bought out and the shareholding realigned; Cathay Holdings, the Swire parent group, now holds 50.59% with the remaining 29.41% taken by the Hong Kong and Shanghai Banking Corporation (HK&SBC). For the first time since its founding, the airline is completely owned by Hong Kong interests.

Almost 30 years after retiring from China, flights to the People’s Republic commence on February 1 with a service to Shanghai. Three additional B-747-267Bs are received on April 24, July 16, and December 19, respectively, and 3 more B-707-351Cs are sold.

Following the receipt of London route authority on June 17, thrice-weekly B-747-267B service is inaugurated to Gatwick Airport at the U. K. capital on July 16 via Bahrain and Dubai. During the fall, Cathay Capt. Martin Willing discovers the carrier’s first aircraft, the DC-3 Betsy, in Australia and arranges for Swire Group to purchase her back.

Largely as a result of the new U. K. frequency, passenger boardings grow 9.5% to 2,879,683 while cargo leaps 17.4% to 229.77 million FTKs.

Airline employment grows by 4.4% in 1981 to 5,795. A fifth B-747-267B joins the fleet on June 25 and another is ordered; one L-1011-100 is sold. A passenger route is opened to Abu Dhabi and the multistop London frequency becomes daily on July 1. In cooperation with Deutsche Lufthansa, A. G., joint Hong Kong-Frankfurt freight service is introduced on October 1 with a German B-747F. A new computerized reservations system is placed into operation.

Freight soars 28.8% to 295.92 million FTKs and passenger bookings jump 10.9% to 3,192,245.

The workforce is increased 1.7% in 1982 to 5,895. After a 12-year suspension, service to India resumes on January 2 when Bombay is added as a stop on the company’s route to the Mideast.

The last remaining B-707-351Cs are sold as a new B-747-267B is acquired, together with a B-747-267C, the former British Trader, from British Airways, Ltd. (2). As Hong Kong Trader, the latter begins twice-weekly cargo flights, in cooperation with Deutsche Lufthansa, A. G., to destinations in Europe, including Frankfurt via the Middle East and thrice-weekly operations to Tokyo. The freighter assists the airline in increasing by 18% its annual mail and cargo revenues.

Passenger service is also inaugurated to Brisbane on August 1, simultaneously becoming nonstop to Perth. In cooperation with Air New Zealand, Ltd. and Air Niugini (Pty.), Ltd., flights commence to Auckland via Port Moresby the same day. The partnership requires that every three months each company takes a turn flying the service. The average passenger trip length is now 1,725 miles and the entire route network covers 56,535 unduplicated miles. The last B-707-351C departs Hong Kong on November 12.

Freight traffic skyrockets 59.6% to 472.2 million FTKs while passenger traffic is up 7.3% to 3,425,404 passengers carried.

The employee population is 5,987 in 1983, up 1.6%. A ninth B-767-267B is acquired on May 23 and immediately takes over the new Hong Kong to Vancouver nonstop route begun at the beginning of the month. The trip requires 11 hrs. 15 min. to Canada and 13 hrs. 15 min. back. Simultaneously, the company takes over the Auckland service from Air New Zealand, Ltd., flying via Port Moresby.

Beginning on July 2, the first nonstop London to Hong Kong service (taking 12 hrs. 30 min.) is offered once every week. It will take a year to reengine with Rolls Royce RB211 power plants sufficient to provide nonstop outward bound service. An order is placed for a B-747-367 with an option taken on another.

The company’s first aircraft, the Betsy, restored by HAECO and repainted in her original 1947 livery, makes her final flight, across Hong Kong harbor, on September 24. Thereafter she is donated to the Hong Kong Science Museum at Tsimshatsui East to which she is taken, disassembled, by barge across Kowloon Bay and put back together on static display.

Longtime company pilot Capt. Charles E. Eather now publishes a book of recollections and history, Syd 's Pirates: A Story of an Airline (Sydney: Durnmount, 1983). The work will be followed in 1993 by a second, We Flew in Burma: A Story of Flying in Burma, with Cathay Pacific Airways and Union of Burma Airways (Surfer’s Paradise, Queensland: Ching Chic Publishers, 1993).

Freight continues to expand, up by 20.1% to 566.93 million FTKs, but passenger boardings hold level.

Airline employment rises 6.9% in 1984 to 6,400 and the fleet now includes 9 B-747-267Bs, 9 B-747-267Cs, and 9 L-1011-100s. On January 1, Peter D. A. Sutch becomes managing director, succeeding Duncan Bluck. Thirty days later, B-747-267B service is inaugurated from Hong Kong to the Saudi city of Dhahran. Also during the month, the company receives the 1983 “Passenger Service Award” from Air Transport World magazine.

Passenger flights to Frankfurt commence on March 3. The last B-747-267B is delivered on April 27 and is employed, beginning on May 5, to fly nonstop from Hong Kong to London on 13 hr. 15 min. passages.

Customer bookings accelerate 10.1% to 3,550,000 and freight increases 17.8% to 668.03 million FTKs.

The employee population is increased 9.4% in 1985 to 7,043. In April, thrice-weekly L-1011 service is initiated to Shanghai and to Vancouver. The first B-747-367 is delivered on June 13 after a 14-hour delivery flight from Seattle via Vancouver and twice-weekly service begins to Amsterdam via Frankfurt in October.

In cooperation with Air New Zealand, Ltd., Cathay begins direct, weekly B-747-267B flights from Hong Kong to Auckland on December 3. The United Kingdom and Peoples Republic of China sign a Basic Law agreement returning Hong Kong to China in 1997; Annex Four of the document specifically guarantees that Cathay and Dragonair (Pty.), Ltd. will be able to operate beyond the turnback.

Passenger enplanements rise 8.5% to 3,850,000 and cargo accelerates 10.8% to 739.94 million FTKs; in terms of freight traffic, Cathay Pacific now stands 15th among all of the world’s airlines. A net HK$115.2-million profit is reported.

A second B-747-367 arrives on February 14, 1986 and is deployed on the Hong Kong to London and Frankfurt route. When a two-year CAAC (General Administration of Civil Aviation of China)/British Airways, Ltd. (2) agreement for weekly joint service from Hong Kong to Beijing ends at the end of March, Cathay remains as the only British-registered airline on the route.

The carrier is now listed on the Hong Kong Stock Exchange and, in a partial privatization move, the 7,000-employee airline in April places 397 million shares (15% of total) up for sale, bringing to 22.5% the total offering since the first of the year. The offering is a huge success and is oversubscribed 55 times, bringing in $6.5 billion U. S., and shattering all local records to become the largest stock distribution in the history of the Hong Kong Stock Exchange.

The same month, an L-1011 route is opened to Beijing while a second weekly B-747-267B service begins to Paris and Rome, with two more London frequencies added, bringing the total flown to the British capital to 10 per week. Flights to Amsterdam start in May.

A legal battle is enjoined against the new entrant Dragonair (Pty.), Ltd. In June, 2 B-747-467s powered by Rolls Royce RB211-524G engines are ordered and in July five-times-per-week B-747-267B service is launched to San Francisco via Vancouver.

During late summer, a fifth B-747-367B is ordered and the carrier joins United Airline’s Mileage Plus frequent flyer program. A second B-747-367 is delivered on October 10 and on October 31 it begins twice-weekly service to Amsterdam as an extension of the nonstop Hong Kong-Frankfurt route.

In November, two airlines and a number of employees from the subsidiary Swire Air Caterers, Ltd. (SACL) are arrested on corruption charges. On December 4 and in cooperation with Air New Zealand, Ltd., weekly joint service, halted for a year, is restarted Hong Kong-Auckland with Cathay Pacific Jumbojets.

As a result of the November scandal, Deputy Managing director Patrick Tsai now also becomes acting director of SACL.

Customer bookings jump 9% to 4,198,000 and a 15.9% boost is seen in freight traffic, to 857.28 million FTKs. Profits are HK$206 million (operating) and HK$190 million (net).

The workforce is increased by 12.1% in 1987 to 8,581 and the fleet is improved by the addition of a 10th L-1011,2 B-747-367s, and 1 B-747-267CF. Orders remain outstanding for 2 more L-1011s, 1 B-747-367B, and 2 B-747-467Bs.

In January, over 30 changes are made at middle and senior management levels. Simultaneously, the Peoples’ Republic of China purchases a 12.5%, HK$1.94-billion interest through its China International Trust & Investment Corporation (CITIC). Holdings of the Swire Group are reduced to just over 50%, while the HK&SBC holds the remaining 16%.

Also during the first month of the year, the carrier is named 1986 “Airline of the Year” by Air Transport World magazine.

Existing B-747-367B routes to Frankfurt, Paris, and Rome are cancelled in August in favor of a new schedule, which has service to Paris routed via Frankfurt while Rome becomes a turnaround destination routed via Dhahran.

By September, the average passenger trip length is 2,230 miles. Twice-weekly L-1011 frequencies are initiated from Hong Kong to Kaohsiung, Taiwan, in October, along with a new, daily TriStar turnaround service from Hong Kong to Taipei. In December, the carrier joins with Thai Airways International, Ltd. and Singapore Airlines, Ltd. to develop a computerized reservations system to be called ABACUS. It also purchases 2 TriStars from Air Lanka, Ltd.

Passenger boardings accelerate 21.2% to 5,085,825 while cargo climbs 25.2% to 1.03 billion FTKs and makes Cathay the fourth largest Asian freighter. Revenues increase by 29.2% to $1.5 billion as predictable fuel prices and helpful currency movements keep operating costs down. Operating income ascends to HK$376.8 million and net profit to HK$330 million.

The payroll grows again in 1988 by 18.2% to 10,142 and the route system now covers 96,861 unduplicated miles. Cathay operates two of the world’s longest routes from Hong Kong—7,225 miles to London and 6,632 miles to Vancouver.

Beginning in January, the company offers it’s first-class and business-class passengers a personal mobile telephone for a nominal fee plus charges when they visit Hong Kong. During the month, Cathay receives Air Transport World magazine’s 1987 “Airline of the Year” award.

A 50% interest is taken during February in Cathay Performa Consulting (Pty.), Ltd.

Marco Polo business-class service is unveiled and, in April, a fourth daily L-1011 service is added from Hong Kong to Bangkok.

Workers unloading an Air New Zealand, Ltd. B-747-219B that had flown to Auckland under the joint pact with Cathay on April 27, are unable to find NZ$300,000 (US$181,000) shipped in the diplomatic locker of a service container. The Hang Seng Bank of Hong Kong and the Bank of New Zealand file suit against the two airlines seeking restitution.

Twice-weekly B-747-267B service from Hong Kong and Zurich via Frankfurt is begun on June 1. The same month, Deputy Chairman D. A. Gledhill becomes chairman of Cathay Pacific, as well as other companies in the Swire Pacific group; Peter Sutch remains managing director. Later in the month, a 50% interest is acquired in Abacus Distribution Systems (Pty.), Ltd.

Two more Lockheed L-1011s are acquired in August, both from Eastern Air Lines. The B-747-467B order is increased to five and, in cooperation with Air New Zealand, Ltd., frequencies on the Hong Kong to Auckland return service is increased in December from one weekly service to two. During the year, an ab initio program is started to recruit Hong Kong Chinese as pilots; successful applicants are sent to the British Aerospace Flying College in Prestwick, Scotland.

Customer bookings zoom upward 21.6% to 6,193,000 and cargo climbs 18.9% to 1.17 billion FTKs. Revenues jump 29% to HK$1.9 billion and net profit swells to HK$363.3 million.

The number of employees swells 15.6% in 1989 to 11,728 and the fleet this year comes to include 2 B-747-467Bs, 6 B-747-367Bs, 8 B-747-267Bs, 2 B-747Fs, and 17 L-1011s. Orders remain outstanding for 2 B-747-467Fs and 10 Airbus Industrie A330-300s. In January, improved Marco Polo business-class service is introduced and six more flights are initiated from Hong Kong to Brisbane, Melbourne, and Sydney. Later in the month, 49% shareholding is taken in Metro Travel (Pty.), Ltd.

In February a fifth weekly roundtrip is inaugurated, in cooperation with Malaysian Airlines, Ltd. (MAS), between Hong Kong and Kuala Lumpur; simultaneously, a nonsmoking flight is offered between Hong Kong and Taipei. Late in the month, the airline switches from the frequent flyer program of American Airlines to that of United Airlines.

In March, a third daily service is added from Hong Kong to Manila and, also in cooperation with Malaysian, a third joint weekly flight begins to Kota Kinabalu in April. Also in April, the 2 B-747-467Bs are delivered; Cathay is the second airline after Northwest Airlines to take delivery of the long-range Jumbojet and the first to accept such a plane powered by Rolls Royce engines. CityCheck, Hong Kong’s first full-service downtown check-in center, is opened in May.

On June 1, service to Seoul is increased from twice daily to 10 times per week; these are followed on July 1 by the initiation of a second daily nonstop to London and a fourth roundtrip service to Paris. At the same time, smoking is banned on all turnaround flights from Hong Kong to Taipei, Kaohsiung, Bangkok, and Manila. In August, the airline launches Cathay Paciic Express, a new small package express and cargo airport-to-airport service between Hong Kong and the U. K.

For the summer season in Australia beginning in September, the airline lays on over 150 additional frequencies. Two regular supplementary B-747 services are initiated weekly between Hong Kong, Melbourne, and Brisbane, including the company’s first ever nonstop from Brisbane back to Hong Kong. Additionally, 24 Jumbojet roundtrips are provided from Hong Kong to Sydney for a 4-month period. A number of these flights are made on behalf of Qantas Airways (Pty.), Ltd. and Australian Airlines (Pty.), Ltd., whose pilots are on strike.

On October 28 and in cooperation with Air Mauritius, Ltd., joint weekly nonstop service is introduced between Hong Kong and Mauritius. Twice-weekly roundtrip flights between Hong Kong and Manchester, England via Frankfurt commence on October 31. Earlier in October, check-in-by-telephone service is introduced for passengers departing Hong Kong with only cabin baggage and the operational base at Paris (ORY) is transferred to Terminal One at Charles De Gaulle International Airport.

The contract with its local rival calls for the pioneer to provide management, administrative, and technical services. In cooperation with Air Niugini (Pty.), Ltd. and employing its A310-324, joint weekly nonstop and roundtrip service is initiated between Port Moresby and Hong Kong on November 3. Employing an Air New Zealand, Ltd. B-747-219B, joint service is inaugurated with the New Zealand flag carrier, also in November, over a third weekly route from Auckland to Hong Kong.

In December, service is increased from Hong Kong to Brisbane, Melbourne, Sydney, and Perth for the Australia and Asia summer season. The Swire Group acquires a 30% share in Dragonair (Pty.), Ltd. during the month, ending forever any possibility that the new entrant will emerge as a competitor.

Passenger boardings jump 14.5% to 7,057,000 and freight is up 8.7% to 1.32 billion FTKs. Revenues surge ahead by 14.4% to HK$2.21 billion, expenses are up 13.2% to HK$1.72 billion, and operating income moves ahead to HK$504.7 million. Net gain balloons to HK$425.8 million.

Company employment grows another 8.8% in 1990 to 12,764. In January, longtime Vice President Jerry Penwarden is seconded to Dragonair (Pty.), Ltd. as its day-to-day manager under a 15-year management contract. An additional 5% stake in Dragonair is acquired on February 1 and the total arrangement is valued at $125 million, of which a third is tied up in Dragonair’s 4 B-737-200s. Hong Kong-based CITIC, with backing from China, increases its share in Dragonair to 38%.

The company’s ground staff and cabin crews begin, also in February, to introduce new uniforms designed by Nina Ricci of Paris. The same month, a new service agreement is signed with China Airlines, Ltd. (CAL). In an effort by CAL to freeze out proposed newcomer Evergreen Airways (later Eva Airways, Ltd.), its terms call for only Cathay and CAL to exercise technical third and fourth freedoms between the two regions.

Passengers of a B-747-267B are evacuated and 27 are injured when their Jumbojet begins leaking fuel after landing at Tokyo (NRT) on March 24. Also in March, the company receives certification from the Hong Kong Civil Aviation Department (CAD) for Category 3A landings by its B-747-467s and joins with American Airlines to announce an expansion of the joint code-sharing agreement to include over 100 Canadian and U. S. cities served by the U. S. major.

In April, the company is licensed by the Hong Kong government to inaugurate scheduled service to Hanoi and Ho Chi Minh City. During the month, Dragonair (Pty.), Ltd. takes over Cathay’s China route network to Shanghai and Beijing. Employing a B-747-200F, twice-weekly all-cargo flights are inaugurated on May 26 between Hong Kong and Paris. Also in May and in cooperation with Korean Airlines/Korean Air (KAL) , joint freight flights commence from Hong Kong to Seoul. At the same time and acting through a subsidiary, Cathay acquires 50% interest in International Aviation Services (Hong Kong), Ltd., previously known as Caledonian Far East Airways, Ltd.

In June, the company’s ban on smoking is extended to all of its Southeast Asian routes. In addition, a code-sharing agreement is signed with American Airlines for the transpacific shipment of freight over Cathay’s nonstop Jumbojet route from Los Angeles to Hong Kong.

As part of the code-sharing agreement with American Airlines, four-times-per-week roundtrip B-747-467 flights begin on July 1 between Hong Kong and Los Angeles and San Francisco and are the only nonstop service on the market between those destinations. American

Airlines is responsible for the westbound flights with Cathay marketing cargo space out of Hong Kong and Southeast Asia. Under a cooperative code-sharing agreement with Air Canada, Ltd. that comes into effect on the same day, the Hong Kong company purchases blocks of seats aboard the Canadian line’s B-767-233ER services from Vancouver to Toronto; the move essentially extends the Hong Kong route into Eastern Canada.

Also on July 1, the company joins lATA. A dual-designator understanding is signed with Japan Air Lines Company, Ltd. (2) signed later in the month for the start of joint thrice-weekly flights to Sapporo.

In August, a new nonstop route replacing the Vancouver and San Francisco run is opened five times per week from Los Angeles to Hong Kong. Many extra frequencies are added in September. Coordinating with Air France frequencies, the company begins twice-weekly B-747F flights from Hong Kong to Paris in October.

The joint L-1011 service with JAL to Sapporo opens in November. Daily nonstop B-747-467 frequencies commence from Hong Kong to London in December.

Customer bookings accelerate 9.5% to 7,731,254 while cargo jumps 13.8% to 1.44 billion FTKs, 13th highest among all of the world’s airlines. Revenues ascend 14.7% to HK$2.54 billion, expenses total HK$2.07 billion, and operating income dips to HK$463.8 million, which is still 17th best among all world carriers. Net gain falls to HK$384 million, but ranks third in the world after Singapore Airlines, Ltd. and Japan Air Lines Company, Ltd. (2).

The payroll is sliced 0.2% in 1991 to 12,747 and the fleet now includes e8 B-747-267Bs, 1 B-747-236F, 2 B-747-267Fs, 6 B-747-367s, 10 B-747-467s (half of which join the fleet during the year), 16 L-1011 TriStar 1s, and 2 L-1011-TriStar 100s. One of the latter aircraft is leased to Dragonair (Pty.), Ltd. Meanwhile, orders are outstanding for 6 B-747-467s, 2 B-747-467Fs, and 10 Airbus Industrie A330-300s.

Flights begin from Hong Kong to Rome via Zurich on March 31. The same day, the service to Amsterdam via Frankfurt is increased from twice to thrice weekly and the frequencies to London via Bahrain are reduced to thrice weekly. On April 30, Heathrow Airport London is regularly visited for the first time.

Daily nonstop service is inaugurated from Hong Kong to Los Angeles on May 1, along with similar flights to Johannesburg. In July, the new CATCH computer system, just four days after it is turned on, intercepts its first stolen ticket.

On December 16, twice-weekly joint service is opened with Vietnam Airlines from Hong Kong to Ho Chi Minh City employing Cathay’s TriStars under a code-sharing agreement signed between the two companies. Meanwhile, the Vietnamese flag carrier takes a 60% stake in Cathay Pacific Catering Services, Ltd. and that airline subsidiary acquires 40% shareholding in Vietnam Air Caterer.

As a result of recession and high fuel costs generated by the Gulf situation, Cathay suffers its worst fiscal year in memory. Passenger boardings fall 4.4% to 7,391,429 and freight grows only 0.6% to 1.45 billion FTKs. Revenues swell 5.6% to HK$2.68 billion and the operating profit is up to HK$471.2 million. Net gain declines, however, to HK$380.55 million.

A B-747-267B is withdrawn in 1992 as 4 B-747-467s arrive. An order is placed for 11 Rolls Royce-powered B-777-200s. Early in the year, Cathay Pacific First upgraded first-class service is introduced on transpacific flights. Also in the first quarter, shareholding in Dragonair, Ltd. becomes 35% as CITIC, the foreign investment department of the People’s Republic of China, boosts its stake to 48%. At the same time, the Vietnam service is doubled to four weekly flights. Managing Director Sutch is promoted deputy chairman in April and is succeeded by Rod Eddington.

Sutch becomes chairman of both the airline and its parent, Swire Pacific, on June 1. Shortly thereafter, a productivity-enhancement program, Operation Better Shape, is unveiled, along with corporate restructuring. Twice-weekly transpacific B-747F freighter flights connecting Hong Kong with Los Angeles begin in June and represent the carrier’s first all-cargo transpacific service.

Toward month’s end, the airline acquires additional holdings: Steels Aviation Services, Ltd., Steels Aviation Services (Pty.), Ltd., and Steels Aviation Services (In-flight) (Pty.), Ltd., which will be reformed into Cathay Pacific Catering Services, Ltd., Cathay Pacific Catering Services (Pty.), Ltd., and Cathay Pacific Catering (Holdings) (Pty.), Ltd.

Nonstop flights begin to London (LHR) and Paris (CDG) in July. Later in the month, it is announced that the company is changing the configuration of its aircraft as it reworks its first-class cabins and services. In addition, shareholding in International Aviation Services (Hong Kong), Ltd. is reduced from 50% to 20%.

CAAC (The General Administration of Civil Aviation of China)’s subsidiary, China National Aviation Corporation (CNAC-2), and China Travel Service, each purchase 5% shareholding in August from Port Hall, Ltd., itself a subsidiary of the HK&SBC. Mainland Chinese interests now control 22.6% of the airline as the deal is worth HK$440 million.

A 10% interest is acquired during September in Hong Kong Air Cargo Terminals, Ltd., which provides cargo handling at Kai Tak Airport. In October, direct flights are inaugurated to Adelaide returning via Melbourne. A new accounting subsidiary, Guangzhou Guo Tai Information Processing, Ltd. is formed.

Nonstop passenger service is also initiated during the year to Jakarta and Penang, Hanoi, Ho Chi Minh City, and Amsterdam. A new first-class lounge, the largest in Asia, is occupied at Kai Tak Airport. Stringent cost-cutting measures bring a flight attendants’ strike.

Customer bookings increase 13.1% to 8,362,673 and cargo jumps 14.7% to 1.67 billion FTKs. Revenues ascend 11.9% to HK$3 billion and expenses rise 13.9% to HK$2.53 billion. As a result, the operating surplus is HK$423 million and net profit hits HK$385.3 million.

Chairman Sutch and Managing Director Eddington oversee a workforce of 13,240 in 1993 and a fleet of 53 aircraft, increased this year by 3 B-747-467s and 1 Lockheed TriStar. Two L-1011-1s are leased to Dragonair (Pty.), Ltd. for use on the subsidiary’s routes to Beijing and Shanghai. When Philippine Airlines (PAL) is unable to take delivery of a pair of Airbus Industrie A340-211s, the manufacturer arranges to dry-lease them to Cathay.

Coinciding with the Lunar New Year holiday, the company’s busiest period, 25% of the company’s cabin crews go on strike during the last 10 days of January. With their numbers too insufficient to shut down the airline, the cabin crews must watch it successfully fly with its own and wet-leased airliners.

The new accounting subsidiary, Guangzhou Guo Tai Information Processing, Ltd., with some staff, is transferred to Guangzhou Province on the mainland in February. In March, Taikoo Aircraft Maintenance Company, Ltd. is established as a joint venture aircraft maintenance operation in Xiamen, Fujian province.

New services are initiated to Colombo and Cairns, which joins a network that includes stops at Amsterdam, Auckland, Bahrain, Bangkok, Bombay, Brisbane, Brunei, Denpasar, Dubai, Frankfurt, Fukuoka, Hanoi, Ho Chi Minh City, Jakarta, Johannesburg, Kaohsiung, Kuala Lumpur, London (LHR), Los Angeles, Manchester, Manila, Melbourne, Nagoya, Osaka, Paris, Penang, Perth, Rome, Sapporo, Seoul, Singapore, Sydney, Taipei, Tokyo, Vancouver, Zurich.

In June, the company takes a 10% stake in Taeco Engineering; other partners include Japan Air Lines Co., Ltd. (2) and Singapore Airlines, Ltd. In July, the company becomes, with Malaysia Airlines, Ltd. (MAS) and Singapore Airlines, Ltd., a founding partner in the joint Passages frequent flyer program. At the same time, CPA takes a 10% stake in the Taeco maintenance concern and 28% shareholding in Royal International Air Catering, Ltd.

Weekly scheduled freighter service is initiated to Bombay along with 10-times-per-week passenger flights from London (LHR) and daily service from Manchester.

A new position, deputy managing director, is created in November and filled by Linus Cheung, who will soon resign to take a more lucrative position elsewhere. When an order for 4 A340-211s is cancelled in December by Philippine Airlines, they are quickly spoken for by

Cathay for delivery a year hence as interim replacements for an order, now made, for 6 owned A340-300s.

Passenger boardings increase by 5.7% to 8,866,930 and freight moves ahead by 19.4% to 1.99 billion FTKs. The previous year’s flight attendants strike continues and, when combined with recession and local inflation, contributes to only 3% growth in revenues, or HK$3.07 billion. Expenses swell 8.5% to HK$2.78 billion and cut the operating surplus to HK$294.5 million. Net gain is exactly the same figure: HK$294.5 million.

The number of employees is cut by 2.7% in 1994 to 13,772. Early in the year, in anticipation of a new livery, the company begins to paint out the Union Jack on the tails of its aircraft. It will be replaced with a new Landor Associates-designed “brushwing” design, a Chinese calligraphy stroke which suggests the wing of a bird and is designed to help the British-oriented company project a “more Asian” image. At the same time, first-class service is gradually eliminated on intraregional L-1011 flights.

Also in January, the final 20% stake in International Aviation Services (Hong Kong), Ltd. is sold to Dragonair (Pty.), Ltd. In February, a strategic alliance is entered into with Air Mauritius that provides for a joint flight between Hong Kong and Mauritius.

On March 1, all flights between Hong Kong and Europe become nonsmoking. In April, the carrier purchases 75% majority control of Air Hong Kong (Pty.), Ltd. from Shun Tak Holdings for HK$200 million ($26 million). The former independent all-cargo operation, now operated as a subsidiary on the Dragonair (Pty.), Ltd. model, places a third chartered B-747-200F into service.

In response to the murder of 24 Taiwanese tourists on the mainland, the government of Taiwan bans group travel to China during May. Consequently, Cathay reduces its Hong Kong to Taipei schedule in response. Also in May, a 40% interest held in Cathay Pacific Catering Services, Ltd. in Canada is sold to Deutsche Lufthansa, A. G. and a management contract is inked with Air Hong Kong (Pty), Ltd.

An unfounded rumor that John Swire & Sons, Ltd. will divest itself of its 52% interest in Cathay is circulated in June, but quashed. Meanwhile, the Taiwanese ban on flights to the mainland begins to have a financial impact.

During August, the carrier makes a conditional agreement to purchase a one third interest in Xiamen International Airport Group Company, Ltd. for HK$366 million.

First to wear the company’s paint scheme and to mark the first livery change in 20 years, an A330-342 is displayed at the Airbus Industry factories in France on August 31 and then flown to England for participation in the annual Farnsborough Airshow in England.

A joint venture with its Japanese partner, Cathay Kansai Terminal Services Company, Ltd., begins operations when the new air facility opens in September.

The first of two leased ex-Philippine Airlines (PAL) A340-211s arrives at the end of October; in two days of training prior to its introduction into scheduled services, 10 pilots make a total of 62 practice takeoffs and landings at the Thai air force base at Utapoa.

The chartered A340s will fly with Cathay until new, purchased A340-300s can be delivered in 1996. Retirement of the TriStar fleet begins on November 5. Also during the year, service is initiated to Toronto. Plans are made for the inauguration of scheduled flights in the following 12 months to Stockholm and Surabaya.

Customer bookings climb 10% to 9,750,000 while cargo swells 19% to 2.37 billion FTKs. Revenues advance by 13.3% to HK$3.5 billion, leaving profits of HK$306 million (operating) and HK$333 million (net).

A total of 128 employees are hired in 1995, an increase of 0.9 per cent. Early in the year, airline officials publicly condemn Qantas Airways (Pty.), Ltd. for turning Hong Kong Kai Tak Airport into an unofficial hub where it picks up passengers to fly onward to Singapore and Bangkok. It is stated that the Australian carrier exceeds the normal 50% “fifth freedom” norm.

The first of 9 ordered A330-342s joins the fleet in February; when it enters service, Cathay will become the first carrier to fly both the A340 and A330 as complementary aircraft on regional and international services. It is this concept which Airbus Industrie originally had in mind when it launched the expanded Airbus family.

In March, the dormant CAAC (The General Administration of Civil Aviation of China) subsidiary China National Aviation Company (CNAC-2) announces that it will begin a rival airline in Hong Kong before the British colony is handed back to the PRC in 1997.

Negotiations to resolve the “fifth freedom” difficulty commence between the Hong Kong and Australian government aviation ministries, but are broken off in mid-April. At this point, the Hong Kong Economic Service Branch decrees that, after July 1, no more than 50% of Quantas’ passengers flying to Singapore and Thailand may originate at Kai Tak. The Australian Transport minister now shortens Cathay’s operating permit to Australia to June 30, at which point Hong Kong threatens to cut off all Australian flights to Hong Kong the same day.

During the last week of April, China National Aviation Company (CNAC-2) applies for a scheduled license to operate service into Hong Kong as complement to the charter flights into Kai Tak already made with aircraft leased from China Southwest Airlines Company, Ltd. Cathay bitterly opposes the PRC move, even though CNAC is a 10% shareholder in the British colony’s flag carrier.

Simultaneously, a temporary accord is signed between Taiwan and Hong Kong that enables the two to circumvent difficulties that have occurred in their bilateral air negotiations and permit Cathay and China Airlines, Ltd. (CAL) to continue exchanging services.

With no direct air service between the two Chinas, Hong Kong continues to serve as Taiwan’s PRC gateway. Talks between the U. S. and Hong Kong and Hong Kong and India are also stalled over “fifth-freedom” issues.

During the second week of June, Qantas Airways (Pty.), Ltd. threatens to sue the Hong Kong CAD for its July 1 proposal. The following week, the Australian Transport Minister Christopher Pratt weighs into the conflict. Offering to extend Cathay’s Australian operating permit through the end of June rather than the usual October 28, he also proposes that the number of seats allowed to the Hong Kong flag carrier in Australia be reduced by 60%. Cathay Pacific Airways (Pty.), Ltd. also files suit in Sydney to overturn any such Australian government action.

Negotiators from the two countries resume talks on June 26. While neither gives in to the assertions and demands of the other, a six-month “cooling off” period is imposed during which time both sides will seek a solution to their difference.

A new B-747-267F is received in July. In August, the company begins to implement a policy of cross-crew qualification training for the pilots of its A330-342s and A340-313s. Although the practice will be successful for this airline, it will prove difficult to institute with others with more complex union arrangements, e. g., Deutsche Lufthansa, A. G.

During the last week of October, the carrier pledges itself to a move in April 1998 from Kai Tak Airport to the new Chek Lap Kok airfield. The new B-747-267F is employed in November to open a regularly scheduled freight-only route, in cooperation with Air Canada, Ltd., to Toronto via a technical stop at Anchorage. The new service will replace a previous one that had been flown on a nonscheduled basis using B-747-267Bs with a technical stop at Seoul.

Code-sharing begins with British Midland Airways, Ltd. in September on frequencies from Hong Kong to London (LHR) and on to Belfast, Edinburgh, Glasgow, and Leeds/Bradford. During the second week of November, plans are announced for the construction of a HK$453-million headquarters at the new Hong Kong Airport at Chek Lap Kok, which will open in 1998.

Late in the year, 3 B-747-200s are sent to Boeing’s Wichita Division for conversion into freighters for Air Hong Kong, Ltd. Also during the year, service is inaugurated to Stockholm and Surabaya.

A compromise arrangement in December ends the dispute with Qantas Airways (Pty.), Ltd. Under its terms, Hong Kong gains the principle of imposing a cap on lift out of the Crown Colony. Qantas will only have difficulties if it increases Hong Kong-originating boardings beyond 50% of capacity or 200 passengers per day.

Also in December, the carrier withdraws from a HK$144.4-million joint venture that has been discussed with CAAC for the operation of a new airport at Xiamen. A number of differences suggest that a 33% stake will not prove commercially attractive.

At the same time, a September decision to relocate Cathay’s flight training center from Hong Kong to Sydney is opposed as being more expensive than leaving it in place.