Cathay Pacific rules out Hong Kong price war with Virgin

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The Independent Online
CATHAY PACIFIC yesterday ruled out a price war on the London-Hong Kong route when Richard Branson's Virgin Atlantic begins services there next month, writes Michael Harrison.

Although Cathay has responded to the introductory pounds 499 return fare announced yesterday by Virgin, the Hong Kong-based carrier said it would be 'commercial suicide' to match Virgin's price structure entirely.

'A fare war is certainly not to our advantage, nor do we believe it is in Virgin's interests to start pulling down all the rates to Hong Kong,' said Arthur Bullard, Cathay's general manager, Europe.

Virgin will fly daily from Heathrow to Kai Tak from 21 February, with one of its new Airbus A340-300s offering an upper-class return fare of pounds 1,906 and a mid-class fare of pounds 1,125 - the same as the full economy fare charged by Cathay and British Airways.

Although 15 airlines offer flights between London and Hong Kong, the market is dominated by BA and Cathay, each with a 30 per cent share.

A Virgin spokesman said: 'It will be much more of a product war than a price war.' Its service will include seat-back video and electronic gambling screens in economy class.

Cathay has responded by doubling Air Miles on all first and business class flights between the UK and Hong Kong until 30 April and offering free limousine transport to Heathrow and Manchester and chauffeur parking.