Airline rivalries still flying.

• Position: Update

Although airlines throughout Asia are reporting dramatic reductions in customers due to the SARS outbreak, long-standing rivalries between airlines are still very much alive. Hong Kong Dragon Airlines Ltd, the city's smaller carrier, recently won the right to challenge a government ruling that allows its larger rival Cathay Pacific Airways Ltd to fly to China. Hong Kong high court judge Michael Hartmann agreed to allow a judicial review of an April decision by the city's aviation authority to allow Cathay to operate flights to Beijing, Shanghai and Xiamen. Cathay, Asia's sixth-largest carrier by sales, wants to resume service after a 13-year absence from the world's fastest-growing air travel market. Cathay must also get Chinese approval for the flights. Dragonair said the authority lacked the power to approve routes under the Basic Law, Hong Kong's mini-constitution. Dragonair has said Cathay's presence in the Chinese market could cause the smaller airline to lose as much as HK$600 million ($119 million)) a year on three routes to China. The carrier posted a profit of HK$540 million last year. Only five of the 18 China routes it operates are profitable and are subsidising unprofitable routes, Dragonair say. Shanghai, Beijing and Xiamen are among those that are profitable.

* Japan

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