HONG KONG AND Australia are heading for confrontation over Qantas fifth-freedom rights from Hong Kong to Singapore and Bangkok. The Australian carrier has built a substantial market network, using the three Asian destinations as hubs for services to Europe, and for tourism products within Asia.
On 20 April, Hong Kong issued a new operating permit, effective from 1 July and valid until October, imposing a 50% limit on Qantas fifth-freedom traffic on the carrier's "Golden Triangle" routes. This replaces the current permit, due to have expired on 30April.
"The mix of traffic is inconsistent with the guiding principles set out in the Air Services Agreement between Hong Kong and Australia and we drew this to the attention of the Australian authorities in May 1994," says Hong Kong.
"The aim is to encourage Qantas to carry more through passengers, to and from Australia, on these services. It is now necessary to impose the condition because of the failure by Australia at recent negotiations to agree to a reduction in the proportion of fifth freedom traffic," it continues.
Qantas managing director James Strong insists that his airline's market share on the routes is 5-6%. He adds: "Cathay enjoys virtually unrestricted rights to carry Australians anywhere, but simultaneously wants to limit severely the number of passengers we can take from Australia via Hong Kong to other destinations."
Australian transport minister Laurie Brereton claims that there is nothing in the Air Services Agreement, which allows Hong Kong to impose such a restriction. "While the Government is prepared to consider holding further discussions with Hong Kong on this issue, it is not helpful to go into talks with such a threat over the airline. In the circumstances, Australia intends to approve Cathay Pacific's current services to Australia only up to 30 June, 1995," he says.
Source: Flight International
