Nicholas Ionides / Singapore
Airlines agree commercial terms adding third carrier each and increasing frequencies
Airlines from Hong Kong and Taiwan have finally agreed new commercial terms for air services that allow for a significant increase in passenger and cargo traffic as well as a third carrier from each side to join the lucrative market.
The deal was reached just ahead of the 30 June expiry of the old agreement, which had already been extended twice for six-month periods from its original expiry of June last year.
The five-year deal ends more than a year of deadlock. It gives carriers from each side 49 new passenger service rights a week - some available immediately and others from 2004. It also allows for more cargo to be carried.
Taiwan's EVA Air and Hong Kong's Dragonair are the biggest beneficiaries. Both already operate between the two sides, but have much fewer flights than main carriers China Airlines (CAL) and Cathay Pacific Airways. Both plan to increase passenger services significantly on the route from as early as this month, in addition to launching freighter services.
The deal allows Cathay's all-cargo subsidiary Air Hong Kong and CAL's passenger airline subsidiary Mandarin Airlines to launch services. Cathay has also won additional operating rights for itself. Only CAL did not win new frequencies, a direct result of its 25 May fatal crash.
Air services between the two sides are complicated as China, which controls Hong Kong, considers Taiwan a renegade province and does not allow government-to-government contact. These talks were even more complicated than usual as Taiwan had demanded that government officials formally negotiate and sign a new accord, which Beijing rejected. Taiwan later backed down, however, and the new accord took effect from 1 July.
Under the old agreement, CAL and EVA were allowed to operate a combined 121 flights a week to Hong Kong from Taipei and Kaohsiung. Cathay and Dragonair were able to operate the same number of services to Taiwan - Dragonair only to Kaohsiung and Cathay with 100 flights a week to Taipei. Direct flights between Taiwan and China have been banned for over 50 years, forcing stopovers in Hong Kong or Macau.
Source: Flight International
