They've done it by sea, and now Taiwan is searching for ways to ease its self-imposed ban on direct air links with the People's Republic of China.

In an historic but short voyage in late April, the first ships carried cargo directly across the straits. Each side has now approved at least five of the other's shipping lines to ply routes between Kaohsiung and the Chinese ports of Xiamen and Fuzhou. The latter two are the Chinese cities most likely to pioneer direct air links.

On the back of this maritime breakthrough, Taipei's transportation and communications ministry has taken the major step of proposing indirect flights to China by Taiwanese airlines. Tsai Chao-yang, Taiwan's transport minister, recently unveiled a plan to the cabinet-level mainland affairs council that would allow Taiwanese airlines, with appropriate route authorities, to fly to China on condition that they use wet-leased foreign aircraft and fly through an intermediate point. This effectively means EVA Air and TransAsia could access China over Macau in cooperation with Air Macau, while China Airlines and EVA could do the same with Dragonair between Hong Kong and China. CAL and EVA already have interline agreements with China's major carriers and recently opened Beijing offices.

Before implementing such a plan, Taiwan would need to amend its bilaterals with Macau and Hong Kong and confront the tricky issue of how to obtain Beijing's consent, since the two governments currently avoid official contact.

Direct shipping links offer a valuable dress rehearsal for sorting out some of these issues in aviation. Taipei has allowed these sea links so long as cargo only moves through a special port in Kaohsiung designated for transshipment and does not pass through local customs or enter Taiwan itself. This allows Taipei to maintain the legal fiction that its transshipment port is not part of Taiwan, so ships calling at it have no 'direct' link to Taiwan. Shipping lines deal only with the local port authorities to avoid direct involvement by either government. China regards these as direct point-to-point routes while Taiwan refers to them as 'offshore transshipments.'

Analysts predict Taipei will ultimately relax its shipping rules and that restrictions on its proposed indirect flights will also ease sometime after operations start. Taipei has already signalled that if shipping goes smoothly, it will set up special economic zones to allow local processing of goods bound for China. The number of approved ports on both sides of the straits could also expand. Analysts forecast that demand will soar, with direct links cutting transport time from four days to one and slashing shipping costs by over 80 per cent. Once Taipei allows unrestricted sea links it will have no further basis for opposing direct flights.

 

Source: Airline Business