The transfer of Hong Kong to Chinese control continues to overshadow the UK colony's role in regional aviation. Despite November's Sino-British accord over funding for Chek Lap Kok, talks are dragging on over the language of debt guarantee agreements, while Hong Kong's future as a Taiwan-China hub appears tenuous as Cathay Pacific's air service agreement with Taiwan's China Airlines nears its end.
The debt guarantees are the first of many details China and Britain must resolve to assure Chek Lap Kok's completion. Backers will not lend to the Provisional Airport Authority (PAA) and Mass Transit Railway Corporation to finish airport projects without those guarantees, and China's approval of their text is required since it will inherit the guarantor's role in July 1997.
The HK$ 11.6 billion ($1.5 billion), which is to come from external financing, would be impossible to raise with out agreement on the debt guarantees. Hank Townsend, the PAA's chief executive, admits further delays would cause 'increasing anxiety'.
As an interim measure, airport officials have proposed to shorten the curfew at Kai Tak to reduce the worsening congestion at the airport. The changes would add 224 more weekly slots. But strong opposition from local residents will lead to more wrangling in Hong Kong's legislative council.
Uncertainty is also growing over the future of the busy Hong Kong-Taiwan route. The Cathay agreement with China Airlines, which serves as an informal bilateral, expires at the end of April. China Airlines wants a five year extension. Since that would extend past China's 1997 takeover of Hong Kong, Cathay is hesitant.
Beijing argues Taiwanese passengers flying to the mainland should do so directly, rather than via Hong Kong, and it could be using the expiry of the current agreement to pressure Taiwan in that direction.
Publicly, Cathay claims it would be acceptable to renew the agreement annually, and thus postpone a showdown. Privately, both sides are searching for a compromise.
China Airlines is floating the idea of changing its livery, with the key element the removal of the nationalist China flag on its tail, which so raises Beijing's hackles. Taiwan is also reportedly considering replacing China Airlines with the Taipei Airline Association as its new representative.
The association sometimes acts as an unofficial representative for Taiwan in bilateral aviation talks. In a region where appearances are so important, this might reduce sensitivities over an agreement with Taiwan's flag carrier, as well as having the practical effect of opening the lucrative route to EVA Air.
Moreover, Taipei's appointment of Vincent Siew to chair its cabinet-level Mainland Affairs Council signals a softening in Taiwan's resistance to direct flights with China. Siew has already endorsed direct shipping links.
Moreover, Taipei's appointment of Vincent Siew to chair its cabinet-level Mainland Affairs Council signals a softening in Taiwan's resistance to direct flights with China. Siew has already endorsed direct shipping links.
Source: Airline Business
