NICHOLAS IONIDES SINGAPORE
After more than a year of on-off talks, a new air services agreement was finally reached between Hong Kong and Taiwan at the end of June.
The move opens up the lucrative market to two more carriers, and gives three of the four existing operators additional service rights.
The deal, for political reasons officially negotiated by airlines rather than government officials, was reached just before the 30 June expiry of the old agreement, which had already been extended twice from its original deadline date of June last year.
Airlines from each side have been given 49 new passenger service rights per week - some available for immediate use, and others for use from 2004. The deal also allows for more cargo to be carried. The old arrangements allowed carriers from each side to operate up to 121 passenger flights per week.
Taiwan's EVA Air and Hong Kong's Dragonair, already operating between the two sides, previously had far fewer rights than main carriers China Airlines (CAL) and Cathay Pacific Airways.
Both have already significantly increased passenger services, in addition to launching freighter services. Cathay was also given more rights to serve Taiwan, although CAL was left out as a result of its fatal 25 May crash.
Air Hong Kong, the all-cargo subsidiary of Cathay, and Mandarin Airlines, a passenger airline subsidiary of CAL, are free to open their first services on the route.
Services between Hong Kong and Taiwan are often referred to as "golden", since they are highly profitable. Direct flights between Taiwan and mainland China have been banned for more than 50 years, forcing stop-overs in third ports, usually Hong Kong or Macau. Taipei-Hong Kong is often cited as the busiest international route in the world.
But air services arrangements between the two sides are extremely complicated as China, which controls Hong Kong, considers Taiwan a renegade province and does not allow official governmental contact. This means airlines officially negotiate agreements, although it is commonly known that government officials must endorse any terms, and in reality carry out the negotiations.
Meanwhile, talks between Hong Kong and US negotiators in Washington on a new air services deal have failed yet again. Both sides were hopeful before talks began late in June that a deal could be reached, giving US carriers additional fifth-freedom rights allowing them to operate more services beyond Hong Kong, as well as permitting oneworld alliance partners American Airlines and Cathay Pacific Airways to codeshare.
It was claimed that progress was made, but no further talks have been scheduled.
Source: Airline Business
