The latest review of the Mainland - Hong Kong Special Administrative Region (HKSAR) Air Services Arrangement was concluded Wednesday, providing a clear timetable for opening the Hong Kong-Mainland aviation market to more airlines and for expansion of capacity limits on individual routes.

Since the arrangement was signed in 2000, annual reviews were conducted to address market needs. Compared to previous exercises, the latest review covered a much wider spectrum of issues and achieved substantial progress on various fronts.

Hong Kong's Secretary for Economic Development and Labor Stephen Ip said that a liberal arrangement is crucial for enhancing the competitiveness of the Hong Kong International Airport, and for strengthening Hong Kong's status as an international and regional aviation center.

In the face of increasing competition from airports in the region, the HKSAR government must firmly and actively implement its progressive liberalization policy on air services, Ip said.

The limit on the total number of airlines allowed to participate in the mainland market will be lifted immediately, while the number of routes that allow "dual designation" by each side will be increased in phases, eventually covering all routes by winter 2006.

Passenger and cargo capacities between the two places will be substantially increased. Starting from next month, overall passenger capacity will be increased by 30 percent. As a result, the number of passenger flights that may be operated by airlines of the two sides will increase from around 1,200 to 1,600 per week (number estimated on the assumption that aircraft types currently deployed on respective routes remain unchanged).

Capacity for all-cargo services will increase by 100 percent, from the current 21 frequencies per week (fpw) for each side to 42 fpw, bringing the number of freighter services that may be operated by airlines of both sides to 84 fpw.

Taking Beijing as an example, the new arrangement will allow Hong Kong airlines to add four passenger fpw starting from next month and another seven passenger fpw starting from March next year, bringing the number of weekly frequencies that may be operated by Hong Kong airlines on the route to 70.

As to Shanghai, Hong Kong may designate a new airline to operate all-cargo services starting from next month, and the maximum number of cargo flights that Hong Kong airlines may operate on this route will increase from 21 to 28 fpw.

Passenger capacity will increase about 10 percent (seven fpw), and another 10 percent starting from March next year, bringing the number of weekly frequencies that may be operated by the Hong Kong designated airline to 98.

In addition, from October 2006, a second Hong Kong airline will be allowed to operate passenger service on the Shanghai route. These new rights provide valuable business opportunities to our airlines that have plans to launch services or increase their existing services on the respective routes.

The arrangement currently provides for a wide route network covering a total of 44 destinations in the mainland. A new route, Lijiang, has been included in the new arrangement. Services on the route may commence once Customs-Immigration-Quarantine facilities are in place and the required technical conditions are fulfilled.

The new arrangement also provides for new modes of operation and additional flexibility, by allowing airlines to combine two mainland points in one service and enter into code-share arrangement on all routes between Hong Kong and the mainland.

Furthermore, the arrangement also provides expanded through-running rights (to more destinations with higher capacity on each route) for mainland airlines to operate services to overseas destinations via Hong Kong, to strengthen the hub position of the Hong Kong International Airport.

Ip said that he is confident that the new arrangement will give impetus to the further development of the Hong Kong aviation industry and bring in more competition and provide consumers with wider choices.

Source: Xinhua