Taiwanese airlines target Chinese transit passengers

Singapore
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Taiwan's two main airlines are hoping that the next round of negotiations on an air services agreement with China will allow passengers on the mainland to transit in the island on the way to other destinations.

The next round of talks will begin in December, and are likely to increase the allotment of the number of direct services between Taiwan and China. Direct cross-straits services only began in 2009, but they have grown rapidly as a result of improving bilateral relations, which are underpinned by close business ties and a strong leisure market.

While Taiwanese passengers are now allowed to transit in China if they wish to, Chinese passengers are not allowed to do that in Taiwan. Both China Airlines and Eva Air, which have benefitted from the liberalisation, have called for this to change.

"We are focusing on the development of our hub and spoke business model, and there are plenty of opportunities for to tap on the Chinese market if this is liberalised. More and more Chinese want to travel to other parts of the world and especially the USA where we have a big presence. That traffic will go elsewhere if this is not opened up," says Eva's senior vice-president Glenn Chai.

China Airlines' president and chief executive HH Sun urged the bilateral negotiators to ease the restrictions on the movement of Chinese transit passenger this year, saying that this will be a boost to Taiwan's airlines.

"We expect the liberalisation to develop Taiwan's position as a hub for traffic on trans-Pacific and European services. This will be an important decision," he adds.

Regardless of the decision, an increase in the number of cross-straits flights allowed between Taiwan and China will benefit their airlines, say the executives. Chai says that there were 1.7 million Chinese visitors to Taiwan in 2011 and that is expected to grow to 2.5 million in 2012. Hong Kong itself, however, had 20 million visitors in 2012 from the mainland. Even if there is an economic slowdown in China, that is unlikely to affect the cross-straits traffic, they add.

"There is still so much more potential for growth, there are so many more points that we can fly to in China and this demand comes from both tourist and from business people," says Sun.

Both airlines also plan to work more closely with their alliance partners in the mainland to develop their network. China Airlines is in SkyTeam, which includes China Eastern Airlines and China Southern Airlines. Eva is scheduled to join Star Alliance in 2013 and its sponsor is Beijing-based flag carrier Air China.