A MAJOR ROW between Hong Kong and Australia over Qantas' fifth-freedom rights beyond Hong Kong has moved to open confrontation, raising the prospect of a total ban on all flights between the two countries by their respective carriers.

Hong Kong had imposed a limit of 50% of Hong Kong origin and destination (fifth-freedom) passengers, on Qantas flights beyond Hong Kong to Singapore and Bangkok, effective from 1 July.

Australia responded by renewing Cathay Pacific Airway's operating permit to Australia until 30 June, rather than 30 October.

Australia later agreed to extend Cathay's rights until October, but imposed a cap of 164 passengers on the carrier's passenger numbers on all Sydney-Hong Kong flights.

Australia says that the move is calculated to impose a financial impact on Cathay Pacific equivalent to Qantas' estimated annual loss of A$53 million ($38 million) resulting from the restrictions imposed by Hong Kong.

Source: Flight International