Relations appear to be improving between Taiwan and China, which could lead to the resumption of direct flights between them. Taiwan has bid to invest in two cargo projects on the mainland.

Taiwan's China Airlines (CAL), its 47%-owned Taiwan Airport Service, EVA Airways and Far Eastern Air Transport are jointly pursuing 49% of a cargo services project at Xiamen Gaoqi International Airport. CAL is also separately working to revive stalled efforts to take a minority stake in Shanghai-based China Cargo Airlines, which is 70%-owned by China Eastern.

Analysts say the willingness of airlines and aviation authorities from both sides to move closer together bodes well for wider relations, and could lay the foundation for an eventual resumption of direct flights between the two. China considers Taiwan a renegade province and there are no direct air links between them, forcing passengers to make transit stops, typically in Hong Kong or Macau.

Under their tentative agreement with Xiamen airport, the Taiwanese partners will each take stakes of 12-16% in a cargo services project. Construction is expected to be completed in 2002 and the ´220 million ($27 million) venture will provide cargo handling, storage, transportation and related services.

CAL is meanwhile working to acquire 25% of China Cargo. Talks have been held over the past year but CAL hopes that agreement can be reached by the end of 2001.

Source: Airline Business