Hong Kong and the USA were due to have opened their first round of air services talks in four years in mid November in a key test of Hong Kong's resolve to liberalise.

The two-day round was due to have begun on 17 November in Washington DC with code-sharing and beyond, or fifth freedom rights for US carriers high on the agenda.

The two sides last negotiated a new air services agreement in 1995 after eight years of discussion, and since then Hong Kong has rejected US calls for an open-skies pact. The former colony has a less restrictive aviation policy, however.

The existing agreement allows Hong Kong-based carriers to operate to any 14 US cities and beyond to Canada. When negotiated four years ago it was lauded by Hong Kong as a major victory, as it increased the number of US cities allowed to be served and gave carriers rights beyond the USA to Canada. In return, US carriers were granted more rights to operate to and beyond Hong Kong.

Since the expansion of multilateral alliances, US airlines and Cathay Pacific Airways have been pushing for code-sharing rights. Cathay and American Airlines are founding members of the oneworld alliance, and the former is believed to be requesting rights to share codes on America's entire domestic network, while the latter is focused on gaining access to Cathay's intra-Asia route network.

United Airlines of the rival Star Alliance is also seeking rights to share codes on flights operated by its alliance partners, none of which is based in Hong Kong. US cargo carriers and other US passenger airlines are also looking for more fifth freedom rights in Asia.

Hong Kong has for years been accused of having an overly protectionist civil aviation policy, and observers are watching the talks closely to see if recent pledges to liberalise will be realised.

Scheduled flights between the Philippines and Taiwan, barred since an air services agreement was cancelled at the start of October, look set to be resumed soon after the Philippine Government said it was willing to again recognise the cancelled air agreement.

Scheduled flights were halted in October after the Philippines unilaterally cancelled the three-year-old agreement over alleged violations of its terms by China Airlines and EVA Airways.

Manila's Civil Aeronautics Board had demanded that a new agreement be drawn up to allow for 3,000 passengers to be carried weekly between the Philippines and Taiwan by carriers from each side - down from 9,600 as previously allowed for.

Source: Airline Business