More countries are queuing up for talks with Chinese authorities aimed at securing additional operating rights for their airlines, amid promises from China of a more liberal air services regime.

Traditionally protectionist China has been progressively liberalising in recent years and those efforts were stepped up last year, when the Civil Aviation Administration of China (CAAC) gave airlines from a handful of countries fifth-freedom rights for the first time. It also unveiled an open-skies policy for the southern island province of Hainan and pledged to further ease operational restrictions on foreign carriers wishing to serve other parts of the country.

Now more governments are seeking additional opportunities for their registered carriers, with air service talks either planned this year or under way between China and the UK, USA, Hong Kong and several others. Thailand recently secured a new agreement for its carriers that is being described as an open-skies accord, and which reportedly includes provisions for services beyond China.

One country pushing particularly hard for fifth-freedom rights is the USA. Although no new agreement was announced after talks held in Beijing early in February, the negotiations were described as positive.

The USA and China last updated their air services agreement early in 1999, allowing each side to designate up to four carriers for China-USA services. The US side now wants more rights so its carriers can increase China flights - particularly freighter services. It is also seeking fifth-freedom, or beyond rights, enabling carriers to operate freighters beyond China to third countries, with full pick-up rights.

At least two countries have already secured such rights for their airlines, namely Australia and Singapore. Qantas has just launched freighter services to Shanghai that continue to Chicago, while last year Singapore Airlines Cargo became the first operator to exercise rights to operate services beyond China, with freighter flights on a Singapore-Xiamen-Nanjing-Chicago routing.

China is also preparing to open air services talks with Hong Kong. The former colony was handed back to Chinese rule in 1997, but is considered a Special Administrative Region of China and has autonomy when it comes to air services.

Cathay Pacific Airways is one carrier that wants more rights to serve mainland China. It only recently started flying to Beijing again after an absence of more than a decade with thrice-weekly passenger services. Although it was licensed by Hong Kong authorities last year for 21 weekly services to both Beijing and Shanghai and for three weekly services to Xiamen, it has not been able to take advantage of its full allowance due to restrictions in the existing air services accord.

The existing pact, negotiated early in 2000, only allows one Hong Kong-based airline to operate to Chinese destinations other than Beijing. The Chinese capital can already be served by more than one carrier. Hong Kong's second-largest airline, Dragonair, currently uses most of the China rights that are available and opposed Cathay's application for licences to serve China last year.

Cathay's general manager international affairs and alliances Andrew Pyne says: "The bottom line is we need daily passenger services to Beijing and Shanghai, plus a freighter service to Shanghai."

He adds: "There are some entrenched interests against any new agreement, but the government clearly recognises that maintaining the status quo will be bad for consumers, bad for Hong Kong's development as a hub and do nothing to support the development of international tourism on the Chinese mainland."


Source: Airline Business