Hong Kong and Mainland China have signed a pact to further liberalise the aviation market between the two jurisdictions. Capacity restrictions will be eliminated allowing full liberalisation of all-cargo services in just over a year's time.

Welcoming the move on Dec. 27, Secretary for Transport & Housing of Hong Kong SAR Eva Cheng said the pact will strengthen aviation links between Hong Kong and the Mainland as more airlines can be designated to operate services.

"The new memorandum of understanding will also enhance the competitiveness of Hong Kong International Airport and strengthen the status of Hong Kong as an international and regional aviation hub," Ms Cheng said.

Open Skies

From April there will be no restriction on the number of designated airlines on most routes. For the Beijing, Shanghai, Guangzhou, Shenzhen, Kunming, Dalian and Chengdu routes, each side can designate three airlines to operate passenger or all-cargo services and two other airlines for all-cargo services from summer/autumn 2008.

From winter/spring 2008-09 the designations will rise to four airlines to operate passenger or all-cargo services and three other airlines for all-cargo services.

The two sides also decided to further eliminate capacity restrictions. For passenger services the frequency limit for 14 routes will be lifted from summer/autumn 2008, so airlines can operate on 49 routes without capacity restriction. For the Beijing, Shanghai, Guangzhou, Shenzhen, Kunming, Dalian and Chengdu routes, the capacity will rise moderately.

For all-cargo services the present capacity limit, which only applies to the Beijing and Shanghai routes, will be completely lifted from winter/spring 2008-09.

Indian Air Pact

Meanwhile, Ms Cheng also hailed the recent liberalisation of Hong Kong-India air services. She said the new arrangements are a major milestone in bilateral aviation relations between the two jurisdictions.

"This is very good news for the airlines of the two sides. More competitive air services between Hong Kong and India will definitely benefit the travelling public," Ms Cheng said.

The consultation was successfully concluded in India on Dec. 18. Airlines can more than double services to Delhi and Mumbai, which is at present about 20 flights per week. New services to India's IT base Bangalore and Chennai will also be possible.

The two sides have also exchanged new fifth freedom rights, which allow Indian airlines to operate services to North America via Hong Kong, and Hong Kong airlines to run services to Europe via India.