ATW Daily News

Chinese/Taiwanese airlines get another government boost with expanded cross-strait deal

Tuesday April 28, 2009

Airlines on either side of the Taiwan Strait are expected to reap further benefits following the Sunday signing of an expanded agreement by the Taipei-based Strait Exchange Foundation and the Beijing-based Assn. for Relations Across the Taiwan Strait that will more than double the number of permitted flights.

Direct cross-strait flights will be increased from the current 108 per week to 270. The increase likely will take affect in July. In addition, Taiwanese carriers will be granted access to six new cities--Hefei, Harbin, Nanchang, Guiyang, Ningbo and Jinan--bringing to 27 the number of mainland gateways available. Airlines flying to Taiwan from Guangzhou, Shenzhen and Xiamen no longer will be required to bypass Hong Kong, while an additional route to the north has been created to alleviate crowding aboard the increasingly popular services.

The frequency increase is not as high as was anticipated in February but still is significant (ATWOnline, Feb. 13). Cross-strait routes enjoy load factors of more than 80%, higher than nearly all domestic mainland and international routes despite the global economic and industry downturn.

"The cross-strait routes are 'golden' routes, as they are the most profitable," EVA Air mainland spokesperson Ke Jincheng said. "The supplementary agreement has encouraged us a lot and is very positive news for our carriers hit hard by the global financial crisis." EVA's first quarter was its first three-month period in the black since the third quarter of 2007 (ATWOnline, April 27).

Industry analysts pointed out that China Eastern Airlines should benefit most from the expanded agreement, as the Shanghai-based carrier has bases in Hefei, Nanchang, Ningbo and Jinan while China Southern Airlines has bases in Harbin and Guiyang and Air China has a base in Jinan. CEA Board Secretary Luo Zhuping said the carrier's cross-strait routes have operated at 80%-90% capacity and that it plans to fly to Taiwan from the new cities.

On the cargo front, the new agreement permits belly freight for the first time and boosts cargo flights from the current 60 per month to 112.

by Katie Cantle

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