Air deal to transform Mainland-Taiwan travel

5 Nov 2008

Air travel between the island of Taiwan and mainland China is to be transformed with a new deal agreed between Beijing and Taipei.

The agreement, signed in Taipei yesterday, will see direct passenger flights treble to 108 per week and will now raise the number of mainland cities linked to Taiwan from five to 21.

The charter flights will be able to be run daily instead of just four days out of seven as they are at the moment and they will no longer have to fly detours through Hongkong or Macau airspace. The deal also opens up routes for private business jets.

Following the end of the Chinese Civil War between the Communists and Guomindang in 1949, direct air travel was suspended between the Guomindang-controlled island and Communist-run mainland.

Growing trade and business links meant that business travellers between Taiwan and the mainland had to fly indirect routes via stopovers in third destinations, often Hongkong, resulting in longer and more expensive journeys.

Analysts say that Taiwan's China Airlines and Eva Airways and mainland China's China Eastern will benefit the most from fully direct flights.

There are an estimated 1.5 million Taiwanese working and doing business in mainland China.

Hongkong-based carriers Cathay Pacific and sister airline Dragonair are expected to see a drop in passenger numbers and revenue. Cathay's Taiwan routes account for about 8 percent to 10 percent of its revenue.

Cathay Pacific corporate communications manager Carolyn Leung said: “It is a bit too early for us to comment on the agreement. We shall have to wait for more implementation details. So far, the impact from the existing 18 weekend charter flights is minimal as Cathay Pacific operates 15 to 16 daily flights to Taipei. There are no plans to reduce our flights to Taipei at this stage.

"The impact on Cathay Pacific will depend on the pace of introducing ‘scheduled’ direct flights and the number of city pairs to be served. As cross-Strait traffic grows, the triangular Mainland-Hongkong-Taiwan traffic will also grow with the role of Hongkong as the centre for trade, commerce and finance gaining further importance,” she said.

Kenny Coyle

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