Hong Kong, India forge air agreements
Hong Kong and India successfully concluded an air services consultation on December 18, with substantial liberalization of the bilateral air services arrangements.
Secretary for Transport and Housing Eva Cheng welcomed the outcome and said the arrangement between the two is a major step forward in the bilateral aviation relationship.
“This is very good news for the airlines of the two sides,” she said. “More competitive air services between Hong Kong and India will definitely benefit the traveling public.”
Under the new arrangement, the two sides’ airlines should be able to more than double service to Delhi and Mumbai, which totals about 20 frequencies per week currently. New service to Bangalore and Chennai also will be possible.
The two sides also exchanged new fifth freedom rights. For example, Indian airlines will be able to operate services to points in North America via Hong Kong under the new arrangement. Hong Kong airlines will be able to operate services to points in Europe beyond India. This will strengthen Hong Kong’s status as an international and regional aviation hub.
Aviation market liberalized with China
The General Administration of Civil Aviation of China and the Transport and Housing Bureau of the Hong Kong Special Administrative Region have completed the latest round of consultations on the Mainland/Hong Kong Special Administrative Region Air Services Arrangement, and have decided to further liberalize the aviation market between Hong Kong and the Mainland by signing a new memorandum of understanding.
Warmly welcoming the outcome of the consultations, Secretary for Transport and Housing Eva Cheng said the new memorandum of understanding will further strengthen the aviation link between the Mainland and Hong Kong as more airlines can be designated to operate services. The new arrangement is significant as capacity restrictions will be further eliminated, achieving full liberalization for all-cargo services starting in winter/spring 2008/09 (i.e., end-October 2008).
“The new memorandum of understanding also will enhance the competitiveness of the Hong Kong International Airport and strengthen the status of Hong Kong as an international and regional aviation hub,” said Ms. Cheng.
Regarding operating rights on individual routes, beginning summer/autumn 2008 (i.e., end-March 2008), there will be no restriction on the number of designated airlines on most of the routes. As for the Beijing, Shanghai, Guangzhou, Shenzhen, Kunming, Dalian and Chengdu routes, each side may designate three airlines to operate passenger/all-cargo services and two other airlines for all-cargo services taking effect in summer/autumn 2008. Effective winter/spring 2008/09, the designations will increase to four airlines to operate passenger/all-cargo services and three other airlines for all-cargo services. The new arrangement will fully meet the needs of airlines of both sides.
In regards to capacity, the two sides decided to further eliminate capacity restrictions. For passenger services, the frequency limit for 14 routes will be lifted starting in summer/autumn 2008, so that airlines of both sides can operate without any capacity restriction on a total of 49 routes. As for the Beijing, Shanghai, Guangzhou, Shenzhen, Kunming, Dalian and Chengdu routes, the capacity will be increased moderately.
For all-cargo services, the present capacity limit, which only applies to the Beijing and Shanghai routes, will be lifted completely starting in winter/spring 2008/09.
Dechert law firm opens Hong Kong office
Pennsylvania-based international law firm Dechert LLP announced January 14, it has opened an office in Hong Kong and has established a formal association with Hwang & Co. The firm will be known as Dechert LLP in association with Hwang & Co.
Dechert Chairman Barton J. Winokur said the decision to establish an office in Hong Kong “results from our assessment of our clients’ current and potential business interests in Hong Kong and mainland China.”
“It is clear that many of our clients consider a China strategy imperative,” he added.
Dechert’s Hong Kong office will focus on private equity, venture capital and hedge fund formation and investing; capital raising and sales of equity stakes through capital markets offerings; cross-border mergers and acquisitions; and Asia-bound and outbound strategic and financial investments.
Dechert LLP is an international law firm established in the United States in 1875. It now has more than 1,000 lawyers in 17 offices in the U.S., Europe and Asia. Hwang & Co. focuses on private equity and growth capital transactions in Greater China; IPOs and listings in Hong Kong; Hong Kong corporate and securities law; and mergers and acquisitions.
Airlines experience passenger growth
The combined December traffic figures for Cathay Pacific Airways and Dragonair show double-digit growth in passenger numbers compared to the same period in 2006. Cargo tonnage also grew, but lagged behind the growth in capacity.
In December, the two airlines carried a total of 2,117,307 passengers, up 10.4% year-on-year, with the load factor increasing by 1.4 percentage points to 80.8%. The capacity measured in available seat kilometers (ASKs), rose by 8.6% for the month. For 2007 as a whole, Cathay Pacific and Dragonair carried a total of 23,253,427 passengers, a 4.3% increase year-on-year, while capacity rose 2.8%.
The two airlines carried a total of 147,800 metric tons of freight in December, a 2.9% increase year-on-year, while the cargo and mail load factor remained static at 68.6%. Capacity for December rose 6.9%, which is the same figure for the year as a whole. In 2007, the airlines saw 3% year-on-year tonnage growth to 1,641,853 metric tons.
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