Secretary for Transport and Housing Bureau of the Hong Kong Special Administrative Region (HKSAR) Eva Cheng said Thursday that the new memorandum of understanding on the aviation market between China's Hong Kong and the mainland is a significant new arrangement.

"It 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 are further eliminated, achieving full liberalization for all-cargo services with effect from the end of October 2008," Cheng said.

The General Administration of Civil Aviation of China and the Transport and Housing Bureau of the HKSAR have completed the latest round of consultations on the Mainland/HKSAR Air Services Arrangement recently. They also decided to further liberalize the aviation market between Hong Kong and the mainland by signing the new memorandum of understanding.

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

On operating rights on individual routes, starting from the end of March 2008, there will not be any 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 with effect from summer/autumn 2008.

As regards capacity, the two sides decided to further eliminate capacity restrictions. For passenger services, the frequency limit for 14 routes will be lifted starting from summer or 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 completely lifted starting from the end of October 2008, achieving full liberalization for all-cargo services.

(Xinhua News Agency December 28, 2007)