Taiwan and the mainland signed an agreement begin direct weekend passenger flights and tour-group visits, after completing their first official talks since 1999.

The island’s vice minister of transportation Yu Fang-lai said flights across the Strait of Taiwan will begin on July 4. And Taiwan will welcome an average of 3,000 Chinese tourists a day starting July 18.

Chinese President Hu Jintao said today in a meeting with Taiwan’s negotiator Chiang Pin-kun saiid the talks ’show the improvement of cross-Strait relations has got off to a good start.’

The election in March of President Ma Ying-jeou, who defeated the independence-leaning Democratic Progressive Party on a pledge to improve ties with the mainland, provided the catalyst for the new co-operation.

China Airlines, Taiwan’s largest carrier, climbed as much as 3.7% in Taipei trading. EVA Airways, the second-largest, added as much as 4.4%.

Goldman Sachs Group Inc. economist Enoch Fung said direct flights and cross-strait tourism may add about 60 to 80 basis points to Taiwan’s economic growth, said today after the deal was signed.

He said, ‘The implementation of these policies would support a recovery in sentiment and domestic demand, and should help Taiwan offset the negative external shock from slower U.S. demand and higher energy prices.’
Source: Bloomberg

China’s Xiamen International Airport Group has said it is considering partnerships with Taiwan carriers in the hope that working together the two sides could establish regular weekly flights.

The airport, located in southeast China’s Fujian province just across from Taiwan, is looking at various options, including transforming itself into an air cargo hub for flights to Taiwan.

However, we are still at the tentative stage. It has not yet entered into concrete negotiations with air companies from Taiwan.

The state-owned airport group was well positioned for closer cooperation with Taiwanese carriers as it had been taking chartered flights between Taiwan and the mainland for years.

The incoming government of Taiwan president-elect Ma Ying-jeou seems to be leaning towards July 4 for the start of the first regular direct charter flights between China and Taiwan in this new relationship.

Currently, only holiday services are allowed on passenger charter flights, and cargo flights are conducted on a case-by-case basis. Soon — how soon and by whom remains to be decided — there will be regular flights. It will come as no surprise to anyone that American airlines are demanding that they be allowed in on this route citing the open skies policy. Logic tells us this is unlikely.
Source: AFP

The prospect of weekend ‘charter services’ from July 8 across the Taiwan Strait, as pledged by Taiwan’s President-elect, Ma Ying-jeou, could kick-start the process of opening one of North Asia’s biggest air travel markets. Currently, non-stop services are only permitted in the four major holiday periods on the Chinese calendar.

Daily charter services could be introduced this Northern Winter and be replaced as scheduled services in 2009, under Ma’s proposal.

Airlines on both sides are moving quickly to take advantage of the opportunity.Air China, for example, has applied to establish a representative office in Taiwan after Ma Ying-jeou is sworn in as President on 20-May-08.

EVA Air (shown in our illustration) forecasts a 50% increase in passenger numbers between Taiwan and the Mainland after the first stage of expanding the charter operations.

More than 1.5 million Taiwanese live on the mainland and are expected to travel more, if the inconvenience and added expense of a transit at a third point are removed. Furthermore, the Ma government proposes increasing ceilings on Mainland tourists, to help stimulate the island’s economy. Mr Ma plans to allow 3,000 Mainland arrivals per day to Taiwan from Jul-08, rising to 10,000 by 2012.

But the expansion of cross-Straits services is a serious looming threat for airports in Macau and Hong Kong and the carriers based there that have built large revenues from transfer services between Taiwan and the Mainland.
In terms of seat capacity, Cathay Pacific is the most exposed. Cathay accounts for almost one quarter of seats across the Taiwan Strait (from Hong Kong and Macau) at present, or around 38% including Dragonair. It will have to seriously consider how it will make good that shortfall.

Source: Centre for Aviation

Air China, China’s largest international carrier, plans to start scheduled flights to Taiwan as soon as services are allowed.

Board Secretary Huang Bin said, ‘We are fully prepared to operate regular direct flights.’

He declined to confirm or deny a report by the Commercial Times that the Beijing-based carrier plans to apply to open an office in Taiwan after the island’s new government is installed on May 20.
Taiwan President-Elect Ma Ying-jeou has pledged to end a five-decade ban on regular direct flights to China’s mainland as soon as he takes office. WHich will make life a lot easier for traveler’s who until now have had to travel by way of Hong Kong.

Airlines including Air China already fly occasional charter services across the Straits under a government policy allowing direct flights around Chinese holidays but, so far, there has been no regular service.

Our illustration shows Air China stewardesses preparing to present Beijing 2008 Olympics mascots to Taiwan passengers as souvenirs at Capital International Airport in Beijing, January 25, 2006. Air China’s first Spring Festival charter (as oopposed to regular) flight CA197 flew from Beijing to Taipei in southeast China’s Taiwan on January 25.
Source: The China Post

Leading business people in Taiwan have voiced the hope that the Taiwan authorities can realize ‘three direct links’ as soon as possible when Ma Ying-jeou, seen in the center of our illustration, takes office as the new leader of the region.

Ma, the candidate representing Taiwan’s Kuomintang who won the election, has promised to expand business ties and reinstate direct transport and postal links with the Chinese mainland.

The ‘three direct links’ refer to direct trade, transport and mail services across the Taiwan Straits.

Chi Mei Corporation President Ho Jau-yang said the Taiwan authorities should let enterprises in Taiwan embrace the business opportunities in the mainland. Chairman of the E United Group Lin I-Shou said Taiwan should let mainland tourists travel to Taiwan as soon as possible.
Source: China View