Hong Kong flights yield Qantas stopover

By Jamie Freed

April 17, 2004 A new airline will fly between Sydney and Hong Kong
as part of a deal finalised by aviation regulators late on Thursday
that also heralds more flights to and from the key Asian destination.

From next year, Hong Kong's second-largest carrier, Dragonair, plans
flights between Sydney and Hong Kong, with the possible later addition
of other Australian cities.

The initiative was hailed by Senator Ian Campbell, acting Minister for
Transport and Regional Services.

"This deal is a major breakthrough for the tourism and aviation
sectors in both countries, in what is the world's fastest growing
region," he said, describing it "as the most significant forward step
ever taken in our bilateral aviation relationship with Hong Kong".

Flights between Sydney, Melbourne, Brisbane, Perth and Hong Kong can
immediately increase from 35 to 55 a week under the deal.

The updated air services agreement also lets Australian carriers use
Hong Kong as a stopover for European flights. Previously, Australian
airlines had stopover rights for three European destinations, but the
heavily travelled Australia-UK route will now be open for Hong Kong
stopovers.

"This is an important step for Hong Kong to compete with other
regional hubs to attract more traffic to hub through Hong Kong on the
Kangaroo Route," said Wilson Fung, Hong Kong's Deputy Secretary for
Economic Development and Labour.

But the agreement does not allow Hong Kong carriers to use Australia
as a stopover for North American flights.

"Qantas was negative on some of the aspects that Hong Kong wanted,
such as rights through the Pacific to the US," said Derek Sadubin,
general manager of the Centre for Asia Pacific Aviation.

But Mr Sadubin said it was unlikely that Qantas would shift its main
Asian hub for European flights from Singapore to Hong Kong, because of
its new low-budget Singapore venture.

Cathay Pacific, a minority stakeholder in Dragonair, also operates
flights between Australia and Hong Kong. But this has not deterred
Dragonair from jumping into the market for Australia's seventh-ranked
international route.

"We believe there is sufficient demand and future potential in the
market for Dragonair to bring its high standards of service to the
Hong Kong-Sydney route," Dragonair spokeswoman Laura Crampton said.