Swire Group

Russian rights to boost HK flights

PUBLISHED : Tuesday, 14 March, 2006, 12:00am
UPDATED : Tuesday, 14 March, 2006, 12:00am

Overflight deal opens door to more US, Europe services as Russian freight rises

Hong Kong and Russian negotiators have agreed to a big expansion of passenger and cargo services in their latest bilateral talks but no progress was made on Cathay Pacific Airways' troubled bid to launch services to Manchester through Moscow.

Aside from more direct flights, Cathay, Hong Kong Dragon Airlines and Oasis Hong Kong Airlines will benefit from more Russian overflight rights, allowing them to fly to more destinations in Europe and the United States without routing restrictions.

A government official would not disclose the size of the expansion but with carriers on both sides not fully using previous allocations for point-to-point flights, the deal will be judged by greater access to Russian airspace.

'It has expanded many, many times, much more than either side is utilising at present,' said an official who attended the talks.

According to one Hong Kong airline executive, local carriers were close to the full allocation of Russian overflight rights and the pending shortfall was 'always hanging over our expansion plans'.

'The increase in overflights should look after the needs of all of us for the foreseeable future,' the executive said.

The shortest routes to Europe are over Russia and the most fuel-efficient routings to the US go via the Russian Far East.

Oasis is understood to have requested 10 overflight rights a week, enough to start flights this summer to London; Dragonair is committed to new cargo services to Los Angeles; and Cathay is expected to expand its portfolio of destinations as its fleet reaches 101 aircraft by its 60th birthday in September.

Demand for Cathay's services remained robust last month with passenger traffic up 9.1 per cent at 1.26 million. However, Cathay will be disappointed by a lack of progress on its Moscow-Manchester bid, which remains stuck in regulatory mire. It has twice delayed launching the route; last month its code-sharing partnership with Aeroflot was found lacking the necessary rights to fly beyond Moscow to Britain's third-largest city.

The airlines gave negotiators very different wish lists for the talks which ended last week. Hong Kong carriers made no cargo requests, while Russian carriers were largely focused on freight.

In return for the overflight rights, Russian airlines were awarded 12 extra cargo flights a week to Hong Kong, including coveted beyond-rights to Japan and India.