AUSTRALIA's national carrier Qantas is seeking a 'cooling off' period in the escalating row between the Hong Kong and Australian governments over air traffic rights.
Senior Qantas and Cathay officials met in Hong Kong last week for talks a week after the two countries imposed tough new restrictions on each other's airlines.
Qantas is understood to be proposing a six-month extension of existing air service agreements between the two countries to allow time for further negotiations, a source close to the talks said.
But Cathay appears to be lukewarm about the plan, saying Qantas already has a two-month extension, until the beginning of July.
The row has escalated sharply since talks broke down in Canberra earlier this month, when the Australian Government refused to agree to a reduction in Qantas' so-called fifth freedom rights on routes from Hong Kong to Bangkok and Singapore.
Fifth-freedom rights allow airlines to carry passengers and freight between destinations outside their home country.