A KEY airline services agreement concluded with Cathay Pacific Airways and the Taiwan Airlines Association has opened up the lucrative Hong Kong-Taiwan routes to new carriers. The deal has broken a major barrier to a new five-year commercial agreement that could extend past the handover of Hong Kong to China. The agreement was announced yesterday after talks between Cathay, the Taiwan Airlines Association, China Airlines, Eva Airways and TransAsia Airways. The parties involved warned certain details, such as routes, schedules and capacity, still needed to be worked out. If signed, the new arrangement would take effect on October 30, with Hong Kong Dragon Airlines (Dragonair) being allowed access to Taiwan and an unnamed Taiwanese carrier would be allowed access to Hong Kong, breaking the virtual monopolies on the lucrative routes held by Cathay and Taiwan's China Airlines. Taiwan Civil Aeronautics Administration director-general Tsai Ching-yen said Cathay representatives 'expressed clear agreement that, in principle, the Hong Kong and Taiwan sides can appoint two airlines to operate Taiwan-Hong Kong routes'. 'The Hong Kong side's second carrier will be Dragon Airlines, pending only approval from Taiwan civil aviation authorities,' he said. Mr Tsai said the Taiwanese had yet to appoint its second carrier. It was expected to be Eva, however. Mr Tsai said the two sides would hold discussions to work out remaining details by the end of August. Cathay spokesman Kwan Chuk-fai said sister-airline Dragonair still needed to be informed of the agreement and denied that Cathay had opposed new entrants. 'We always survive in competitive situations.' He would not say if prices would be lowered as a result. A Taiwan aeronautics administration spokesman said the two new entrants would be operating new flights and that the existing number of flights operated by Cathay and China Airlines would not be affected. Cathay operates 12 flights a day to Taipei and three to Kaohsiung.