Discussions on Taiwan flights probable part of CNAC visit

The head of state-owned China National Aviation Corp (CNAC) begins a week-long visit to Taiwan today and probably will meet officials due to be involved in future talks on direct flights, a Beijing-controlled news agency says.

Hong Kong-based China News Service said Wang Guixiang, chairman of the commercial arm of the mainland's aviation regulator and chairman of Hong Kong Dragon Airlines (Dragonair) and Air Macau, would spend a week in Taiwan leading a business delegation.

He probably would meet the chairman of the Straits Exchange Foundation, the acting director of the Civil Aeronautics Administration and other aviation industry officials, the semi-official agency said.

Analysts took the news as a sign the two sides were building relations in preparation of a resumption of direct flights between Taiwan and the mainland, which have been banned since 1949.

Most were confused, however, about the timing of the visit, as any indications that direct flights would resume soon would not be in Dragonair's interests as the regional carrier was due to be floated on the stock exchange this year or early next year.

It comes as officials familiar with Dragonair's listing plans confirmed yesterday that CNAC had hired three investment banks to arrange the initial public offering (IPO) of 20 per cent of the company.