Hong Kong Dragon Airlines (Dragonair) was due to launch its first new route in nearly two years this morning with flights to the southern Taiwanese port city of Kaohsiung.
The 11-year-old carrier, which last month came under control of Beijing-backed China National Aviation Corp (CNAC), won the rights to Kaohsiung under a new commercial air agreement between Hong Kong's Cathay Pacific Airways and Taiwan's China Airlines struck last year.
The agreement, which opened up the lucrative routes between the territory and Taiwan to Dragonair and Taipei-based Eva Airways, was approved by China on June 7.
The approval came just three days before CNAC purchased its 35.86 per cent stake in the regional carrier from Swire Pacific, Cathay and fellow Beijing-backed company Citic Pacific. The airline is now 64 per cent owned by Chinese-backed concerns.
Dragonair, which launched its last new route in November 1994 - to Kuching in Malaysia - will operate three flights a day to Kaohsiung.
The flights will be run with Airbus Industrie A330s in a two class configuration with 300 seats - 36 in first class and 264 in economy class.
Cathay, because of a Hong Kong Government policy allowing only one territory airline to fly a particular route, will drop services to Kaohsiung and expand Taipei services to 106 flights per week.