The failure of last week's air talks between Hong Kong and the United States could dampen bidding for the right to operate the Airport Authority's proposed express cargo terminal. The absence of an expanded air-services agreement means potential terminal operators will be unable to properly plan their future needs at Chek Lap Kok before the bidding deadline on March 15. Given the lack of an outcome from the latest set of talks, the proposed facility is seen as too big for a self-handling single user, as was envisioned in the authority's original tender document handed to the four potential bidders - Federal Express (FedEx), United Parcel Service (UPS), TNT Worldwide and DHL Worldwide Express. UPS Asia-Pacific region president Charles Adams said that although it would be costly, the company was interested in the facility. 'It is expensive but, as an end of runway operation, it is interesting to us. They are not making any more land there,' Mr Adams said. What would make the facility a better attraction to UPS and other US carriers, was expansion of cargo fifth-freedom rights, he said. Fifth-freedom rights allow airlines to make an intermediate stop to pick up cargo and passengers while en route to a final destination. In the case of FedEx, that would allow the company to continue using Subic Bay in the Philippines as its main regional hub as well as give it more flexibility in using Hong Kong as a secondary hub. For UPS, Hong Kong would serve as an intermediary hub to its main Asian hub at Clark Airbase in the Philippines and its European hub in Cologne in Germany. 'At the moment, UPS has no fifth-freedom rights out of Hong Kong. That means that, at any one time, three of the four airplanes we operate to Chek Lap Kok are sitting on the ground at the same time,' Mr Adams said. He said the right to self-handling at the new facility was not a critical issue for operators. 'For UPS, it is not a drop-dead issue in terms of our interest in the facility. However, that is not to say that the ability to self-handle is not important to UPS. It is,' he said. Mr Adams said that, at the moment, Hong Kong Air Cargo Terminals had an effective monopoly on handling, which meant ultimate responsibility over the facility in which goods are sorted and redistributed. 'We are precluded from what should be our economic right. What we want is choice to do it ourselves.' Mr Adams acknowledged that, in Asia, self-handling was usually too expensive a proposition for it to be viable. 'There are not enough aircraft movements at most of our airports in Asia to do it,' he said. Most cargo airlines operate only two banks of aircraft movements per day, meaning that there are two short peak-handling times split by a long period of inactivity. 'It is expensive to hire people here for that kind of job - it would be best to have an army of part-timers but that's damn near impossible to get in Asia,' Mr Adams said. 'And it is not just the people. We would have to put in at least US$2.5 million in ground equipment to make a self-handling facility work. 'Until we are able to operate multiple sectors on our flights out of Hong Kong - through expanded fifth freedom rights - we are only going to be doing eight hours of work per day.'