The new air services agreement (ASA) struck this week between Hong Kong and China may represent a significant liberalisation of aviation rights but it pales in comparison with what other countries have been able to prise recently from mainland authorities. It represents a great opportunity for smaller airlines looking to fly to second-tier destinations but access to China's main commercial centres, the criteria by which any agreement is judged, remains highly restricted to Hong Kong carriers. In fact, the deal leaves open the possibility that Cathay Pacific Airways' much ballyhooed entry into the Shanghai passenger market will be delayed beyond October 2006 - the date stated in the deal - unless the Sino-Hong Kong negotiators return to the table before then to hammer out more frequencies. According to the deal, the number of flights between Hong Kong and Shanghai are to be expanded 16.6 per cent by 2006, to 98. Dragonair already operates 84 of those flights and is fully entitled to apply for more before Cathay becomes eligible. And that is what it intends to do. 'We expect to apply for increased services, both passenger and cargo to Shanghai but it is too soon to have specifics,' it said in a statement yesterday. While Cathay could lobby the Civil Aviation Department, which distributes the frequencies, to hold the allocation of the 14 extra flights to make its entitlement practical rather than theoretical, any decision to do so would be without precedent. The government said on Wednesday one of its objectives when negotiating the new agreement was to strike a deal which could be implemented immediately. Hong Kong's biggest airline will be equally worried that, with 196 flights a week flown by both sides on the sector, any future requests for additional frequencies could be rejected by mainland authorities, claiming the market is saturated. While the deal by 2006 will add 386 other weekly flights for Hong Kong carriers to China, none can be transferred to the Shanghai-Hong Kong route if they go unused on less-profitable sectors. Likewise, a doubling of weekly cargo flights to 42 looks good on the surface. But only seven of the extra 21 flights will be allowed to serve Shanghai, the only market which can commercially support 100-tonne capacity aircraft of the type operated by Dragonair and Cathay. In contrast, before the end of the year US carriers will launch 21 extra cargo flights a week to Shanghai under the July Sino-US agreement won by Washington. The four US cargo carriers with rights to China - Polar, FedEx, UPS and Northwest - were not restricted as to the destination of those rights and will pour more capacity into the sector in March when the second tranche of awards become available. Only mainland airlines were awarded coveted fifth-freedom rights - the ability to pick up passengers and cargo in Hong Kong bound for third countries. They are called 'through-running rights' in the agreement because technically Hong Kong and China are the same country. The government says this was because no one from the Hong Kong side formally asked them to negotiate for those rights. With Hong Kong's major airlines having a tough time increasing their access to China, they probably did not want to lessen the slim chances they had of additional point-to-point services by appearing greedy. But it is hard to call the Hong Kong-Sino deal liberal when you take into consideration that reportedly less-favoured nations such as Malaysia, Australia and the US all walked away with beyond rights through the mainland. Theoretically, there are no longer restrictions on the number of Hong Kong carriers that can fly to the mainland. However, only two may ply each route, compared with one before the deal was signed. The question is whether the added competition will mean savings for the consumer. According to one analyst, the answer is no. 'There isn't going to be any new competition,' he said. '[The deal] hasn't opened any of the major routes at all. All it's done is liberalise the secondary routes which none of the big carriers want to fly because they are so commercially thin. It is a very illiberal agreement.'