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Logistics firms see direct cross-Strait links as good business
Updated: 2008-11-05 23:18

BEIJING  -- Agreements on direct flights and shipping, signed on Tuesday in Taipei, are drawing strong interest from airlines and shipping companies from the mainland and Taiwan.

"Regular charter flights, instead of flights only weekends and festivals, were our long-term expectations," said Liu Shaoyong, the general manager of mainland-based China Southern Airlines. "Direct air routes are very good for our business."

A flight from the mainland to Taiwan via Hong Kong under the current arrangement takes two hours and 42 minutes and burns 16 tonnes of fuel. Under the new arrangement, flights will take 69 minutes and burn 7.3 tonnes of fuel.

"Less travel time and expense benefits both passengers and airlines," Liu said.

Wei Hsing-Hsiung, chairman of the board of Taiwan-based China Airlines, was glad to see the number of passenger charter flights increase from 36 on weekends to 108 a week.

"We have profits of about 1.5 million US dollars from weekend charter flights. The figure is likely to reach 5 million dollars due to more flights, while the cost might fall by 20 percent as the route is shorter," he said.

The new agreement only opened one direct air route, between Shanghai and Taipei. Xiamen, the coastal city in southeastern Fujian Province directly opposite to Taiwan, was not included.

"We are expecting more air routes," said Yang Guanghua, general manager of Xiamen Airlines.

The flight distance between Xiamen and Taipei will be one third shorter than at present and the flying time will be about half, he said.

The two sides said in the agreement that they are going to negotiate another route linking the southern part of Taiwan with the mainland.

To cope with increasing flights, Yang's company plans to use 10 more passenger planes next year, he said.

Taiwan's senior economic official Shih Yen-shiang told the local daily China Times on Wednesday that he estimated every direct trip across the Strait could save companies 300,000 New Taiwan dollars (about 9,000 US dollars).

"Based on 4,000 trips a year, 1.2 billion dollars will be saved," he said.

Under the new agreement, the mainland and Taiwan will exempt each other's shipping firms from business and income taxes.

For the container divisions of Taiwan's three leading shipping lines -- Evergreen Marine, Wan Hai Lines and Yang Ming Group -- 60 percent could be related to the mainland. Tax cuts will save each 2 to 3 billion NT dollars, another local newspaper, the Commercial Times, said.

Ningbo of eastern Zhejiang Province was one of the 63 ports that the mainland opened to Taiwan ships.

"The most direct effect will be increasing cargo volume," said Tong Mengda, chief economist of Ningbo Port Holding. "The voyage to Taiwan has been cut from 25 hours to ten. This is good for both shipping companies and ports."