FedEx, UPS win Hong Kong air rights

FedEx Corp. and United Parcel Service were the big winners when the U.S. Department of Transportation tentatively awarded six airlines Monday the right to operate all-cargo services between Hong Kong and other cities outside the U.S.

FedEx and UPS together received tentative rights to 25 of the 40 additional slots available to U.S. cargo carriers under a new bilateral agreement. The express carriers each won the right to six flights immediately to their Asia regional hubs in the Philippines. They have already been operating those flights under interim authority granted by DOT last November.

In addition, FedEx and UPS will each be able to offer six flights between Hong Kong and their European hubs, effective Oct. 28. FedEx will route its flight to its hub in Paris via Mumbai, while UPS will fly to Cologne, Germany, via Mumbai or Dubai. FedEx will also be able to offer a seventh flight to its Asian hub at Subic Bay in the Philippines on Oct. 28.

Northwest Airlines received the right to operate four all-cargo flights between Manila and Hong Kong, effective immediately. Other winners included Evergreen International Airlines, awarded the right to one flight to Seoul, effective immediately, and a second, as of Oct. 28; Kalitta Air, one flight now to Seoul and two to Dubai, with another to Seoul as of Oct. 28; and Polar Air Cargo, two flights each to Seoul and Manila, effective immediately, and another one to Manila, as of Oct. 28.

“This expansion of U.S. all-cargo services in the important and growing Hong Kong air freight market will provide enormous benefits not only for the carriers involved but for shippers and the economies of both sides,” Transportation Secretary Norman Y. Mineta said. “These benefits will increase still further next year when our expansive agreement with Hong Kong permits even more new service opportunities.”

Objections to the department’s tentative decision are due in 14 days, with answers to objections due seven days afterward. The department will then issue a final decision, but it generally does not revoke rights tentatively awarded.

The bilateral agreement with Hong Kong also permits DOT to allocate 16 additional flights to U.S. carriers, effective October 2004. That will mean a total of 56 new flights for U.S. cargo operators, compared to just eight before last fall’s agreement. FedEx operated five of those flights to Subic Bay, while Polar offered three to Seoul.

FedEx had sought five flights to Seoul, while UPS had asked for six additional flights to its Asian hub at the former Clark Air Force Base in the Philippines.

Hong Kong is one of the world’s largest cargo markets thanks to its proximity to China’s Pearl River Delta manufacturing center. U.S. air imports from Hong Kong totaled approximately 280,000 pounds in 2001, more than double the 120,000 pounds in U.S. air exports to Hong Kong, according to the DOT order.