China-Taiwan aviation transit policy would allow progressive increases for Taiwan's airlines

Beijing has finally released a proposal allowing Taiwanese airlines to carry transfer traffic from mainland China, bolstering the burgeoning Taipei Taoyuan hub. This comes as a possible sweetener with a Taiwanese general election to be held in in Jan-2016. The election so far looks likely to deliver a victory to a party that is not in favour of closer ties with mainland China, amid Taiwanese sentiment that cooperation has not delivered benefits - hence the offer of transfer traffic rights to Taiwanese carriers.

Whatever impact this has on the public, the granting of increased transfer traffic rights was expected to occur at some point, although in late 2015 it was postponed. Unsurprisingly, the proposed programme is starting small, with Taiwanese carriers able to transfer traffic out of three cities: Chongqing, Kunming and Nanchang. These are not primary points - the biggest, Chongqing, is Taiwanese airlines' 22nd most served mainland point - but transfer traffic could help Taiwanese carriers sustain service to smaller cities, where point-to-point demand is thin and there is room to boost load factors - unlike the situation on Beijing and Shanghai. Gradual expansion of the programme is expected, as seen with the recent growth of China's transit without visa policy. Significant impacts are some time away, but finally there is movement.