Hong Kong-Australia: Virgin Australia enters with HNA alliance, but traffic rights unlikely to grow
Virgin Australia's entry into Hong Kong marks a significant expansion for its strategy and partnership with China's HNA Group. The growth also raises the matter of the Hong Kong-Australia air service agreement.
Hong Kong has exhausted its traffic rights to primary Australian cities and has sought more. Australia, however, has used only half of its allotment, not needing to expand the agreement and receive more traffic rights. Australia has sought other growth mechanisms to transform Hong Kong into a hub for Australian operators in the way that Singapore and Dubai have done.
Hong Kong has protected its geographical opportunity and not given Australia other rights. A stalemate has ensued. Virgin Australia's entry, however, means that Australia will use its traffic right allotment faster, accelerating the window for an air service agreement expansion.
Australia argues that, following its liberalised agreement with mainland China, Hong Kong – under a separate aviation framework – should logically follow suit. Despite the seeming similarities, they are two different markets. Ignored from both sides is what the broader market – and not a specific hub – would gain through liberalisation.
To access CAPA Premium Analysis you need a CAPA Membership
Your window into the latest insights
CAPA employs an industry-leading Analyst team based in Europe, North America, Asia and Australia who offer unique perspectives and independent and accurate commentary of critical industry developments globally. CAPA Members rely on our Analysis to unlock valuable insights and actionable intelligence to keep ahead of the game.
Big picture strategic view
Our Analysts don’t just report the news - they take a big picture strategic view of aviation dynamics, issues and trends and analyse the implications of these developments for you.
The CAPA Analyst team is based globally to ensure our CAPA Members have access to independent, unique perspectives covering an entire spectrum of daily, worldwide commercial aviation developments.
Customise your Alerts
CAPA Members can use CAPA Alerts to receive daily, weekly or monthly and customised updates on our Analysis.
I'm very impressed by the factual and detailed analysis CAPA is always doing.- CEO, Airline Member
Phone: +61 2 9241 3200 | Email: email@example.com