*EPF509 09/12/2003
Text: U.S. Makes Selection for New Hong Kong Cargo Flight Rights
(Department of Transportation September 12 news release) (690)

Following is the text of a September 12 Department of Transportation (DOT) press release on the agency's selection of six airlines to operate new all-cargo air service between Hong Kong and third-country cities as a result of last year's U.S.-Hong Kong air-service rights expansion agreement:

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Friday, September 12, 2003
Contact: Bill Mosley, (202) 366-5571
DOT 109-03
DOT Selects Carriers For Hong Kong All-Cargo Service

Following last year's agreement expanding U.S.-Hong Kong air-service rights, the U.S. Department of Transportation (DOT) today selected six airlines to operate new all-cargo air service between Hong Kong and third-country cities in conjunction with their U.S.-Hong Kong services. DOT's action makes final, with one modification, its tentative decision of July 14.

Carriers selected to operate new or expanded service are Federal Express, United Parcel Service (UPS), Evergreen International Airlines, Kalitta Air, Northwest Airlines and Polar Air Cargo. All carriers filing applications have a share in the new opportunities. The new services increase U.S.-carrier all-cargo flights between Hong Kong and third countries from the eight weekly round-trip flights available prior to last year's agreement up to a new weekly total of 48.

In October 2002, the United States and Hong Kong reached agreement on a broad expansion of both passenger and cargo air services. The agreement included a large increase, in three phases, in U.S. airline rights to provide all-cargo services between Hong Kong and third countries (known as "fifth-freedom services"). On Nov. 22, the department, in order to take advantage of the new rights as soon as possible, allowed Federal Express, Northwest, Polar and UPS to operate services on a temporary basis while DOT considered applications in the proceeding. Today's final decision awards on a long-term basis the fifth-freedom rights that were available at the time the agreement was reached as well as those that may begin Oct. 26, 2003. The department will allocate in a separate proceeding the 16 weekly flights available in next year's third phase of the expansion.

In evaluating the applications, the department sought to maximize public benefits by expanding service choices for U.S. shippers in both express and general cargo service, strengthening competition among U.S. carriers as well as among U.S. and foreign carriers in the Pacific rim region to the benefit of U.S. shippers, enhancing route systems and hub connection possibilities to improve efficiency and service, and promoting new entry into the fifth-freedom market.

In its final decision, the department, at Polar's request, modified the tentative decision by allowing the carrier to transfer its two first-year Manila, Philippines, flights to service to Delhi, India beginning Oct. 26. DOT also granted Polar a second-year weekly flight to Delhi, instead of to Manila as in the tentative decision. As a result, Polar will operate three weekly flights for India/Malaysia-Hong Kong service in the second year instead of three flights to Manila. The final decision allocates the new Hong Kong round-trip flights available now and on Oct. 26 as follows:

Federal Express -- now: six flights to Subic Bay, Philippines; on Oct. 26: six flights to Paris -- one flight via Mumbai, India -- and one to Subic Bay.

UPS -- now: six flights to Macapagal, Philippines; on Oct. 26: six flights to Cologne, Germany, via Mumbai or Dubai, United Arab Emirates.

Evergreen -- now: one flight to Seoul, Korea; on Oct. 26: one additional flight to Seoul.

Kalitta -- now: one flight to Seoul and two to Dubai; on Oct. 26: one additional flight to Seoul.

Northwest -- now: four flights to Manila; no additional Oct. 26 flights.

Polar -- now: two flights each to Seoul and Manila; on Oct. 26: one flight to Delhi via Penang, Malaysia, with the two first-year Manila flights transferred to Delhi-Penang service in the second year. The final and show-cause orders, carrier applications and other filings in this case may be obtained at http://dms.dot.gov, docket OST-2002-14049.

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(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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