The article below from NYTimes.com has been sent to you by psa188@xxxxxxxxx /--------- E-mail Sponsored by Fox Searchlight ------------\ I HEART HUCKABEES - OPENING IN SELECT CITIES OCTOBER 1 From David O. Russell, writer and director of THREE KINGS and FLIRTING WITH DISASTER comes an existential comedy starring Dustin Hoffman, Isabelle Hupert, Jude Law, Jason Schwartzman, Lily Tomlin, Mark Wahlberg and Naomi Watts. Watch the trailer now at: http://www.foxsearchlight.com/huckabees/index_nyt.html \----------------------------------------------------------/ Deal Preserves Hong Kong's Hub Status September 9, 2004 By KEITH BRADSHER HONG KONG, Sept. 8 - Beijing agreed on Wednesday to allow more flights from here to cities across China, a step that promises to make air travel to China easier, less expensive and possibly safer. The deal could also influence legislative elections here on Sunday in which relations with the mainland are the main issue. The pact strengthens Hong Kong's role as Asia's busiest hub for international air travel at a time when it faces new competition. An enormous rival, Baiyun International Airport, opened three weeks ago just 80 miles up the Pearl River in Guangzhou. By addressing Hong Kong's lingering nervousness about losing its role as the gateway to China, Wednesday's agreement could help pro-Beijing candidates against their pro-democracy rivals in the elections on Sunday. China has offered several economic plums to Hong Kong in the last 15 months in an attempt to tamp down calls for greater democracy in this former British colony. Other deals have included a relaxation of exit visa restrictions for travel here, which has brought a flood of mainland tourists into Hong Kong, and a free trade pact. Sandra Lee, who oversaw the negotiations as Hong Kong's permanent secretary for economic development, said that participants had been working as fast as possible to conclude a deal ever since the talks began in December. Without mentioning Baiyun Airport, Ms. Lee said that Wednesday's agreement would help Hong Kong by making sure that travelers could reach many Chinese cities with much greater frequency from here. The accord will increase the number of seats available on flights from here to the mainland by 30 percent, with most of the increase taking place on flights to second-tier cities, and will double the number of air cargo flights. "Increasing the density of the network is an important step toward enhancing our competitiveness," she said. United Airlines, a unit of UAL, announced last week that it was seeking authority to begin daily, nonstop flights to Baiyun Airport from San Francisco. Until now, Hong Kong has been the main airport for China's Pearl River delta region, which is China's wealthiest region because Deng Xiaoping started his experiment with capitalism in 1979 in cities across the border from Hong Kong. The management of Baiyun Airport had no criticisms of Hong Kong's air rights agreement. "This is very innovative and worth learning from," said Qi Yaoming, the publicity director of the Guangdong Airport Management Company. Cathay Pacific, which is the dominant carrier here and has chafed at restrictions on its flights to mainland destinations, welcomed Wednesday's deal and called for a further relaxation on flights. "In order to defend the competitiveness of Hong Kong International Airport as the predominant hub in the region, it is essential that the pace of liberalization of air links between Hong Kong and the mainland catches up with that seen between China and the rest of the world," the carrier said in a statement. "This is vital for the overall interest of Hong Kong - not just one or a number of airlines." The national government has been trying to help second-tier cities, especially in the interior, as Beijing, Shanghai, Guangzhou and other cities near the coast have boomed. But providing daily service to some of the less-known cities, instead of flights twice a week, is important to preserving Hong Kong as a hub for China. For cities that have only one or two flights a day, the new accord will authorize as many as four or five a day. The agreement, which will be phased in over the next two years, allows flights to go from here to a second-tier city and then on to another second-tier city before returning to Hong Kong, instead of coming straight back. The pact also calls for code-sharing between mainland and Hong Kong-based carriers. But the agreement calls for only modest increases in passenger flight schedules from Hong Kong to Shanghai and Beijing, the highest-volume and most lucrative routes. Cathay Pacific has wanted to greatly expand its service to these cities, but such competition would cut into the profit margins of carriers that are partly or entirely owned by the Chinese government and currently dominate the routes. Wednesday's pact also does little if anything to help European and American carriers. The agreement allows additional flights by mainland Chinese carriers and by airlines based in Hong Kong that make most of their decisions in Hong Kong and have mainly Hong Kong shareholders. The agreement could actually increase competition for European and American carriers, because it gives mainland carriers the right to increase the number of flights that originate on the mainland, make a stop in Hong Kong and then continue to overseas destinations. While Cathay Pacific has struggled for the rights to operate more flights to the mainland, it has been the main beneficiary of Hong Kong's reluctance to approve "open skies" agreements with other countries. Such agreements would allow other carriers, especially American carriers, to operate more flights to and from Hong Kong. Long-haul flights out of Bangkok and Singapore are often less expensive. Wednesday's agreement grew out of an annual review of the four-year-old agreement that governs air traffic between the mainland and Hong Kong, which Britain returned to Chinese rule in 1997. Ms. Lee said that the agreement was not an attempt to increase the value of the Hong Kong Airport Authority, which the government hopes to privatize as part of an effort to plug a budget deficit here. http://www.nytimes.com/2004/09/09/business/worldbusiness/09beijing.html?ex=1095736354&ei=1&en=d7864a8c90d91582 --------------------------------- Get Home Delivery of The New York Times Newspaper. 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