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China Airlines to apply for cargo flights to China

China Airlines (華航), the nation's largest air carrier, said it plans to apply for permission to fly cargo to China, after the nation's government eased restrictions on cross-strait transport links.

Taiwan will let airlines operate charter cargo services to China carrying equipment for Taiwanese investments, the Mainland Affairs Council said on June 14. Airlines will not be able to carry finished goods or operate regular services. They will also have to apply for permission for each flight on a case-by-case basis.

The nation's government has restricted direct transport links with China because of political animosity and concern such ties may compromise security. Still, Taiwanese have more than US$100 billion invested in China, which may create demand for cargo flights.

"It will be an important step for us," Johnson Sun (孫鴻文), spokesman for Taipei-based China Airlines said by phone. "Business opportunities will gradually increase as the government eases restrictions on direct links."

The airline will apply for permission for its first flight next month, he added.

Taiwanese manufacturers may charter cargo flights, as they are building factories in China in order to cut costs.

Taiwan Semiconductor Manu-facturing Co (台積電), the world's largest contract chipmaker that has a plant in Songjiang in the Shanghai suburbs, "doesn't rule out" using charter flights, Tzeng Jinn-haw (曾晉皓), a spokesman for the Hsinchu-based firm, said by telephone yesterday. "We often need to ship stuff to [China]."

Direct flights would cut travel times between Taipei and Shanghai to about 90 minutes from five hours. Passengers and freight now have to travel via a third place such as Hong Kong or Macau.

Shares of Air China rose 2.7 percent to close at NT$15.40 (US$0.47) on the Taiwan Stock Exchange. The stock is down 3.5 percent for the year versus a 0.4 percent drop in the benchmark TAIEX index.

The airline was the world's fifth-largest cargo carrier last year, according to the International Air Transport Association.
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