Taiwan's transportation industry is well positioned to benefit from the gradual opening of direct links with China, which was advised by the cross-strait panel under the Economic Development Advisory Conference over the weekend, industry analysts say.
The panel, which will hand in its conclusions to the general conference for consideration by Aug. 15, resolved that the opening of direct trade links should begin with sea and air cargo. That would later be followed by passenger travel, according to reports in the Chinese-language media.
Stocks of Taiwan's two largest carriers, China Airlines Co (
Shipping stocks also soared yesterday on the news, with local giants Yan Ming Marine Corp (
Once air links are opened, Taiwan airlines are likely to fare well against their potential Chinese rivals for cross-strait passenger routes, according to Peter Hilton, an airline analyst at Credit Suisse First Boston in Hong Kong.
Passenger "market share might drift a bit to the Taiwanese carriers simply because the quality of the competition it'll be up against won't be perceived as good," Hilton said.
The market for cross-strait air service is massive. Last year over 2.5 million people traveled across the Strait, said Nieh Kuo-wei (
Nieh expects that number to double or even triple once direct links are established.
But on cargo, Hilton said the Chinese might sniff an opportunity and price cargo space low to secure the lion's share of the market.
Long awaiting the policy change that would open up the huge Chinese market, Taiwan's airlines and shipping companies haven't been idle.
China Airlines CEO Christine Tsung (
Tsung will be joined at the ceremony by Far Eastern Air Transport Corp (遠航) Chairman Stephen Tsui (崔湧), whose company has also invested in the construction of the terminal, along with EVA Air and Taiwan Airport Service Co Ltd (台灣航勤), which is a subsidiary of China Airlines.
According to Oxford Tang, an airline analyst at ABN Amro in Hong Kong, the modest investment allows "Taiwanese airlines to get a foothold in the China and is the first move of plans to expand within the market."
The shipping industry, the other major beneficiary of a lifting of the ban, hasn't been idle either.
The president of Yang Ming Marine, Chen Ting-hui (
The delegation will include the vice president of the Evergreen Group, Lin Hsing-san (
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