Dragonair Gets Nod to Fly Five New Asia Routes.

Byline: Charlie Zhu

Dec. 5--Hong Kong Dragon Airlines Ltd has obtained clearance to fly five new Asia-Pacific routes, intensifying its head-to-head rivalry with the territory's biggest carrier Cathay Pacific Airlines.

Hong Kong granted Dragonair the right to fly to Seoul, Tokyo, Manila, Bangkok and Sydney -- mainstay routes for Cathay, which holds a minority stake in its rival.

But Dragonair faces turbulence ahead after Taiwan gave final approval yesterday for charter flights between Taipei and Shanghai, a core market for the Hong Kong carrier owned 43.29 percent by Beijing-backed China National Aviation Co (CNAC).

Analysts downplayed the threat to the Cathay, which is much larger and has plenty of resources to defend its turf.

But Dragonair and Air Macau -- also partly owned by CNAC -- are currently the only airlines allowed to fly between Taiwan and the mainland, with a stopover in Hong Kong. The prospect of direct flights between the political rivals is seen as a threat to one of CNAC's most profitable business lines.

The start of charter flights, for now limited to the Chinese New Year holiday period, may herald the removal of a decades-old ban on direct air, postal and shipping links between Taiwan and mainland China, analysts have said.