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To: ms.smartest.person who wrote (4416)	1/9/2001 11:35:51 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 4541

UPS Says It Plans Manila Hub With Hong Kong Cargo Rights January 10, 2001 Business and Finance - Asia UPS Says It Plans Manila Hub With Hong Kong Cargo Rights By ZACH COLEMAN Staff Reporter of THE WALL STREET JOURNAL HONG KONG -- Facing heavy competition from other U.S. airlines vying for rights to provide cargo service to Hong Kong, United Parcel Service Co. has indicated it would open a new hub in Manila if it wins, although a company spokesman restated UPS's commitment to its existing regional hub in Taipei. Since UPS first applied to the U.S. Department of Transportation Nov. 29, five other airlines, including FedEx Corp. and Northwest Airlines, have joined the contest for rights to deliver cargo. The winner will be allowed to carry local traffic between Hong Kong and either South Korea, Thailand or the Philippines three times a week. In responses filed to the new applications last month, UPS said if it is successful, it would use the rights "to create a true all-points Asia hub, similar to those it has established in Europe and the United States" rather than simply add one more link to its network. "Should UPS be awarded the authority requested herein, it would immediately undertake the steps necessary to connect the Philippines to Hong Kong, Japan, Taiwan, Southeast Asia and Europe," it told the regulators. "By virtue of its strategic geographic location and its liberal aviation environment, the Philippines offers region-wide connectivity." However, company spokesman Steve Monaghan said UPS uses the term "hub" in different ways, including just designating a city where the delivery service transfers packages directly between two UPS flights and has no sorting operations. "We've been very happy with Taipei," he said. "We have no plans to put a [major] hub in Manila at present. We're actually investing in expansion in Taipei," he said, pointing to UPS's participation in a consortium with China Airlines that successfully bid last year to privatize and operate the cargo terminal at Taipei's Chiang Kai-shek International Airport. UPS's filings suggest the company would keep its existing hub in Taipei for trans-Pacific operations. UPS opened its Asian operations hub at Chiang Kai-shek International Airport in 1997. Although Taiwan has an "Open Skies" agreement with the U.S. that gives UPS significant freedom to operate, UPS is blocked from flying between Taiwan and China by the political impasse between those two governments. Lacking rights to carry local traffic itself to Hong Kong, UPS has to rely on space available in the bellies of commercial jets to connect the city to its Taipei hub. Courier DHL Worldwide Express last year moved its Asian hub from Manila to Hong Kong; the rights now being contested were previously used by Continental Micronesia Airlines to operate flights between Manila and Hong Kong on DHL's behalf. FedEx uses the other five service rights under the restrictive U.S.-Hong Kong aviation agreement to connect Hong Kong to its hub at Subic Bay, the Philippines. The other carriers challenging UPS are Evergreen International Airlines, Polar Air Cargo and Gemini Air Cargo. Gemini, the newest applicant, is the only one that would use the rights for service between Hong Kong and Bangkok. The airline, which to date has only operated freighters with its own pilots on behalf of other airlines, says it would use the rights for a round-the-world cargo service with DC-10 and MD-11 planes. Gemini's flights would circle eastward from Los Angeles to New York, Brussels, New Delhi, the Malaysian island of Penang, Bangkok, Hong Kong, Guam and Honolulu before ending up back in Los Angeles. Write to Zach Coleman at zach.coleman@awsj.com1 -------------------------------------------------------------------------------- URL for this Article: interactive.wsj.com Hyperlinks in this Article: (1) mailto:zach.coleman@awsj.com -------------------------------------------------------------------------------- Copyright © 2001 Dow Jones & Company, Inc. All Rights Reserved. Printing, distribution, and use of this material is governed by your Subscription Agreement and copyright laws. For information about subscribing, go to wsj.com Subscription may be required to view article. Used with permission from The Wall Street Journal, WSJ.com. Copyright 200__ Dow Jones & Company, Inc. All rights reserved.