R 030244Z JUL 08
FM AMCONSUL SHANGHAI
TO SECSTATE WASHDC 6964
INFO AMEMBASSY BEIJING 
AMCONSUL HONG KONG 
AMCONSUL CHENGDU 
AMCONSUL SHENYANG 
AIT TAIPEI 1094
AMCONSUL GUANGZHOU 
DEPT OF COMMERCE WASHINGTON DC
DEPT OF TRANSPORTATION WASHINGTON DC
AMCONSUL SHANGHAI

UNCLAS SHANGHAI 000256 
 
TRANSPORTATION FOR OFFICE OF AVIATION AND INTERNATIONAL AFFAIRS (X-50); 
USDOC FOR DAS KASOFF, MELCHER, MAC/OCEA 
 
E.O. 12958: N/A 
TAGS: EAIR PREL ECON SOCI CH TW
SUBJECT: COUNTDOWN TO CROSS-STRAIT FLIGHTS: VIEW FROM SHANGHAI 
 
(U) This cable is sensitive but unclassified and for official 
use only.  Not for distribution outside of USG channels or via 
the internet. 
 
¶1.  (SBU) SUMMARY:  Shanghai is watching closely as China and 
Taiwan prepare to implement a recently negotiated agreement 
launching weekend cross-Strait charter flights and opening 
Taiwan to Mainland tourists.  Local travel companies Shanghai 
Airlines and Shanghai CYTS Tours seem positive on the 
opportunity to offer improved travel options and hopeful that 
initial successes may translate into significant future profits. 
 Despite numerous restrictions on Mainland travelers and likely 
competition for seats from the Taiwan business community, the 
chance to visit Taiwan appears to be generating some interest 
among average Chinese citizens.  END SUMMARY. 
 
----------- 
BACKGROUND 
----------- 
 
¶2.  (SBU) On June 12, Taiwan's Straits Exchange Foundation (SEF) 
and China's Association for Relations across the Taiwan Strait 
(ARATS) reached consensus on launching weekend charter flights 
on July 4 and opening Taiwan to Mainland tourists on July 18. 
The Chinese cities participating in the flight arrangement will 
include Beijing, Shanghai, Xiamen, Nanjing, and Guangzhou.  In 
Shanghai, Shanghai Airlines and China Eastern Airlines will 
operate the Taiwan-bound flights.  On June 26, Econoffs and Econ 
FSN met with Yu Heng, Director for Taiwan, Hong Kong and Macao 
Affairs at Shanghai Airlines, who provided an upbeat assessment 
of his company's logistical preparations for the cross-Strait 
flights and expectations for the program's future.  (China 
Eastern, a partially state-owned firm, declined to speak with 
ConGenOffs.)  Separately, Econ FSN spoke with Jinjiang Travel 
and Shanghai CYTS Tours, the two major travel agencies in 
Shanghai handling Taiwan tours. 
 
------------------- 
CLEARED FOR TAKEOFF 
------------------- 
 
¶3.  (SBU) Yu confirmed that Shanghai Airlines' charter flights 
between Shanghai and Taipei will commence July 4, and eventually 
total 18 round-trip flights, Friday through Monday, per weekend. 
 All will depart from Pudong International Airport, selected 
over Hongqiao Airport for its capacity to accommodate the 
additional traffic.  Initially, the majority of the flights will 
land at Taipei's Songshan Airport, although nearby Taoyuan 
International Airport may play a larger role in the future. 
 
¶4.  (SBU) Yu noted that logistics cooperation between the two 
sides has been relatively smooth.  Both pilots and crew have 
been able to obtain necessary visas through a special channel. 
Meanwhile, Shanghai Airlines and Taiwan's EVA Air have agreed to 
provide landing and technical assistance to the other's arriving 
flights at Pudong and Songshan/Taoyuan Airports, respectively. 
While EVA Air lacks representation at Pudong, Shanghai Airlines 
has a representative at Songshan to facilitate the arrangement 
and is negotiating with EVA Air to have another assigned to 
Taoyuan. 
 
¶5.  (SBU) Though the Taipei-bound flights no longer need to land 
in Hong Kong, they must still traverse Hong Kong air space, 
bringing total travel time to approximately 2 hours and 45 
minutes.  Yu optimistically expects negotiations between Chinese 
and Taiwan authorities will result in a direct air route within 
a few months, reducing flying time to a mere 70 minutes. 
 
--------------- 
SALES ARE BRISK 
--------------- 
 
¶6.  (SBU) Yu reported strong sales, with 90 percent of seats on 
Shanghai Airlines' flights already taken.  The company is 
charging RMB 3700 (USD 540) for individual roundtrip tickets and 
RMB 2600 (USD 380) and up for group tickets offered through tour 
packages.  As things stand, individual travel is more difficult 
to arrange, requiring approval from both Taiwan and Mainland 
authorities as well as a Taiwan-issued tourist visa.  Still, the 
majority of sales have been to individual customers from the 
Taiwan business community in Mainland China.  This is largely 
because, with the exception of an inaugural tour that leaves 
July 4, Mainland tours to Taiwan will not begin until July 18. 
Additionally, China Eastern is positioning itself to take a 
greater share of the tour group market.  Shanghai Airlines 
expects increased demand from Mainland residents after more 
tours begin, and hopes scheduled flights might constitute the 
next stage of cross-Strait travel agreements, perhaps after the 
Olympics.  Yu did not have a clear sense of foreign passenger 
interest in the charter flights.  It is his understanding, Yu 
stated, that foreign passengers are eligible to fly on the 
cross-Strait charter flights, but the company has not received 
clear guidance on this from the government. 
 
---------------------- 
HEALTHY TOURIST DEMAND 
---------------------- 
 
¶7.  (SBU) In separate conversations, Econ FSN spoke with local 
travel agencies to discuss application procedures and gauge 
interest in Taiwan travel.  Jinjiang Travel is currently taking 
reservations for trips beginning July 18, but has not finalized 
the details for the tour packages it will offer.  Shanghai CYTS 
Tours, on the other hand, will send the first all-Taiwan tour to 
Taipei on July 4, and is offering 8 day (RMB 8800, or USD 1282) 
and 10 day (RMB 12880, or USD 1876) packages.  Shanghai CYTS 
reported that bookings for its Taiwan tours have been better 
than expected.  The majority of participants are senior 
citizens, which the agency attributes to a curiosity or affinity 
toward Taiwan resulting from years of Mainland Cold War 
mentality. 
 
¶8.  (SBU) A number of regulations govern Chinese eligibility and 
behavior during travel to Taiwan.  Chinese from 13 provinces may 
take advantage of the program, but must hold a hukou permit as 
proof of residency in those 13 provinces.  Applicants are 
required to submit copies of their permit and personal ID card, 
a certificate of employment, detailed background information, 
and three photos.  Agencies are barring Chinese with "political 
issues" and government employees from participating, the latter 
restriction to encourage ordinary citizens to travel to Taiwan. 
Tourists will be required to put down a deposit -- likely to be 
a whopping RMB 50,000 (USD 7283) -- refundable on their return 
to China, though this requirement has been waived for July 4 
tour participants.  Tourists must remain with their tour group 
for the duration of the trip. 
 
------- 
COMMENT 
------- 
 
¶9.  (SBU) Despite the travel restrictions and likely competition 
for seats from the Taiwan business community, the chance to 
visit Taiwan appears to be generating some Mainland interest. 
Shanghai Airlines and Shanghai CYTS Tours, on the whole, seem 
positive on the opportunity to offer improved travel options and 
expanded Taiwan tourism, and hopeful that initial successes 
might translate into bigger profits in the future. 
 
JARRETT