Hong Kong has signed an open-capacity arrangement on air services with Malaysia, the first of its kind with an Asian partner.

The deal provides an open regime for both places' airlines to operate as many passenger and cargo services between Hong Kong and anywhere in Malaysia as they wish, without any limitation on routing, type of service, or aircraft.

Delegations from the two sides reached the agreement today after two days of negotiations in Kuala Lumpur.

Deputy Secretary for Economic Development & Labour Wilson Fung said he was pleased with the outcome.

"The new open-capacity regime accords full flexibility for airlines of the two sides to plan ahead and expand their services in response to market demands. With a view to expanding further our bilateral aviation relationship, we have reached agreement with the Malaysian Government to enable airlines of Malaysia to operate all cargo services beyond Hong Kong to the United States.

HK airlines get fifth-freedom rights

"The new services will enhance competition in this long-haul market. This is in the best interest of Hong Kong's shipping community and reflects the Government's determination to support the development of Hong Kong's logistics industry. In return, airlines of Hong Kong get very flexible and valuable fifth-freedom rights to operate beyond Malaysia," Mr Fung added.

He encouraged Hong Kong and Malaysian airlines to make use of the liberal regime to introduce new services between the two places, and beyond to other destinations.

Malaysian airlines are also invited to use Hong Kong as their hub for trans-Pacific all-cargo services, Mr Fung said, adding that this will enhance our status as an international aviation hub.