Co-operation between the Hong Kong and Shanghai Pudong airports could create more business opportunities for the two cities.

This was the message from Secretary for Economic Development & Labour Stephen Ip in the Legislative Council today, who said that by complementing each other's strengths the airports could enhance the cities' business environment.

He said both airports are regional hubs and the country's aviation gateways, and competition between them is not significant as both enjoy an extensive aviation network.

"We have also maintained close contact with the relevant Mainland authorities on whether Shanghai is opening up its fifth-freedom traffic rights," he said, adding the Government is monitoring closely the liberalisation of traffic rights at major airports in the region, including those on the Mainland.

The granting of fifth-freedom rights by one country to its aviation partner is to allow the latter's airlines to carry passenger and cargo traffic to and from a third jurisdiction.

However, such operators must also secure the necessary fifth-freedom rights from the third jurisdiction before traffic can be carried. The extent of additional flights to and from Shanghai that will result from opening fifth-freedom rights will depend on whether third-party countries concerned will also grant the rights.

Mr Ip said most countries still regard traffic-rights information as sensitive and do not release it to the public. So it is difficult to accurately assess the number of additional flights that can be scheduled to Shanghai.

He said the Shanghai/HK Economic & Trade Co-operation Conference held recently fully recognised the importance of strengthening co-operation between the two airports.

The Airport Authority and the Shanghai Airport (Group) Company have also discussed ways to enhance co-operation and signed a letter of intent on the co-operation framework as a basis for further detailed discussion.