Air shuttle services between Hong Kong and southern parts of the Mainland are being considered, using smaller planes and more frequent services, Deputy Secretary for Economic Development & Labour Wilson Fung says.

The move came after the review of the Mainland-Hong Kong Air Services Arrangement earlier this month, which provides a clear timetable for opening the Hong Kong-Mainland aviation market to more airlines and for expansion of capacity limits on individual routes.

Speaking on a radio talkshow today, Mr Fung said the new rights provide valuable business opportunities to Hong Kong airlines planning to launch or increase services.

In October, overall passenger capacity will rise 30%, increasing weekly passenger flights operated by airlines in the two jurisdictions to 1,600.

Cargo capacity will also rise 100% from the current 21 flights a week for each side to 42, bringing the total number of weekly freighter services that can be operated by airlines of both sides to 84.

On passenger services to Shanghai, Mr Fung said a second Hong Kong airline will be allowed to operate the service from October 2006.

He said existing passenger capacity can still meet demand and the Government will keep monitoring and reviewing the situation.