Cathay Pacific Airways said yesterday it will apply to fly cargo planes to the Chinese capital, another step in its efforts to tap one of the world's fastest-growing aviation markets.

Cathay's first passenger flight to the mainland in 13 years will arrive in Beijing next Tuesday after the Hong Kong-based carrier gained final approval for three round trips a week to the city from the mainland government in October.

"We'll put in an application for pure cargo rights (to Beijing) in the very near future," Cathay's Chairman James Hughes-Hallett told reporters on the sidelines of a conference.

Previously, only smaller rival Hong Kong Dragon Airlines, in which Cathay has a 17.79 per cent stake, flew to the mainland under the territory's "one carrier, one route" policy.

Cargo typically makes up around a third of Cathay Pacific's revenues but became an important income generator during the SARS outbreak in spring when passenger traffic all but disappeared.

The mainland's air freight market is relatively underdeveloped, though Boeing predicts air cargo traffic should grow by 10.3 per cent annually over the next 20 years. The country's carriers operate just 20 freighters compared with Cathay's 11.

Hughes-Hallett declined to say how many flights a week the airline had applied for but said it would most likely be fewer than the passenger flights it has already been granted.

He said talks between the Hong Kong and mainland governments on Cathay's application to fly to the financial stronghold of Shanghai and the southeastern city of Xiamen would take place in January.

"With just three flights a week it's difficult for us to expand. We aspire to at least double daily flights to Shanghai and Beijing," Hughes-Hallett said.

Cathay reported its biggest-ever loss in the first six months of this year as SARS scared away passengers and forced the carrier to offer steep discounts but Hughes-Hallett said he was "hoping" that the carrier would turn a full-year profit.

"We're not at the end of the year yet. Forward loads are good. We still have some areas that are not strong such as South Korea and Japan but long haul flights are very full," he said.

He also said that there was no progress on plans for closer ties with Shanghai-based China Eastern Airlines.

"In terms of share exchange there's nothing on the agenda at the moment. It's the kind of thing we talk about all the time but there's nothing concrete going on," he said.

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