Despite early optimism that a deal could be struck ahead of a high-level delegation of Chinese leaders to the USA in April, talks on a new air services agreement between Beijing and Washington broke down in February.
During meetings between US and Chinese negotiators in Beijing from 24-26 February, the USA asked that its carriers be granted more passenger and cargo rights into the world's fastest-growing aviation market.
Beijing was hesitant to allow more US passenger flights, as its carriers have been hit since mid-1997 by increasing competition and domestic overcapacity. Last year, says the Civil Aviation Administration of China, just four of the 30 or so airlines in the country operated profitably.
However China is believed to be in favour of increasing cargo rights, as it has been encouraging local carriers to boost their limited freight operations. Shanghai-based China Eastern Airlines has a new cargo subsidiary that is seeking independent US operating rights, while Guangzhou-based China Southern is studying the possibility of dedicated freighter services to international markets like the USA.
China and the USA last updated their air services agreement in December 1995. US carriers are allowed 27 weekly flights to China. US airlines with China rights include Federal Express, Northwest Airlines and United Airlines, while American Airlines, Delta Air Lines and United Parcel Service are seeking them. Chinese carriers allowed to operate to the USA include Air China, China Eastern and China Southern.
Source: Airline Business
