Three years after agreeing a liberal air services deal, China and the USA have signed another pact doubling the number of passenger flights over five years and allowing for unlimited cargo services by 2012.
The new agreement will primarily benefit US carriers. Chinese carriers have not been using their full entitlements under the deal that was negotiated in 2004.
Benefits of the new agreement to US carriers will start to be seen this year and within five years they will be able to operate another 13 daily flights to China, lifting the daily total to 23 flights. One new daily flight will be added by the end of 2007 and one in 2008, followed by four in 2009, another three in 2010, and two in both 2011 and 2012. Three new US carriers will also be allowed to serve China in the coming years - one this year and two in 2009.
The pact, which US Transportation Secretary Mary Peters says could generate $5 billion of new business, drove US carriers into a frenzy of lobbying and self-promotion for the new routes. Delta Air Lines lodged its application for China route authority weeks before this pact, arguing that because the last round applied only to incumbents, a major US region, the south-east, was excluded. Delta aims to serve Shanghai from its Atlanta hub in the south-east.
US Airways is seeking rights to serve Shanghai from its Philadelphia hub. If its application is approved it will accelerate plans to acquire new long-range aircraft. Because the pact favours new entrants in 2007 and 2009, Delta and US Airways are considered frontrunners.
The US-China route competition, won by United Airlines last year for Washington Dulles-Beijing services, drew applications from four airlines that waged bitter fights including special websites, high-priced lobbying, letter-writing campaigns from legislators, business groups and employees, and pep rallies supporting the plans. United began its "capital-to-capital" Washington-Beijing route in March.
Source: Airline Business
