Under an updated US-China aviation agreement, China is granting the US Government the 10 new flights as well as the option of designating one additional new US carrier. The current US incumbents are United Airlines, Northwest Airlines and FedEx. In the last route awards in mid-1999, Washington balanced the awards evenly between those three; of the 17 flights available, it gave five to United and six each to Northwest Airlines and FedEx.
This year's route case is unique because of the opportunity it gives to the USA to add a new carrier. American Airlines, Delta Air Lines and UPS Airlines are among the majors lobbying to become that new incumbent.
American chairman and chief executive Don Carty points out that this case is also unusual because it pitches cargo and passenger carriers against each other. "It's the first time in history where the Department of Transportation [DoT] is having to choose," he says. American hopes to win the designation and is seeking the rights for daily services between Chicago and Shanghai, and a three times a week service between Chicago and Beijing. American, which has the backing of prominent economist Alfred Kahn, says people - especially business travellers - should be given higher priority than packages. The airline also points out that the Boeing 777s it would operate on the China routes would each provide 15,400kg (34,000lb) of cargo capacity.
In testimony to the DoT, Delta's chairman and chief executive Leo Mullin argued that the absence of a service to China from New York was "a glaring omission". Delta wants to be the new incumbent so it can operate the first non-stop service between New York and Beijing, continuing to Shanghai; and a three times a week service between Cincinnati and Beijing, continuing to Shanghai.
Although the present incumbents are lobbying to be able to increase their services - United wants to begin non-stop services between its Chicago hub and Shanghai as well as operate a non-stop service from San Francisco to Beijing - lawyers and consultants believe the DoT will look most favourably on the applications by American and Delta and choose between these two.
Source: Airline Business
