U.S., China Agree to Double Flights
Ariana Eunjung Cha and Del Quentin Wilber, Washington Post, 5/24/2007 (excerpted)
The United States and China yesterday announced a broad aviation agreement that will more than double the number of daily passenger flights between the two countries by 2012.
As the U.S. and Chinese economies become more intertwined, with trading volume of $343 billion last year, passenger traffic between the countries has surged and flights are crammed with business travelers, tourists and students.
U.S. officials yesterday said the agreement would improve the nation's commercial and cultural ties with one of the world's economic powerhouses. The deal would allow U.S. carriers to operate 13 more daily flights to China over the next five years. In 2011, the Chinese would lift all limits on transpacific cargo flights, officials said.
"It is absolutely historic," U.S. Transportation Secretary Mary Peters said in a conference call with reporters yesterday afternoon. "We've achieved a breakthrough agreement that opens the way for more frequent, more affordable and convenient air service between China and the United States."
Until yesterday, the Chinese government had moved slowly to lift limits on flights by U.S. carriers to Beijing, Shanghai and the southern city of Guangzhou; 10 daily flights are permitted now.
The aviation announcement was the most significant outcome of a two-day economic dialogue hosted by U.S. Treasury Secretary Henry M. Paulson Jr., involving 17 Cabinet officials and agency heads from the United States and 15 ministers and 10 other high-level officials from China.
Under the agreement, the Transportation Department plans to award routes to U.S. carriers in stages through 2012. The first could be granted this summer. The daily flights would exceed by 10 the number U.S. commercial carriers were going to be granted through 2010 under a previous deal, officials said.
Analysts and airline executives predict U.S. carriers will aggressively lobby the Transportation Department for the slots because they will generate substantial revenue. Peters estimated that the new agreement will provide about $5 billion of new business for U.S. carriers.
The last route award drew applications from four major airlines and resulted in a bitter fight that included lobbying, hefty regulatory filings, letter-writing campaigns and pep rallies supporting the carriers' efforts. United Airlines won the contest and started flying between Beijing and its hub at Dulles International Airport in March.
Arch rivals US Airways and Delta Air Lines are expected to fight for the first open slot. Both carriers have already announced they would seek to serve Shanghai -- Delta from its base in Atlanta and US Airways from its hub in Philadelphia. Neither carrier now flies to China. Under the agreement, U.S. officials are likely to grant the route to a carrier that does not have a China route.
Jim Whitehurst, Delta's chief operating officer, stressed the importance to his company of winning the route. "We are going to do whatever it takes," Whitehurst said.
American, Continental and Northwest airlines also serve China from U.S. cities. They would probably apply to serve China when the other routes open: one in 2008; four in 2009; three in 2010; and two in 2011 and 2012. The 2008 flight must serve Guangzhou, officials said.
The deal, which also eases restrictions on Chinese airlines, comes two months after U.S. and European officials reached a far broader agreement that liberalized trans-Atlantic flights.
The United States has fairly liberal air service agreements with most of its main trading partners, except for China, Japan, Australia, South Africa and countries in South America.