Struggling Airlines Compete Fiercely for China Routes
By JEREMY W. PETERS
Published: November 22, 2004
Five United States airlines are fighting for a business opportunity not seen in a decade and a half: flights to China.
Over the next 15 months, the authorities in Beijing will allow two daily round trips from a major American city to Shanghai or another large city in China. They have also approved, in principle, additional routes for both passengers and cargo, and those flights would be phased in over five years.
The first of the new routes is to begin in March 2005, the next one added in 2006, and the Department of Transportation will determine whether this second route will be for a passenger or cargo flight.
One or two routes to China do not sound like a big source of revenue for an airline, but this represents a growth market for United States airlines struggling with troubled balance sheets and increased domestic competition from low-cost carriers.
Since 1987, only two passenger airlines, Northwest and United, have flown to China, because Beijing restricts air traffic from overseas. But in July, the Transportation Department and the Civil Aviation Administration of China negotiated an agreement that would allow the number of flights between the two countries to increase nearly fivefold over the next five years, to 249 a week.
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