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28 September, 2006

U.S. Airlines Vie for New Daily Route
Content provided by:
The Wall Street Journal Briefing (WSJB) logo

Four U.S. airlines are waging an aggressive public battle for a lucrative prize: a new daily flight to China.

AMR Corp.'s American Airlines, Continental Airlines, Northwest Airlines and UAL Corp.'s United Airlines are reaching out to every ally they can find to help them make their case to the U.S. Department of Transportation, which is expected to make a decision by year's end.

Airlines have blasted emails to customers, created Web sites making their cases, and visited big and small cities alike in hopes that a diverse and large number of people will write to the government on their behalf or sign an online petition.

"This is one of the biggest competitions I've ever seen," says Darryl Jenkins, an aviation analyst hired by American Airlines to file an economic analysis on its behalf. "It's one of the most profitable routes in your entire network," he says, estimating that airlines can charge $800 for a coach seat and as much as $12,000 for first class. "You just don't get fares like that elsewhere."

While the U.S. has open aviation agreements with most major nations, China is a notable exception. Each government doles out a limited number of flights to its carriers. Under a 2004 agreement, the U.S. can award one new daily flight for service beginning March 25 to one of the four airlines that already serve China. They all want it.

Only three U.S. cities currently have nonstop passenger service to China on U.S. carriers: San Francisco, Chicago and Newark, New Jersey, which serves neighboring New York. Northwest Airlines uses its three slots to provide service from Tokyo to three Chinese cities, but it doesn't provide any nonstop service from the U.S. Chinese carriers serve additional cities, including Los Angeles.

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