| Economic Forum |
UAL Corp.'s United Airlines won a four-way contest to provide new service to China, giving it an edge in the burgeoning China market and providing Washington with its first nonstop flight to that country. United, which already operates four flights to China, plans to launch the nonstop route between Washington Dulles International Airport and Beijing on March 25, pending final approval by the Department of Transportation. Demand for travel to China is rising, and flights from the U.S. are typically quite profitable, as they carry many business travelers along with tourists. Air traffic between the two countries has grown 13% a year since 2000, the government said. Travel is likely to pick up with the 2008 Olympic Games in Beijing. Overall, the new route could be valued at as much as $250 million a year, said Roger King, an airline analyst for CreditSights, an independent research firm. "There's a ton of money in these routes." "The new route closes a critical service gap, connecting the capital of the United States, the largest economy in the world, with the capital of China, the fastest-growing economy in the world," Glenn Tilton, UAL's chairman and chief executive, said in a message to employees. Air service between the U.S. and China is restricted to a negotiated number of flights, and Washington was allowed to award just one new daily route for service beginning this year. Besides United, AMR Corp.'s American Airlines, Continental Airlines Inc. and Northwest Airlines Corp. had submitted proposals. The Department of Transportation announced its tentative decision and said interested parties have 14 days to file objections. United's application got a big boost last month when American, which gathered strong support for its proposal to fly nonstop service from Dallas/Fort Worth, sought to significantly revise its proposal. The flight would have been longer than allowed under its pilots contract, and after failing to reach an agreement with the union, American asked to fly to China from Chicago and back to Dallas, instead. The government declined to consider American's change and concluded that United's plan would benefit the greatest number of passengers. Under its agreement with China, the U.S. will be able to award another daily flight to China beginning March 25, 2008. American said it hopes to have reached agreement with its pilots by then, so that it can again propose the Dallas-Beijing service. United, based in Chicago, said that linking the two countries' capitals would enhance Sino-U.S. political and economic ties. It also noted that Washington was the largest metropolitan area in the U.S. without a nonstop flight to China. In the year ended March 2006, some 92,000 passengers traveled from Washington to China, the Transportation Department said. Only San Francisco, New York and Chicago have greater demand, and those cities are each already served with more than one nonstop China flight.
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