Air route authority between the United States and China
There are bilateral treaties that govern aviation rights between the United States and China. Agreements cover both passenger services and cargo services. There is not an "open skies" agreement, which generally refers to an agreement that allows unrestricted flights between countries. The current treaty specifies the number of flights permitted. Due to the highly regulated nature of awards for route authority between the two countries and the strict limits on number of flights, the application process is competitive. U.S. airlines have sought to gain support from local politicians and the general public to influence the U.S. government into awarding to routes.
- 1 Current passenger flights operating
- 2 Early history
- 3 1999 Air Services Agreement
- 4 2004 agreement
- 5 2005 expansion
- 6 2006 expansion
- 7 2007 agreement covering expansion from 2007 to 2009
- 8 New restrictions on sale of route authority by U.S. carriers
- 9 2010 expansion
- 10 2012/2013 route transfer
- 11 References
Current passenger flights operating
In 2006, there were 10 non-stop flights between the two countries 2 million passenger trips per year.
Three U.S. carriers and three Chinese carriers operate flights between the two countries under the air agreement (not including Hong Kong). United Airlines flies non-stop between Beijing and San Francisco, Chicago, Newark, and Washington as well as non-stop Shanghai service from San Francisco, Chicago, Newark, and Los Angeles. Delta Air Lines flies between Beijing, Shanghai, and Tokyo with either connections or the same flight numbers continuing to the United States, as well as non-stop flights between Detroit and Seattle and Shanghai and Beijing. American Airlines flies between Shanghai and Chicago. Delta flies non-stop between Beijing and Seattle. American Airlines flies between Beijing and Chicago. American flies between Shanghai and Los Angeles. Following a 1987 directive, six Chinese airlines were formed in 1988 when CAAC, the Chinese airline and government regulatory agency for aviation was split and reorganized. Air China flies non-stop Beijing flights to San Francisco, Los Angeles, New York, and Houston. China Eastern flies non-stop Shanghai flights to Los Angeles, New York, Honolulu, and San Francisco. China Southern flies non-stop flights between Guangzhou and Los Angeles. China Southern began service to the United States in August 1997. Hainan flies non-stop from Beijing to Seattle and Chicago.
The airlines flying China-United States cooperate in airline alliance and codesharing. Participating in airline alliances and codesharing is intended to increase passenger traffic on the airline by allowing reciprocal frequent flyer program benefits and increasing the number of flights that an airline offers, even though the flights are operated by another airline. The first marketing alliance between airlines of the two countries was established in 1996 between Northwest Airlines and Air China. Star Alliance members using the US-China Air Route Authority are US Airways, United Airlines, and Air China. SkyTeam includes Delta, China Southern and China Eastern. The oneworld alliance includes American with direct service (and outside the Authority, Cathay Pacific/Dragonair via Hong Kong).
In 1979, diplomatic relations between the People's Republic of China and the United States were established. Previously, there had been no air service between China and the United States after 1949 although there were flights between the United States and sections of China controlled by the government based in Taipei (Republic of China).
In January 1981, CAAC and Pan Am began flying between China and the United States. Northwest Airlines resumed flying to China in 1984. Facing financial troubles, Pan Am sold its Pacific route authority, as well as aircraft and equipment, to United Airlines in 1985 leading to United Airlines operating former Pan Am routes over the Pacific in February 1986.
Hong Kong, which was previously a British Crown Colony until 1981 and a British dependent territory from 1981–1997, is now a part of China but has a separate air agreement with the United States. Macau, formerly governed by Portugal but now governed by China, also has a separate air agreement with the United States. The province of Taiwan is considered to be a part of China by both the People's Republic of China and the Republic of China, but the island is under defacto control by the government based in Taipei, not Beijing. Due to the severing of diplomatic relations with the Republic of China (Taiwan) by the United States in 1978 in order to establish relations with the People's Republic of China and because the mainland government does not control the province of Taiwan, there is no air service agreement between the United States concerning the province. However, there is an air service agreement between the American Institute in Taiwan and the Taipei Economic and Cultural Representative Office in the United States.
Due to the small number of flights, air fares tend to be high between the two countries.
Although the stated goal of both countries is for an open skies agreement, the process of reaching such an agreement has taken several years and has not been completed. Liu Weimin, director of the Aviation Laws Research Centre with the Civil Aviation Management Institute of China, has said "Under the current market situation, local carriers have a hard time competing against global giants such as Continental. That is why US airlines are enthusiastic to fly to China, while Chinese carriers are hesitating to open more flights. For local airlines, more flights may mean more losses if they cannot get enough passengers." There have been reports that the load factors (percentage of seats sold) in business and first class are lower on Chinese carriers compared to U.S. carriers.
Not all of the route authority of the Chinese airlines is used.
Discontinued non-stop service
The first scheduled non-stop flight between the two countries by a U.S. carrier took place on May 1, 1996, between Detroit and Beijing and was operated by Northwest Airlines. Northwest Airlines began Detroit-Shanghai non-stop flights twice a week starting April 6, 2000, before discontinuing non-stop service 18 months later and discontinuing non-stop Detroit-Beijing service in 2002. (the route was later re-instated on July 1, 2011 under the Delta Air Lines brand) Northwest Airlines then became the only airline authorized to fly China that did not offer any non-stop service to that country until it resumed non-stop flights between Detroit and Shanghai on June 1, 2009 (as part of its new parent, Delta Air Lines).
In April 2000, United Airlines discontinued Shanghai-Tokyo service and launched its first US-China non-stop service from San Francisco to Shanghai. In June 2000, United Airlines discontinued Beijing-Tokyo service and started non-stop Beijing-San Francisco service. This replacement of services was done because of the restrictions on the number of flights permitted under the 1999 air services agreement. Since then, all China routes serviced by United Airlines are non-stop. United's Beijing-Tokyo service was re-instated on October 26 as a temporary replacement for the Dulles-Beijing non-stop service (which was suspended for the winter season). United's Dulles-Beijing service operates year-round.
China Eastern began service to San Francisco in 1997 but has since discontinued passenger service to the airport, though cargo flights continue to be operated. China Eastern later resumed service to San Francisco on April 26, 2013. Passenger service to Chicago via Seattle has also been discontinued. Several Chinese airlines operated services to Anchorage, primarily as a fuel stop but such stops are no longer operated, in part because of long range aircraft in service.
In 2007, Delta Air Lines won the bid to operate non-stop flights between Atlanta and Shanghai. However, in 2009, only one year after having won the route, Delta suspended the route due to weak customer demand, the struggling US economy, high fuel prices, and the H1N1 flu pandemic. Delta flew its final Atlanta-Shanghai route on September 1, 2009. Delta replaced Northwest on its Detroit-Shanghai service using its Boeing 777 on October 24, 2009. Delta re-instated the Atlanta to Shanghai route on June 5, 2011, operating 2 days a week, as part of the carrier's international expansion for 2011. The route, however, ceased on January 17, 2012 for the second time citing poor performance on the route.
1999 Air Services Agreement
Concluded in April 1999, airlines from each country were allowed to increase the number of weekly flights from 27 to 54, including cargo flights. 20 of these flights were designated for all-cargo flights. Each country was allowed to designate one additional airline so that four airlines from each country were allowed to fly between the two countries.
United Airlines gained additional frequencies under this agreement and, in April 2000, started non-stop Shanghai-San Francisco service.
A new agreement was signed July 2004
The agreement allowed each country's carriers to serve any city in the other country. In practice, service between the two countries occurs between three large Chinese cities and a few cities in the U.S. Prior to the agreement, Chinese carriers were limited to 12 U.S. cities, and U.S. passenger carriers to only five Chinese cities. The agreement permitted unlimited code-sharing between U.S. and Chinese airlines, which had previously been limited to certain cities.
At the time of the agreement, there were plans for additional negotiations to begin in 2006 which led to another agreement in 2007.
The 2004 agreement led to the 2005 expansion of flights between the two countries as well as new service by Northwest Airlines from Tokyo to Guangzhou, which began on November 1, 2004, operated using Boeing 757 aircraft. (The route was planned to be resumed on July 6, 2011, by Delta, however, the airline indefinitely postponed the route.) United Airlines began non-stop Chicago–Shanghai flights on October 31, 2004.
In June 2005, the U.S. Department of Transportation awarded American Airlines authority to fly between Chicago and Shanghai as well as authority to Continental Airlines to fly between Newark and Beijing.
In 2006, several U.S. airlines applied for additional route authority that was granted in 2007. The United Airlines application to fly between Dulles International Airport near Washington, D.C., and Beijing was selected. The route started operating on March 25, 2007, using Boeing 747-400 aircraft.
Continental applied for rights to fly between Newark, New Jersey, and Shanghai. Northwest applied for the right to fly to Shanghai from Detroit. American's application originally was for non-stop service between Dallas/Fort Worth and Beijing, but changed the application to include an eastbound stop in Chicago after an impasse with pilots regarding work hours on the planned flight.
2007 agreement covering expansion from 2007 to 2009
In April 2006, the two countries began negotiations for further liberalization of the bilateral agreement. Talks were suspended in August 2006, but later resumed. The United States has stated that suspension of talks was due to an unrelated issue. Unofficial Chinese sources report that there was concern because of a "gap" in Chinese airlines’ ability to compete with U.S. airlines. Negotiations were scheduled to resume in January 2007.
An agreement reached on July 7, 2007, allows nearly unlimited service between China and Guam and between China and the Northern Mariana Islands. These unlimited rights do not include Beijing or Shanghai flights operated by U.S. airlines but do include those cities for mainland Chinese airlines.
Not including the potential expansion to Guam and Saipan (Northern Mariana Islands), by 2011 the current bilateral between the two countries will expand the number of U.S. airlines flying to China from four to nine airlines and from 54 passenger flights weekly to 249.
For the 2007, 2008, and 2009 awards, the Department of Transportation awarded routes at one time instead of considering one year at a time. United and Delta objected unsuccessfully to have the process separated.
One award to a new entrant, an airline not flying to China, was decided. Delta applied for Atlanta-Shanghai using 777-200ER initially then 777-200LR when they are delivered in 2008. Northwest applied for route authority as a new entrant, claiming that although it flies to China, it does so via Japan and not non-stop. It envisioned using a 747-400 if awarded the route in 2007 but planned to use a 787 if awarded the route in 2009.
Several sources have noted that before the route authority was granted, Delta was virtually assured of being awarded the route. The DOT awarded the route to Delta on September 25, 2007. Delta announced that it will begin service on March 30, 2008, one of the latest dates that they were allowed to begin. The route was later suspended in September 2009. However, Delta re-instated the route starting June 5, 2011.
One award for flights between Guangzhou and the United States was granted. Only United Airlines applied and was granted rights. It planned San Francisco to Guangzhou service using a Boeing 777. However, United delayed the route to June 30, 2010, due to the sudden decrease in international travel.
One award was granted to a new entrant airline as stated by the DOT when applications were sought. Hawaiian Airlines has withdrawn its application. US Airways applied for Philadelphia-Beijing authority using an Airbus A340-300, an aircraft that it neither operates nor has any firm orders to buy. Maxjet applied for rights between Seattle and Shanghai using an all business class configured Boeing 767-200ER. US Airways was granted rights by the DOT over Maxjet citing more seat availability and greater connecting possibilities with the US Airways bid.
Airlines that already fly between the two countries
Three routes to U.S. carriers that were not new entrants were awarded. There were applications for six routes. Northwest applied for Detroit–Beijing using a Boeing 787 to be granted if it is not award the route using a Boeing 747-400 in 2007. It also applied for a 787 operated Detroit–Shanghai route.
United Airlines applied for Los Angeles–Shanghai using 747-400 aircraft. Washington–Shanghai is an alternate routing of above application.
American Airlines applied for Chicago–Beijing (to have begun April 26, 2010; which actually launched May 25, 2010 after numerous delays). Continental applied for Newark–Shanghai using a Boeing 777-200ER Continental had previously applied for the same route some years earlier in which United was awarded the Washington–Beijing route. Delta applied for Atlanta–Beijing using a Boeing 777.
The American Airlines, Continental Airlines and Northwest Airlines route applications were granted. The DOT cited the United application as "not addressing the broader competitive needs" given that United has approximately half of the flights by U.S. carriers to China. The DOT cited American's OneWorld airline alliance as having less access to the U.S.-China market as one of the factors in its decision.
In a hint of the DOT's decision-making process and preferences, it stated in its report stating its intention to grant Continental and American Airlines route authority that "this tentatively leaves seven frequencies to be awarded ... Delta and Northwest." The DOT stated that Northwest, which already had route authority between Detroit and China but has chosen to fly the route via Tokyo (though it did operate some non-stop flights in the past), was applying for additional Detroit-China authority. Such application was denied in the past due to the limited number of new route authority but that now there is more leeway with more flights permitted by treaty. The DOT selected Detroit–Shanghai over Detroit–Beijing. The DOT noted that Delta was not awarded its route application because it would not have much experience in the Chinese market when the 2009 award was to start, given that it would only begin Atlanta–Shanghai service on March 30, 2008. The Atlanta–Shanghai Delta service was suspended on September 1, 2009, but was re-instated on June 5, 2011; the route, however, ceased again on January 17, 2012 due to poor loads. Delta also applied to the US DOT to begin non-stop flights between Detroit and Beijing starting July 1, 2011.
The DOT also announced, along with its 2007–2009 route authority awards, that route authority must be operated for five years before it could be sold. Previously, the required period was one year.
DOT approved the requests for a new route between Shanghai and Los Angeles from American Airlines and United Airlines at the end of 2010. Also Delta has decided to reactivate its Shanghai – Atlanta route. Delta is also granted a new route between Beijing and Detroit.
2012/2013 route transfer
Delta Airlines again suspended its Atlanta-Shanghai route as of January 18, 2012, stating the route had "performed poorly." Following this route closure, Delta announced a new Seattle-Shanghai route effective June 17, 2013, the second Seattle-China route operated by this airline (after Delta's Seattle-Beijing route which was launched 3 years earlier).
|Passenger air service between the United States and the People's Republic of China (not including Hong Kong, Macau, or the Republic of China (Taiwan)|
|Pan Am||Tokyo-Beijing (also Tokyo-Shanghai-Beijing)|
|CAAC||Beijing-Los Angeles various routings|
|Beijing-San Francisco various routings|
|Beijing-New York various routings|
|Air China||Beijing-San Francisco|
|China Eastern||Shanghai-Los Angeles various routings|
|China Southern||Guangzhou-Los Angeles|
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