Half a dozen commercial airlines have enlisted members of Congress and the Senate in their fight to win the rights to operate several lucrative new flights to China that the Department of Transportation (DoT) is expected to authorize this fall.
The access is particularly important because of China’s growing importance in international business and trade. U.S. exports to China have grown by 240 percent since 2000, and total U.S. investment in China now stands at $52 billion.
That’s led to a higher demand for flights to China, yet it can be difficult to get a seat on a direct route to Beijing or Shanghai from an American city. “The overall number of routes is pretty small,” said Catherine Gelb of the U.S.-China Business Council.
Excluding flights to Hong Kong, only seven nonstop direct flights to China currently are offered by U.S. airlines. That figure rises to 10, according to the Department of Transportation, if you add three Northwest Airlines services that stop in Tokyo. The first nonstop flight from Washington, D.C., to China, operated by United Airlines, started earlier this year.
As a result, each airline bidding for the new routes to be authorized in 2007, 2008 and 2009 has visions of carrying thousands of well-heeled travelers flying business-class to China.
Transportation Secretary Mary Peters earlier this year said the new flights, to be offered because of a new air services deal between the U.S. and China signed earlier this year, could generate as much as $5 billion in passenger and cargo revenues during the next six years.
DoT is authorizing only one new daily nonstop service to China for 2007, and has said it is interested in granting the access to a new entrant to the market. That gives an edge to Delta Air Lines, according to some industry sources, since Delta currently does not offer nonstop service to China. Northwest, Delta’s only competitor for the 2007 flight, offers the three flights that stop in Tokyo.
The big bonanza, however, is the authority DoT will grant for 2009, when four new daily nonstop routes from the U.S. to China begin. Decisions on both the 2007 flight and the four daily flights in 2009 will be made by DoT as soon as possible, according to a DoT spokesman. The final procedural hurdle for the flights comes Thursday, when replies to rebuttal comments on the airline submissions are due.
Delta, Northwest, Continental, United Airlines, American Airlines, U.S. Airways and MAXJet, a business-class airline, have submitted applications for the four available routes in 2009. In total, there are seven bids for the four available routes.
U.S. Airways offers no nonstop service to China, and might have an edge for one of the spots in 2009, since DoT has expressed a desire to open a slot for one new entrant that year, some industry sources said.
The airlines are prohibited from directly lobbying DoT on its decision, but most are actively lobbying members of Congress and other political figures to press DoT to award the flights to their favored airlines. An exception is MAXJet, which hasn’t emphasized political endorsements in its strategy.
Georgia’s congressional delegation has weighed in for Delta, which has applied for the right to operate flights from Delta hub Atlanta to Shanghai in 2007 and from Atlanta to Beijing in 2009. In a letter to Peters last month, the delegation pressed Delta’s case on the grounds that the U.S. Southeast and China currently have no direct link.
Such a link “is vitally important” because a number of companies with large presences in Georgia and the Southern states have substantial operations and interests in China, according to the letter signed by Georgia GOP Sens. Saxby Chambliss and Johnny Isakson and 10 Georgian House members. Delta’s bid also is supported by several Southern governors, including those from Florida, Georgia, Mississippi and Alabama.
Michigan’s delegation, meanwhile, has written DoT to support Northwest’s bid for service from its hub in Detroit to Shanghai in 2007, and from Detroit to Beijing in 2009. It argues nonstop service from Detroit would benefit “key Midwest manufacturing interests” with growing trade with China.
Northwest’s other supporters include several political figures from the Midwest and Tennessee. Not coincidentally, Northwest also operates hubs and employs thousands in Minneapolis-St. Paul and Memphis.
Continental Airlines has a bid for the 2009 flights, and is backed by New Jersey’s congressional delegation. Continental wants to win the rights for daily nonstop flights from Newark to Shanghai in 2009, and argues this would serve the large Chinese-American community in New York and New Jersey.
California Gov. Arnold Schwarzenegger’s bid for United focuses partly on bringing Chinese people to his state, as he argues that DoT should authorize United’s bid for a Los Angeles-to-Shanghai route in 2009 to promote California tourism.
In backing the American Airlines bid for a new Chicago-to-Beijing route, Iowa’s delegation, which is also supporting Northwest’s bid, stressed the importance of further links between Chicago’s O’Hare Airport and China.
American has emphasized the level of support its bid had received in press releases touting its bid, and a spokesman for the company said it expected to file more letters of support from members of Congress later this week.
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