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Landmark Pact Expands Airline Routes with US

Air services between China and the United States will largely expand thanks to a landmark aviation agreement, sources from General Administration of Civil Aviation of China (CAAC) said on Friday.

Over the next six years, the agreement officially signed on Saturday will more than double the number of airlines that may operate between China and the United States, a CAAC official who declined to be named said.

It will also increase by nearly five-fold the number of weekly flights between the two countries -- from the current limit of 54 weekly round-trip flights to 249 weekly round-trip flights at the end of a six-year phase-in period.

The agreement also allows services between additional cities, eliminating restrictions on destinations and permitting unlimited code-sharing between US and Chinese airlines on any US-China route.

It provides unlimited rights to any US carrier that wishes to operate to certain western and northeastern Chinese provinces in greater need of international service.

"This agreement is a result of the fruitful bilateral cooperation between China and the United States in the past 20 years and will benefit airline companies and make the interaction between two peoples more convenient," the official said.

The introduction of additional foreign airlines will help step up the construction of aviation infrastructure facilities and push for the development of the nation's aviation industry at large, he said.

Visiting US Secretary of Transportation Norman Y. Mineta highlighted the significance of the landmark aviation agreement, saying it will fundamentally reshape the commercial aviation relationship between the two countries.

"The air service agreement represents a major breakthrough in both economic liberalization and transportation liberalization," Mineta said in a speech at the American Chamber of Commerce Luncheon in Beijing on Friday.

The agreement was reached in Washington after four rounds of talks starting last February.

The last agreement to expand US-China air services was concluded in April 1999, when each country's carriers were allowed to increase their weekly flights in the market from 27 to 54, and each side was allowed to designate one additional airline, for a total of four, to serve the market.

The new agreement will allow five additional airlines from each country to serve the US-China market.

According to the agreement, the United States may name one additional all-cargo airline, while China may name either a passenger or cargo airline, to start service later this year.

The other four new airlines may be either passenger or cargo carriers, with one new carrier entering the market in each of the years 2005, 2006, 2008 and 2010.

Mineta said the agreement also contains innovative new provisions that may serve as a model for aviation liberalization elsewhere.

"For example, the agreement will substantially increase the 'doing business' freedoms of US airlines in China, including broad rights for US cargo airlines who are willing to invest in 'hub' operations in China," he said.

Mineta appreciated China's liberalization in the important bilateral market, saying China deserves much credit for its foresight and willingness to open its international aviation market so extensively.

"Additionally, China deserves credit for the substantial reforms that it has been willing to take in its domestic aviation system," Mineta said.

These reforms will help to build a more viable, stronger and more competitive civil aviation network, he said.
(China Daily July 24, 2004)

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