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More 'Space' Expected for American Airliners
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The delayed negotiations on a new Sino-US aviation pact are expected to start this month. American Airlines hope to name one additional route for a nonstop flight in the new pact.

Athar Khan, managing director for Asia Pacific Region of American Airlines, announced the development at a ceremony to launch the first nonstop flight from Chicago to Shanghai in early April.

The first daily flight would depart from Chicago on April 3 and return from Shanghai the same day. The round-trip ticket price will be 2,999 yuan (US$373). From Shanghai, American Airlines will offer convenient connections to Beijing, Xi'an, Chengdu, Chongqing, Shenyang and Shenzhen through code-sharing with China Eastern Airlines -- one of China's largest carriers and based in Shanghai.

The service was made possible by the Sino-US aviation pact signed in July 2004.

The landmark air transport pact permits the number of weekly flights between the two countries to increase nearly five folds - from the current limit of 54 weekly round trips to 249 by the end of a six-year "phase-in" period. The two participants can add 195 flights per week --111 cargo and 84 passenger.

Carriers will be permitted to fly to any city in the other country with unlimited "code-sharing" between US and Chinese airlines. Previously US carriers were restricted to flying to five Chinese cities and the Chinese could use only 12 US destinations. This year's negotiations will focus on pact enlargement as pressure on "seat availability" mounts. Both countries report increasing demands.

"Now the Federal Government has asked for views from airline companies in US," said Khan. "The carriers anticipated that one company would benefit from getting access to a new route in the next round of negotiation," he added. 

The American Airlines has expressed interest in applying for the new route.

China's domestic airlines have not yet launched any direct services between cities in China and those in the middle regions of the US due to pressures of cost and capability.

China Eastern Airlines only have a nonstop service between Shanghai and Los Angeles. However the carrier plans to launch a direct flight between Shanghai and New York this year.

Since the pact was signed, only two carriers -- Shanghai Airlines and Yangtze River Express -- have been approved as new carriers on Sino-US routes by the General Administration of Civil Aviation of China.

The total number of planes owned by Chinese airline companies is about 700 while American Airlines boasts 996 planes.

Figures suggest that the profit to be made from international airline businesses is less than that of domestic carriers. The gap in the figures is greater in China than with their foreign rivals.

According to China Eastern Airlines CEO Li Fenghua, the pace of opening up the skies to foreign airliners should be slow down. The 2004 pact had put increased pressure on domestic airliners. They didn't have the competitive advantages of company scale, financing support, marketing and internal administration as did their US rivals. And Chinese culture and ideas on service required to be integrated with those in use internationally, Li observed.

However, the General Administration of Civil Aviation of China welcomes the market being opened up. It puts the state interest as the first, then consumers' interest, then industry's and as last the company's. The increase of Sino-US trade, the lower freight and higher service for consumers are more important than companies' interests.

(China Business News, by Li Shen, March 1, 2006)

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