US Airlines serving
China should double, flights quintuple over next six years
U.S. Transportation Secretary Norman Y. Mineta today announced a
landmark air services agreement between the United States and China
that will more than double the number of U.S. airlines that may
serve China and will permit a nearly five-fold increase in weekly
flights between the two countries over the next six years.
The agreement will also substantially increase the “doing
business” freedoms of U.S. carriers in China, including the
right for U.S. cargo airlines to establish hubs in China. The
agreement was reached in Washington, D.C. after four rounds of
talks starting last February.
“This agreement recognizes the critical role of commercial
aviation in the rapidly growing U.S.-China trade
relationship,” Secretary Mineta said. “This
agreement represents a giant step forward in creating an
international air transportation system that meets the needs of the
new global marketplace.”
Secretary Mineta noted that even as U.S.-China aviation services
have remained limited, trade between the two countries has grown
dramatically, increasing in value from $4.8 billion in 1980 to $170
billion in 2003. The United States is China’s largest
export destination, and China is the United States’
fastest-growing export market.
“This important agreement demonstrates the
administration’s focus on achieving real results in opening
the Chinese market to bring benefits to American workers,
businesses and consumers,” Secretary Mineta said.
The last agreement to
expand U.S.-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.
Today’s agreement will allow five additional airlines from
each country to serve the U.S.-China market. 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-entrant 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. United
Airlines, Northwest Airlines, Federal Express and United Parcel
Service currently serve China.
The agreement also will
allow an additional 195 weekly flights for each side – 111 by
all-cargo carriers and 84 by passenger airlines – resulting
in a total of 249 weekly flights at the end of a six-year phase-in
period. A total of 14 of these flights will be available for
new U.S. passenger services later this year.
The two sides also agreed to allow each country’s carriers
to serve any city in the other country. Currently, Chinese
carriers are limited to 12 U.S. cities, and U.S. passenger carriers
may fly to only five Chinese cities. The agreement also will
permit unlimited code-sharing between U.S. and Chinese airlines,
thus expanding on the current agreement, which allows code-sharing
only to a limited number of cities.
The agreement also provides that when carriers establish cargo
hubs in the other country, they will be afforded a high degree of
operating flexibility, and expands charter opportunities beyond
those provided by the existing agreement.
The two sides will resume talks in 2006 to review the aviation
relationship and make further progress on liberalizing the
agreement. While the terms of the agreement take effect
immediately, formal signing of the agreement is expected within the
next month.