Polar Air, FedEx, Northwest and UPS may split 39 new weekly cargo flights

The U.S. Department of Transportation has proposed to name Polar Air Cargo as a new entrant in the U.S.-China market, and to distribute a total of 39 new weekly all-cargo flights among Polar and the three U.S. airlines - FedEx, Northwest Airlines and UPS - currently operating U.S.-China all-cargo service.

The new services were made available by the U.S.-China aviation agreement signed July 24 in Beijing by U.S. Transportation Secretary Norman Y. Mineta and Civil Aviation Administration of China Minister Yang Yuanyuan.

"This marks the first step in an unprecedented expansion in all-cargo aviation services between the United States and China," said DOT Assistant Secretary for Aviation and International Affairs Karan Bhatia.  "Today's action will benefit American shippers, American workers and American consumers."

The department noted that China is already the United States' largest transoceanic trading partner and is expected to grow faster than any other U.S. air freight market over the next two decades.

The agreement allows a total of 195 new weekly flights over the next six years for the carriers of each country - 111 by all-cargo carriers and 84 by passenger airlines.  Prior to the new agreement, the carriers of each country could operate a total of 54 flights per week. This means that at the end of the six-year period, each side may operate a total of 249 weekly flights between the two countries.  Of the new cargo flights, 21 are available for operation now and 18 may be added on March 25, 2005.  The agreement also allows five additional airlines from each country to serve the U.S.-China market over the next six years, including the one additional U.S. all-cargo airline that may begin service this year.

The department proposes to award Polar nine weekly U.S.-China flights, six of which are available now and three beginning March 25, 2005.  In addition, the department proposes to award the three carriers currently operating all-cargo service to China new weekly flights to expand their operations in the market.

If the tentative decision becomes final, FedEx and UPS would each receive 12 additional weekly flights, and Northwest would receive six.  For each of the three incumbent carriers, half of the new flights would be available now, and the other half on March 25, 2005.

In a separate order today, the department asked for applications for new services to China that will become available over the next two years.  The department will select a carrier for new-entrant passenger service, and award seven weekly passenger flights for U.S.-China service that may begin March 25, 2005.  DOT also will select either a new passenger or all-cargo carrier for service that may begin March 25, 2006.  It will also allocate seven new weekly passenger flights and 12 new weekly all-cargo flights that become available at that time.

On July 23, the department granted the first new passenger flights made available by the new agreement, awarding seven weekly flights each to United Airlines and Northwest.

In addition to Polar, carriers also seeking the new-start designation are Arrow Air, Evergreen International Airlines, and Gemini Air Cargo.

The show-cause order, carrier applications and comments are available on the Internet at http://dms.dot.gov, docket OST-2004-18468. Interested parties have seven days to object to today's show-cause order, and answers to objections are due four days after the objection deadline.  The department then will review comments and issue a final decision.

FMI: www.dot.gov