U.S.-China Aviation Pact to Increase Flights

By Staff -- Logistics Management, 5/1/1999

The United States and China last month signed an aviation agreement that takes a significant step toward liberalizing restrictions on passenger and cargo flights between the two trading partners. Nonetheless, the new pact falls short of what U.S. carriers had hoped to gain.

Under the agreement's terms, the number of carriers, flights, and departure and destination points from both countries will increase over the next two years. Prior to the new agreement, three carriers from each country were allowed to fly from a small number of origin points to a limited number of destinations, for a total of 27 flights each week for each country's carriers. The three U.S. carriers with landing rights in China were United Airlines, Northwest Airlines, and Federal Express.

Over the next two years, scheduled flights will increase to 54 per week for each country's carriers. U.S. carriers also will gain new freedoms in route selection when restrictions on points of origin are eliminated under the pact.

Both U.S. and Chinese carriers will be allowed to serve two additional destination cities in 2001. U.S. passenger carriers now may fly only to Beijing, Shanghai, and Guangzhou (all-cargo carriers may fly to any city). Chinese airlines now may serve 10 U.S. cities. In 2002, 20 more Chinese cities and 30 more U.S. cities will become accessible through liberalized code-sharing agreements.

U.S. carrier executives have expressed disappointment that only two new cities will be opened up to direct flights. Even more disappointing, they say, is that the agreement will allow only one additional carrier from each country to enter the market in 2001. That means passenger and all-cargo carriers will compete against each other to become the fourth carrier to serve China. Passenger carriers Delta Airlines and American Airlines and all-cargo carriers Polar Air Cargo and United Parcel Service have indicated they will apply for those rights.