UAL to Link Chinese, U.S. Capitals

By Anna Marie Kukec Daily Herald Business Writer

Elk Grove Township-based United Airlines received tentative approval Tuesday for a coveted route to China – along with a chance to boost revenues in a fast-growing market and to increase its workforce.

United could start the Washington, D.C.-Beijing route by March 25, depending on when the U.S. Department of Transportation issues its final order.

“We do expect to hire additional employees to serve this route,” said United spokeswoman Jean Medina.

DOT evaluates U.S. air carrier proposals for new service between the two countries as part of a U.S.-China aviation agreement signed in July 2004, which seeks to open 195 new weekly flights phased in over six years. The bidding process for this route started last August.

United, which has served China for about 20 years, already has four daily flights: Chicago-Beijing, Chicago-Shanghai, San Francisco- Beijing and San Francisco-Shanghai.

United’s latest – and fifth – route offers Washington its first non-stop service to Beijing. It cements United as a dominant carrier in China and provides easy access to thousands of customers in the Washington, D.C., area, including government officials who regularly go on business to Beijing.

Two other bidders, American Airlines and Continental Airlines, had just one existing route to China, while a third, Northwest Airlines, has three via Tokyo.

American proposed a Dallas/Fort Worth-Beijing route; Continental proposed a Newark, N.J.-Shanghai route; and Northwest sought Detroit- Shanghai service.

“The new route closes a critical service gap, connecting the capital of the United States, the largest economy in the world, with the capital of China, the fastest-growing economy in the world,” said UAL Chief Executive Officer Glenn Tilton through a spokeswoman.

“We look forward to being the bridge that connects the commerce, the governments and the cultures of China and the United States and enables diplomacy during a time when people-to-people and culture- to-culture contact has perhaps never been more important in our world.”

DOT spokesman Bill Mosley said the department’s decision was based on need, not because United already has a strong presence there.

More people travel to China from the Washington area than from any other U.S. city that currently does not have nonstop U.S.-China service. United also would provide the greatest capacity – about 253,000 seats annually – in the U.S.-China market, Mosley said.

DOT’s decision Tuesday is tentative and awaits final approval. If objections are filed in the next two weeks, answers to objections are due seven days after that. DOT then will review comments and issue a final decision “as soon as possible,” Mosley said.

American Airlines spokeswoman Mary Frances Fagan said American won’t file an objection because it withdrew its proposal after an amendment was denied. Last month, American sought to amend its proposal because the flight time would have violated its current pilots contract.

American and others likely will apply in 2008 for more frequent service to established routes in China, Fagan said.

United’s new route is a great opportunity for a carrier that emerged from bankruptcy less than a year ago. While China is a fast- growing market, it won’t have a huge impact, said Brian Nelson, airline analyst with Morningstar Inc. in Chicago.

“In the scheme of things, it’s a great opportunity, but you have to keep things in perspective,” said Nelson. “United’s domestic operations are just as important. This new route is small potatoes.”

Terry Trippler, airline expert with MyVacationPassport.com, had supported Northwest Airline’s proposed Detroit-Shanghai route as tying together manufacturing centers.

“Awarding the route to Beijing is an unfortunate waste of a valuable aviation resource,” said Trippler. “This flight will be principally used by government bureaucrats flying between Washington Dulles International Airport and Beijing – with less economic benefit to either country than if the route been awarded to Shanghai.”

akukec@@dailyherald.com

Washington to Beijing

Here are highlights of the new United Airlines route that may start March 25:

– Service will be aboard a 347-seat B747-400, offering three classes

– A network of 16 connections to other cities in China will be available through alliances with Air China and Shanghai Airlines

– Washington will join 28 other world capitals with nonstop service to Beijing

– The more than 8 million residents of the Washington area constitute the largest U.S. market lacking nonstop service to China

– In 2005, about 68,000 D.C. area residents traveled to China

Source: United Airlines, Capital-to-Capital Coalition

(c) 2007 Daily Herald; Arlington Heights, Ill.. Provided by ProQuest Information and Learning. All rights Reserved.