US airlines go slow on China routes

By James Shih (China Daily)
Updated: 2009-06-08 07:27

CHICAGO: In 2007, when Washington cleared the way for six new non-stop routes between China and the US, top air carriers were clamoring to add to their list of destinations.

But less than two years later, airlines are scrambling to push back their launches, or reduce the frequency of their services, amid the recession.

In the past year, the US Department of Transportation has approved delay or cutback requests from all but one of the airlines that had won the rights to the new services. In April, United Airlines became the first of the pack to postpone the operation of its San Francisco-Guangzhou route, for the second time.

Air carriers attribute the setbacks to the worldwide economic downturn. American Airlines, which put off its Chicago-Beijing service until next year, cited "extraordinarily adverse marketing and operating conditions affecting the airline industry". Other carriers, too, stated similar reasons for cutting back on their flights.

"All US carriers serving China have experienced much less favorable market conditions than were generally expected," said Delta Air Lines in its request to cut the number of weekly Atlanta-Shanghai flights that the airline launched last year.

International travel has been one of the hardest-hit sectors of the airline industry. The airline slump has hit Asia particularly hard. The Asia-Pacific region saw a 15 percent decline in the number of international travelers, according to the International Air Transport Association (IATA).

"Asia is the manufacturing center of the world, and it's the collapse in world trade and collapse in exports and imports of goods that have driven the slowdown in Asia," said Brian Pearce, IATA's chief economist. "And that has been reflected in travel to Asia and also from Asia as well."

In China, the number of US visitors fell by more than 15 percent during the first quarter of 2009, compared to the same period the previous year, according to official figures. Business-related travel plunged by more than a third.

Of the six US-China services approved in 2007, only Delta's Atlanta-Shanghai route and Continental Airlines' Newark-Shanghai route are in operation. In addition to United, American and US Airways, Northwest Airlines has also postponed its Detroit-Shanghai service.

In a 2007 bilateral agreement with China, the US had unveiled a timetable to more than double the number of non-stop, round-trip flights operated by US carriers to more than 23 by 2012. However, only 11 of the 16 routes currently available are in use.

Continental is the only airline to introduce a route this year, although it also applied for the right to revise the frequency of the flights. Despite the setbacks of its peers, the carrier is confident about its new route connecting New York and Shanghai.