Continental Airlines plans Shanghai service

Updated: 2006-03-06 09:59

Continental Airlines Inc., battling low-cost carrier competition in its domestic markets and high fuel costs, hopes to launch a flight to Shanghai next March if it receives approval from the U.S. Government.

Unprofitable Continental, which won U.S. Government approval a year ago to offer flights to China, hopes to increase its presence in the country where runaway economic growth is fuelling passenger demand. But Continental has no plans to follow a budget airline model, Asia Pacific president Mark Erwin said Friday.

“We don't believe that we need to be the cheapest out there,” Erwin said.

“We can take so much cheese off the pizza that people won't buy the pizza,” he said, adding that the Asia Pacific region makes up around 8 percent of Continental's total revenue.

Asia's low-cost airline industry has begun to take off, with Qantas Airways discount affiliate Jetstar Asia and AirAsia Bhd trying to emulate their U.S. peers.

Erwin added that it was Continental's goal to return to profitability in fiscal 2006, but declined to say when the company might see a turnaround.

For each US$1 income in the oil price, Continental had to pay US$42 million annually, Erwin said.

Continental had applied to the U.S. Department of Transportation to launch direct flights between New York and Shanghai, but had yet to receive a approval, company officials said.

Continental has operated flights between Hong Kong and New York since 2001, and has run direct flights between Newark, New Jersey and Beijing since June.

(Source: Shenzhen Daily/Agencies)