Continental Airlines takes to Chinese skies
By Cao Desheng (China Daily)
Updated: 2005-06-20 08:39

Continental Airlines' introduction of daily non-stop services between Beijing and New York last week is just a prelude of planned expansion by US airlines into the nation's fledging aviation market.

The move, the first by an American passenger airline to initiate flights to China in nearly two decades, breaks the market monopoly of United and Northwest Airlines, the only US carriers serving the China market for the past 20 years.

"If the bookings we have received already are an early indication of the demand we'll experience for this flight, it is clear that this is a flight that the market has been waiting for, and strongly needed," Chief Executive Larry Kellner said in a statement.

In another ambitious plan, Continental has formally submitted an application to the US Department of Transportation to operate non-stop flights from New York to Shanghai. If approved, the airlines will introduce flights in March 2007, Kellner told reporters.

American Airlines has also won federal approval to begin direct flights from Chicago to Shanghai from April 2 next year.

Facing intense competition from low-cost carriers within the United States, the major US airlines are shifting their focus to international routes in search of profits.

And their entry into the Chinese market was made possible thanks to a landmark air transport liberalization pact signed between the two countries last July.

The agreement allows the number of weekly flights between the two countries to increase nearly five fold - from the limit of 54 weekly round trip flights to 249 at the end of a six-year phase-in period.

It also allows five additional airlines from each country to serve the US-China market. The United States may name one additional all-cargo airline, while China may name either a passenger or cargo airline, to go into service this year.

But domestic airlines have been slow to take advantage of the liberalization of the US-China aviation market in the face of competition from their US rivals.

"Domestic airlines do not have the competitive advantages of international air networks as their US rivals do, which constitutes a factor leading to the loss of passenger sources," said Zhang Lianbiao, a professor from the Civil Aviation University of China.

At the same time, small fleet deployment also hinders them from benefiting from the advantage of the liberalization of Sino-US air lines, he said.

To improve their services, major domestic airlines such as Air China and China Southern Airlines have invested a lot in purchasing aircraft and updating cabin facilities.

Last month, the flagship carrier Air China injected 688 million yuan (US$83.1 million) to refurbish the seats in the business-and-first-class cabins on 15 of its aircraft.

Some of the refurbished aircraft will be used to fly the major Sino-US route, according to a press official from the airline company.

(China Daily 06/20/2005 page2)