China-US talks on air service
By Le Tian (China Daily)
Updated: 2006-03-11 10:22

China and the United States are expected to start a new round of talks on expansion of air services between the two countries this month, a senior US airline official said.

The talks, regarding the expansion of civil aviation rights, will take place this month, Athar Khan, managing director for the Asia Pacific region of American Airlines, said during a recent interview.

The General Administration of Civil Aviation of China, the nation's industry regulator, would not confirm the information.

However, Khan said, the talks are expected to allow one more US carrier to fly to China next year although he admitted he could not be specific.

"I wish I had details, as well, but it remains a secret as the conversations are to be held between the two governments," he said.

China and the United States signed an agreement in July 2004 to allow the number of weekly return flights between the countries to increase from 54 to 249 by 2010. It also allows five additional airlines from each country to serve the US-China market.

Khan's company is one of the two airlines that have been authorized to fly to China in accordance with the deal.

United Airlines launched daily non-stop flights between Shanghai and Chicago last November.  American Airlines, one of the world's largest, will also begin a daily non-stop service between Chicago and Shanghai on April 2.

"We have been anticipating the opportunity to participate in the growing China market for five years," Khan said.

He praised the expansion as good for passengers as they will have more airlines to choose from.

Insiders have worried that China's opening its sky to US carriers will bring heavy pressure to domestic airlines.

"We work closely with China Eastern Airlines, our code-sharing partner, and we have our best dealings with them," Khan said. "So, Chinese carriers will mature, will compete on the world level and will benefit from competing with worldwide leading carriers."

Currently, Chinese airlines can handle only 80 per cent of the approved capacity of flights to and from the United States, whereas US airlines are looking to increase flights.

However, Li Jiaxiang, chairman of Air China, said the liberalization of the market will bring more opportunities than challenges.

China has large potential in outbound travel, Li said at a recent seminar on Sino-US co-operation in Beijing. He added that the signing of the memorandum of understanding on tourism partnership between the two countries in 2004 must serve as momentum for the aviation market.

He urged the airlines of the two countries to co-operate more in marketing and code-sharing to improve network and avoid vicious competition.