Lopsided ambitions for Chinese skies

Talks with Beijing in May secured thirteen more nonstop round-trip passenger flights between the United States and China. U.S. carriers salivated at the possibility, eagerly promoting their prospective services with splashy websites and campaigns worthy of an Olympic bid. (It totally slipped by me, I suppose, that the 2014 Winter Olympics were announced for Russia last month.) A few U.S. majors have no China rights at all, and since the Chinese market is growing faster than routes are becoming available, demand is increasing, and airlines can charge fare premiums.

But Chinese airlines are not so excited about the new rights, according to ATW Online. The agreement with China allows Chinese carriers a number of these rights, but none of the big three there–Air China, China Eastern, and China Southern–applied for them. Chinese airlines have faced competitive disadvantages on transpacific routes in service and fares. They have not even used all their available slots. Therefore, four little-known, less-networked airlines have received the Chinese slots.

There is strong demand for nonstops between China and the United States. If Chinese carriers are not interested in flying them, U.S. airlines are more than willing and ready. They are chomping at the bit. They have the planes, passengers, and route networks to make them work. Sound public policy would allow the best airline to fill a space, regardless of nationality. Although this provision of the agreement is likely intended to create connection options on both sides of the Pacific, it only works if ambitions are created equal. This latest development illustrates why open skies agreements make more sense: they allow the market to assign routes, not bureaucrats in Washington and Beijing.

China’s big three pass on new transpacific services; four smaller carriers apply [ATW Online]

Advertisements