Newsstand - American Airlines applies for Dallas-Beijing route

http://www.theglobeandmail.com/servlet/story/LAC.20060721.RTICKER21-5/TPStory/TPBusiness/America/

American Airlines, a unit of AMR Corp., yesterday said it has filed an application with the U.S. Department of Transportation to fly between Dallas and Beijing.

I'm surprised they didn't go after DFW-PVG instead.

FORT WORTH (AP) — American Airlines said Thursday it is seeking permission for a second route to China and hopes to offer daily non-stop service between Dallas and Beijing beginning in March.

American, the largest U.S. carrier, said it had filed an application for the route with the U.S. Department of Transportation.

The timing would let American benefit from the 2008 Olympics in Beijing and from increased ties between China and corporations based in the Dallas area. Airlines, like other U.S. businesses, are eager to serve China's huge population and rapidly growing economy.

The bid for new China flights pits Fort Worth-based American against Houston-based Continental Airlines, which is seeking approval to fly from Newark, N.J., to Shanghai.

The Texas airlines already operate flights to China — American serves the Chicago-Shanghai route, while Continental flies from Newark to Beijing. But both are chasing two early entrants in the market — United Airlines and Northwest Airlines.

Neither United nor Northwest have bid for more China flights, but they have until Aug. 17, a Transportation Department spokesman said. Northwest expects to file, but would provide no details of its proposal, a spokesman said. United said it was still evaluating.

United flies out of Chicago and San Francisco, and Northwest flies from several U.S. cities to China via Tokyo.

American, a unit of AMR Corp., started flying between Chicago and Shanghai this year, shortly after launching service between Chicago and New Delhi. Company officials declined to say whether the Chicago-Shanghai route is profitable, although Chairman and Chief Executive Gerard Arpey said traffic is higher than the airline had forecast.

"The international markets are very important to our long-term future," Arpey said. "Those are big investments for us. It takes time to build them up."

Arpey said he hoped to convince federal officials that service between China and Texas would be more helpful to American consumers than another route from Newark.

Continental could have sought approval to fly from Houston to China. But the airline went back to Newark because of its big hub there and New York's status as a financial center, said spokeswoman Sarah Anthony.

If the Transportation Department approves American's request — there is no timetable for regulators to act — American would fly from Dallas-Fort Worth International Airport to Beijing with 245-seat Boeing 777 aircraft.
Source: USA Today (http://www.usatoday.com/travel/flights/2006-07-21-american_china_x.htm)

But they already go to PVG from ORD.

I agree that PVG is where the commercial side is at, but from a coverage perspective, they may have needed PEK

DFW-PEK would also be a "monopoly" for AA, which should allow for good yields.

As ORD-PVG competes with UA (which flies 744s, I believe), that probably hurts AA a bit (even if performance is above expectation), adding DFW-PVG would probably just dillute the yields even more, since many would fly to PVG via DFW instead of ORD.

And since UA also flies ORD-PEK, AA starting that service would probably not offer as much opportunity for high yields as from DFW.

What route will UA's competing application be? SFO-CAN again? If so, would it be more likely to be approved now that there are 4 competing US carriers to PVG/PEK vs. 0 to CAN (not counting NW's connecting service via NRT)?

LAX

Do you guys really think this have a chance? CO is applying to fly between the largest metropolitans and main financial centers of US and China, which also doesn't have a non-stop flight currently. I can't see how the AA bid can be superior. DL tried ATL-PEK, which is similar in nature to DFW-PEK, and was turned down last time.

I just started flying on AA: the carrier really needs to bulk up its international offerings. PEK is a nice move.

Do you guys really think this have a chance? CO is applying to fly between the largest metropolitans and main financial centers of US and China, which also doesn't have a non-stop flight currently. I can't see how the AA bid can be superior. DL tried ATL-PEK, which is similar in nature to DFW-PEK, and was turned down last time.

I agree with you; DOT is fixated on NYC nonstops to China and thus, CO will likely win this round. But AA had to pick a route for its application, and I'm hard pressed to think of a better choice. Sure, AA could have applied for JFK-PVG (assuming it would not have gone head to head against CO's existing EWR-PEK) but AA already serves PVG from ORD. If EWR-PEK makes sense, then it probably makes sense to award EWR-PVG to CO.

By applying for DFW-PEK, AA can claim that it has both important cities in China covered from its two big hubs, something CO can't claim.

Still, I agree that CO is the likely winner for the 2007 frequencies.

thank god. Been waiting for this.

What route will UA's competing application be? SFO-CAN again?

Yes.

DFW-PEK would also be a "monopoly" for AA, which should allow for good yields.

As ORD-PVG competes with UA (which flies 744s, I believe), that probably hurts AA a bit (even if performance is above expectation), adding DFW-PVG would probably just dillute the yields even more, since many would fly to PVG via DFW instead of ORD.

And since UA also flies ORD-PEK, AA starting that service would probably not offer as much opportunity for high yields as from DFW.

I don't know what the yields are for for AA ORD - PVG, but I do know some China folks that bought RT tickets ex-China for about 450USD all in.

sad...truly sad

I don't know what the yields are for for AA ORD - PVG, but I do know some China folks that bought RT tickets ex-China for about 450USD all in.

sad...truly sad

When CO first started EWR-PEK 1.5 years ago, they let people fly for 30,000 miles roundtrip for many months in the winter. But now the flights are quite full, and as long as they're filling most of the front cabins - which they are - they're fine. I am sure the situation is similar for AA.

When CO first started EWR-PEK 1.5 years ago, they let people fly for 30,000 miles roundtrip for many months in the winter. But now the flights are quite full, and as long as they're filling most of the front cabins - which they are - they're fine. I am sure the situation is similar for AA.

Well I just did PEK - ORD and yes the back was full esp. the E- section. In E+ it was decent, but still some people could have 3 seats to themselves and curl up.

F had only 3-4 seats taken and C was also only half-full. So not quite the premium load. Plus this was on a Sunday flight.

But they already go to PVG from ORD.

I agree that PVG is where the commercial side is at, but from a coverage perspective, they may have needed PEK

Yes, they are already go to PVG from ORD for couple months ago. I think exactly I heard AA has been done well from ORD-PVG lately due to direct competitive with UA. Should AA need applies for another more new route from DFW-PVG?

Yes.

In light of UA's recent announcement of transpac routes changes, there are speculations that NRT-TPE may become NRT-CAN. Would UA need approval before operating that route, even though it's not a direct US-China flight?

LAX

In light of UA's recent announcement of transpac routes changes, there are speculations that NRT-TPE may become NRT-CAN. Would UA need approval before operating that route, even though it's not a direct US-China flight?

LAX

Yes, as NRT-China by USA airlines is considered the same as Mainland USA-China. NW operates all of its China combination frequencies as one-stops via Japan but could operate them as nonstops from their mainland gateways if it desired.

AA already lost! CO has flown EWR-PVG already!

:p Well, not quite. That was the 8/2 CO99 EWR-HKG diverting to PVG after the Hong Kong airport was shut down 8/3 during a typhoon.

In light of UA's recent announcement of transpac routes changes, there are speculations that NRT-TPE may become NRT-CAN. Would UA need approval before operating that route, even though it's not a direct US-China flight?

LAX
Of course. I'm not sure what the China-US agreement says, but NRT would have to be named as a intermediate point in the CN-US agreement and CAN would have to be named as a beyond point in the Japan-US agreement.