HighSpeedClimb
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New deal: US-China flights to double by 2012
[FONT=Arial,Helvetica,sans-serif] (Reuters)
Updated: 2007-05-24 23:20[/FONT] [FONT=Arial,Helvetica,sans-serif] WASHINGTON ¡ª Passenger flights between the United States and China would more than double by 2012 under an agreement between the two countries on Wednesday, good news for the biggest US airlines aiming to shake their domestic woes.
The announcement by the Transportation and Treasury departments at the conclusion of a US-China economic forum is the second important international aviation services agreement sealed by the Bush administration in recent months.
Earlier this spring, the United States and the European Union agreed to further open transatlantic service to more competition, a deal that favored overseas rivals but still could mean more business to London and other key destinations for American carriers.
The China agreement was a small surprise after transportation regulators recently concluded that full liberalization or "open skies" would have to wait. The US aviation sector dwarfs its Chinese counterpart.
The two sides will resume talks in 2010 on a timetable for "open skies."
"Piece by piece, we are making it easier, cheaper, and more convenient to fly people and ship goods between our two countries," Transportation Secretary Mary Peters said in a statement.
Chinese officials did not comment immediately on the agreement but China would be allowed the same number of daily round-trips as US carriers, US transportation officials said.
The Transportation Department estimated the increased service would be worth $5 billion to US airlines, especially those that will be able to capitalize on flights to the 2008 summer Olympic Games in Beijing.
US carriers currently fly to Beijing; Shanghai, the leading financial center, and Guangzhou, a prosperous southern commercial city.
Under the new agreement, the number of daily round-trip flights will jump to 23 from the current 10 within five years. One flight will be awarded this year and next followed by four in 2009, three in 2010 and two each in 2011 and 2012. The 2008 service will be limited to Guangzhou.
The United States will designate three additional passenger carriers to fly to China ¡ª one in 2007 and two in 2009. Transportation officials said the 2007 slot would go to an airline that currently does not fly to China.
The agreement would also knock down barriers to cargo service by 2011, a boost for FedEx and UPS.
Currently, United Airlines, American Airlines, Continental Airlines and Northwest Airlines offer passenger service to China.
American, Northwest, United and Delta Air Lines immediately welcomed the announcement in separate statements. All would like more international flying to offset weakness in domestic performance due to stepped up competition and sharply lower fares.
Delta wants to fly from its Atlanta hub to Shanghai. US Airways also intends to seek service. Neither currently flies to China.
Transportation officials said they would move as quickly as possible to award the 2007 slot, possibly this summer.
[/FONT]
[FONT=Arial,Helvetica,sans-serif] (Reuters)
Updated: 2007-05-24 23:20[/FONT] [FONT=Arial,Helvetica,sans-serif] WASHINGTON ¡ª Passenger flights between the United States and China would more than double by 2012 under an agreement between the two countries on Wednesday, good news for the biggest US airlines aiming to shake their domestic woes.
The announcement by the Transportation and Treasury departments at the conclusion of a US-China economic forum is the second important international aviation services agreement sealed by the Bush administration in recent months.
Earlier this spring, the United States and the European Union agreed to further open transatlantic service to more competition, a deal that favored overseas rivals but still could mean more business to London and other key destinations for American carriers.
The China agreement was a small surprise after transportation regulators recently concluded that full liberalization or "open skies" would have to wait. The US aviation sector dwarfs its Chinese counterpart.
The two sides will resume talks in 2010 on a timetable for "open skies."
"Piece by piece, we are making it easier, cheaper, and more convenient to fly people and ship goods between our two countries," Transportation Secretary Mary Peters said in a statement.
Chinese officials did not comment immediately on the agreement but China would be allowed the same number of daily round-trips as US carriers, US transportation officials said.
The Transportation Department estimated the increased service would be worth $5 billion to US airlines, especially those that will be able to capitalize on flights to the 2008 summer Olympic Games in Beijing.
US carriers currently fly to Beijing; Shanghai, the leading financial center, and Guangzhou, a prosperous southern commercial city.
Under the new agreement, the number of daily round-trip flights will jump to 23 from the current 10 within five years. One flight will be awarded this year and next followed by four in 2009, three in 2010 and two each in 2011 and 2012. The 2008 service will be limited to Guangzhou.
The United States will designate three additional passenger carriers to fly to China ¡ª one in 2007 and two in 2009. Transportation officials said the 2007 slot would go to an airline that currently does not fly to China.
The agreement would also knock down barriers to cargo service by 2011, a boost for FedEx and UPS.
Currently, United Airlines, American Airlines, Continental Airlines and Northwest Airlines offer passenger service to China.
American, Northwest, United and Delta Air Lines immediately welcomed the announcement in separate statements. All would like more international flying to offset weakness in domestic performance due to stepped up competition and sharply lower fares.
Delta wants to fly from its Atlanta hub to Shanghai. US Airways also intends to seek service. Neither currently flies to China.
Transportation officials said they would move as quickly as possible to award the 2007 slot, possibly this summer.
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