Airliners-India.com

selecta · Member Joined: 24 Dec 2006 Posts: 813 Location: ORD

By Eric Torbenson
Bloomberg.com
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Jan. 9 (Bloomberg) -- UAL Corp.'s United Airlines won U.S. approval for the first nonstop flight from Washington to Beijing, beating three competitors for a route that may generate as much as $100 million in annual revenue.

United can begin daily flights between Washington's Dulles International Airport and Beijing on March 25, the Transportation Department said today. Northwest Airlines Corp., American Airlines and Continental Airlines Inc. also sought the award in a competition marked by aggressive lobbying campaigns.

The route adds to United's presence in China, the world's fastest-growing major economy and a country the carrier has served for 20 years. It also fits United's plan to fly more high- dollar international routes that appeal to business travelers.

``That's a very big deal for United,'' Darryl Jenkins, an independent airline consultant in Marshall, Virginia, said in an interview. ``The demand for the travel is growing faster than supply by a long shot so you're charging quite a bit for first- class and business-class fares, and all those seats are always full.''

United's flights will benefit the most passengers, the department said. The Elk Grove Township, Illinois-based airline will offer 235,000 new seats between the countries each year.

``The goal is to do everything in our power to expand service, destinations and frequencies between the United States and China,'' Transportation Secretary Mary Peters said in a statement.

The China route is worth as much as $100 million in annual revenue, industry consultants have said. A 2004 U.S.-China aviation treaty set out when new flights would be added.

``Winning this highly competitive route demonstrates what we can do when we build on our strengths and work together as one company,'' UAL Chief Executive Officer Glenn Tilton told United employees in a telephone hotline message today.

Rivals' Proposals

Continental wanted to fly between New Jersey's Newark Liberty Airport and Shanghai, while Northwest applied to serve Shanghai from Detroit. AMR Corp.'s American sought to fly between Dallas/Fort Worth International Airport and Beijing.

Northwest, Continental and American all said in statements that they were disappointed not to get the route. Northwest urged regulators to secure more China flights in talks this month.

Regulators rejected American's request to amend its application by adding a Chicago stop on Beijing-bound flights. American, the world's largest carrier, sought the change after it failed to come to terms with its pilots union for the Texas-China route.

`Eliminated Themselves'

``I would have bet on American until they did that,'' Stuart Klaskin, an airline consultant for Klaskin, Kushner & Co. in Coral Gables, Florida, said in an interview last month. ``They eliminated themselves.''

The Allied Pilots Association, which represents American's pilots, said in a statement that it wanted to fly the route and that the airline rejected a union's proposal that would have allowed the Dallas flight to reach Beijing without a stop. American rejected the proposal Nov. 29.

Continental may have damaged its chances with regulators when it helped kill an effort to encourage more foreign investment in U.S. carriers, said consultants such as Jon Ash, president of the aviation consulting firm InterVistas-GA2 in Washington. The announcement by China Eastern Airlines last month that it would fly from Shanghai to New York's JFK International Airport also hurt Continental's bid from Newark.

Northwest's bid was a long shot from the start, consultants such as Mike Boyd of the Boyd Group in Evergreen, Colorado said. ``I always thought United had it in the bag,'' Boyd said in an interview last month. ``Northwest wasn't on the radar screen.''

`80 Percent Full'

United Vice President Michael Whitaker said his carrier's bid using a Boeing Co. 747-400, now the largest commercial aircraft, helped win the new route.

``Our current China flights are running 80 percent full year-round,'' he said. United expects the additional flights to help it compete against 13 other carriers flying into China. ``We think we'll win a good share of that business,'' Whitaker said.

The aggressiveness of the carriers' lobbying efforts was new to the competition for approval on routes, consultants who watched the process said. The airlines spent millions of dollars to generate support for their bids. American won support from 30 U.S. senators and 92 members of the House of Representatives.

United's bid was ``very appealing in terms of capital-to- capital service,'' said Ash, who predicted last month that the airline would get the route.

UAL shares rose 4 cents to $46.84 at 4 p.m. New York time in Nasdaq Stock Market composite trading. On Jan. 4, they reached $47.35, the highest close since the company exited bankruptcy Feb. 1.
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Nimish · Posted: Thu Jan 11, 2007 1:35 pm Post subject:

I think we can probably forget about UA flying to India on it's own metal for a little while. Good luck to UA on this new route to China!

PS: And now that SQ has got additional 5th freedom rights (hopefully will let them launch India-US ops), I would be surprised to see UA take another look at India, much rather just code share with the other *A carriers like LH/SQ/TG (and eventually AI).