Planned US China Flights Postponed
MSNBC.com is just out with a story on United Airlines raising its fares and within that story, I have learned that both United and US Airways will not be going forward with their US to China flights as originally planned:
United Airlines has sought and US Airways plans to ask for one-year delays in launching the new routes, representatives from the carriers said Thursday. United won final approval and US Airways received the tentative go-ahead to launch the routes from the U.S. Department of Transportation in September.The routes in question affect planned United service between San Francisco to Guangzhou, and US Airways flights between Philadelphia and Beijing.
United’s request for a delay was approved April 25, while the request from US Airways has not yet been received, Transportation Department spokesman Bill Mosley said.
United, a division of UAL Corp., was scheduled to start its new flights in early June, but now plans to postpone the launch until June 2009. Spokeswoman Robin Urbanski said the Chicago-based carrier is scaling back plans for some new international routes where there aren’t “strong enough economics” to offset higher fuel costs.
United received final approval for its route in September, the same time Delta Air Lines Inc. won the opportunity to launch its first flights to China with a daily route between Shanghai and Atlanta. Delta’s flights began March 31.
US Airways has begun sending letters to members of Congress and its employees saying it would seek to delay the launch of the new Philadelphia-Beijing route, noting that the cost for fuel would be more than $90 million a year — $40 million more than the original estimate of about $50 million.
“We’re optimistic that economic conditions will be on the upswing in 2010, giving us a better chance of success with our first route to China,” Scott Kirby, the president of Phoenix-based US Airways Group Inc., said in a letter to workers.
Hainan Airlines, on the other hand, will be starting its Seattle to Beijing direct flight service on June 9 and Northwest Airlines is scheduled to start flights on that same route in March of 2009.
Comments
Hainan airlines already offers Beijing - Portland, OR direct flights. Since PDX is a smaller airport than Seattle (I assume) I figure that's more noteworthy than offering direct flights to a major city. Imagine if you could fly direct from Beijing to your house. That would be service.
Posted by: Charming Charlie | May 25, 2008 9:27 PM
Chinese airlines run on heavily subsidized jet fuel, and that's one reason - though not the only one - that they've been profitable over the last six months while the US airline have seen record losses (Chinese airlines also benefit from the currency situation when buying jet fuel in the US). Because of the currency fluctuations, it's really difficult to a direct comparison, but I did a rough calculation last month suggesting that Chinese airlines paid roughly 10% less than Northwest in the first half of the year, and 14% less than Delta.
That's an enormous cost savings, and it'll be interesting to see if the Chinese carriers can take advantage of it to claim US-China market share.
Posted by: Adam | May 25, 2008 11:44 PM
And that is just the fuel costs. Factor in labor costs and the Chinese airlines have a big advantage over many western airlines (as they are independent). But Beijing subsidizes all fuel consumption and that is a big weight on their budget.
Posted by: casual oberserver | May 26, 2008 10:20 AM
I was completely wrong in my original post. Hainan doesn't offer flights between Beijing and Portland.
Posted by: Charming Charlie | May 27, 2008 1:38 AM
US Airways doesn't have a plane in their fleet with the range to fly PHL-PEK. They were hoping that they'd be merged with another carrier that does have capable aircraft by the time they had to start the route. The USDOT shouldn't have given them the route without a plane in the first place. Hopefully they deny the request and offer the slot to other carriers.
Posted by: Lysander | June 9, 2008 1:09 PM