News Article - May 25, 2007

Aviation agreement with China  
  WASHINGTON - Passenger flights between the United States and China will more than double by 2012 under an agreement reached yesterday, setting the stage for fierce competition among airlines for the valuable transpacific routes. U.S. Transportation Secretary Mary E. Peters said the aviation agreement with China could stimulate $5 billion in revenue for U.S. airlines over the next several years. As part of the deal, U.S. air cargo companies will gain virtually unlimited access to China.

   The deal increase the chances that US Airways will win the right to operate flights between Philadelphia International Airport and Shanghai, starting in 2009. US Airways carries about 60 percent of the airport's traffic. Under the pact, U.S. carriers will be able to operate 23 daily round-trip flights by 2012, compared with 10 currently.

   The agreement also allows the United States to designate three additional airlines to fly to China - at least one of them specifically for cargo, transportation officials said. China will have the right to fly the same number of flights to the United States, and can designate an unlimited number of airlines to operate those flights, Peters said. The deal also ends limits on the number of cargo flights and cargo carriers serving the two countries by 2011.

   Competition among U.S. airlines for the flights, which one analyst estimated could be worth up to $200 million in annual revenue, will be intense. Peters said the department wanted to award the new designations as soon as possible, but she did not give any additional information on timing.

Source - Philadelphia Inquirer