Two airlines based in the United States – US Airways and United Airlines – that had won approval from the US Department of Transportation to start routes to China are putting off the launch of the new services by one year owing to high costs of aviation fuel.
United Airlines had planned a new service between San Francisco and Guangzhou, and US Airways, between Philadelphia and Beijing.
United Airlines is a major airline of the United States and a subsidiary of UAL Corporation. US Airways, a low-cost airline owned by US Airways Group Incorporated, is also the sixth-largest airline in the United States.
Both airlines had, in September 2007, won final approval and received the tentative go-ahead to launch the routes from the US Department of Transportation.
The request from United Airlines for a delay was approved April 25, 2008, while the request for delay from US Airways has not yet been received, a spokesman for the US Department of Transportation was quoted as saying.
Scott Kirby, president of US Airways Group Incorporated, said in a memo to employees: “At today’s prices, the fuel cost alone of running this single flight would be more than $90 million a year, about $40 million higher than the estimates we made when we filed for the route.”
He added that US Airways has asked the United States Department of Transportation to allow it to begin its Philadelphia-Beijing service in the spring of 2010, instead of the spring of 2009.
United Airlines, based in Chicago, was scheduled to start its new flights to China in early June 2008, but has now postponed it until June 2009. According to a spokesman of United Airlines, “the carrier is scaling back on international routes where there aren’t strong enough economics to offset higher fuel costs.”
Apart from US Airways and United Airlines, Northwest Airlines had recently sought to scale back passenger and cargo routes to China on account of high fuel prices.
Representatives for American Airlines, Continental Airlines and Northwest Airlines said they are not making any changes to their plans for new China passenger routes to be launched in 2009, the website usatoday.com has reported.
However, Northwest Airlines has applied for a waiver to suspend 7 weekly roundtrip cargo flights a week between Tokyo (Japan) and Guangzhou (China).
It may be noted that routes to China are much sought-after by US airlines that are seeking to extend international service and also cash in on the profitable business travel to Asia, especially in view of domestic markets getting less profitable.
There has been a rush by carriers in the United States recently to take advantage of China’s fast-growing market ahead of the Olympic Games to be held in Beijing, capital of China, in August 2008.
US airlines are required to apply to the United States government for access to a limited number of China routes. Permission is granted only after an elaborate review process.
Access to routes between the United States and China is highly competitive since air service between the two countries is restricted by bilateral agreements.
An agreement signed in July 2007 between the US and China aimed at doubling the number of daily flights allowed between the two countries over the next 5 years.