AIR CARGO QUARTERLY - United wins bid for DC-Beijing route

By: | at 07:00 PM | Channel(s): Air Cargo News  

By Karen E. Thuermer, AJOTUnited Airlines started the new year with good news from the US Department of Transportation. On January 9, United won tentative approval from the federal government to operate the first-ever nonstop daily flight between Washington, DC and Beijing, China.
“The service is long overdue since 28 other capitals around the world serve Beijing direct,” states Neel Shah, United Cargo vice president of sales and marketing. Washington, DC, with eight million residents, is the largest market in the US without non-stop service to China.
An agreement between China and the United States signed in July 2004 allows for a total of 195 new weekly flights to be phased in over a six-year period.
According to government officials, United Airlines can begin nonstop service between Washington Dulles International Airport (IDH) and Beijing’s China Peking Capital Airport (PEK) on March 25 if the tentative decision becomes final.
“We already offer four daily frequencies to China—more than any other airline,” states Shah.
In June 2004, United launched service between Beijing and Shanghai, and San Francisco and Chicago.
The IDH-PEK route will utilize B747-400 aircraft and be the first direct route from the Mid-Atlantic region. A network of 16 online connections in China through United’s codeshare alliances with Air China and Shanghai Airlines will also strengthen service for customers in the entire eastern United States. American Airlines (AA) lobbied hard to win the slot to fly between Dallas/Fort Worth and Beijing. In order to strengthen its position, AA tried to make a last minute change to its proposal to add a stop in Chicago before continuing to Beijing. The US government, however, denied the motion.
Other contenders were Continental Airlines, which applied for service between Newark (EWR) and Shanghai (PVG); and Northwest Airlines, which applied for service between Detroit (DET) and PVG.
“When we put in our bid we began to gain momentum,” Shah says.
Helping to spearhead the effort was a diverse group of business and community leaders led by the Capital-to-Capital Coalition. The Capital-to-Capital Coalition advocates on behalf of transit authorities, businesses, trade associations, the diplomatic community, academics and opinion leaders, with the purpose of promoting direct access between Washington, DC and Beijing. The Coalition emphasized the importance of linking the capital cities of these two important nations as a means to span geopolitical divides and positively impact governmental, business, academic and cultural relations. Jim Bennett, president and CEO of the Metropolitan Washington Airports Authority, and Jane Garvey, former FAA administrator under Presidents Clinton and George W. Bush, chair the coalition.
“The Coalition threw its weight behind our bid,” Shah reveals.
Freight potentialAnalysts estimate the capital-to-capital route to be potentially worth $250 million a year to the airline. Figures were not available, however, that indicate the potential for air freight on the IAH-PEK route. US Department of Commerce and MBG Information Services, however, report that in 2005 the total US export and import air freight market was worth approximately $62 billion and topped US export and import air freight from Japan for the first time.
Shah sees the route’s freight potential as significant.
“Much of freight traffic will come from the Carolinas and the Mid-Atlantic region,” he states. “We will also service US State Department needs to China such as personal effects, confidential documents, and items that need courier service.
While the trade lane is highly imbalanced, Shah reports that the United States is increasingly exporting more to China.
“Yields continue to decline, but we anticipated that since more carriers service this trade lane,” he says. “We are bullish about the business potential.”

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American Journal of Transportation