United applies for Washington-Beijing

[Fly]

I guess that makes us both right...sorta. If UAL gets the flight, it's capitol to capital service. Thanks for the spelling lesson. Ughh

I doubt AA will get it. I believe the two most likely will be UA or CA. In a merger, we still win. Either our nation's capitOl or NYC. Time will tell.

 

[The Gopher]

Keep in mind aircraft size. Only UA and NW can offer 747 service. CO and AA offer the 777. That's about 50 less pax per day/direction on a 777.

http://iagblog.blogspot.com/2006/09/dot-ro...-for-china.html

 

[whlinder]

The Boyd group thinks UA is going to win this. It would definitely surprise me.

 

[RowUnderDCA]

The Boyd group thinks UA is going to win this. It would definitely surprise me.

me too.

 

[Fly]

US Olympic Team Supports United Airlines / Bejing Route

Updated:2006-10-05 16:33:39
United States Olympic Committee Supports United Airlines' Bid to Connect U.S. and Chinese Capitals
PR NEWSWIRE
WASHINGTON, Oct. 5 /PRNewswire-FirstCall/ -- Today, the Capital-to-Capital Coalition announced the United States Olympic Committee's support for United Airlines ' (Nasdaq: UAUA) application for the first and only nonstop air route between Washington, D.C., and Beijing, China, the host city of the 2008 Olympic Games. United is an official sponsor of the 2008 U.S. Olympic and Paralympic Teams.

In a letter of support to the U.S. Transportation Department, the USOC strongly endorsed the proposed capital-to-capital link, which it said parallels the Olympic mission of unifying nations and cultures. The Washington-to-Beijing proposal -- one of four applications in contention for a direct, daily U.S.-China route -- would fulfill a major service gap and span an important geopolitical divide, the USOC said.

"In advance of the 2008 Olympic Games, the USOC fully supports creating a direct connection between the capitals of the U.S. and China," said United States Olympic Committee Chief Executive Officer Jim Scherr. "Bridging these two cities will help create the kind of unity that is emblematic of the spirit of the Olympic Games."

The USOC is a member of the Capital-to-Capital Coalition, a diverse slate of formidable transportation, tourism and business organizations and leading experts in U.S.-China relations advocating for the route. The alliance is chaired by Jane Garvey, former FAA administrator, and James E. Bennett, president and chief executive officer of the Metropolitan Washington Airports Authority.

The U.S. Department of Transportation is expected to decide by the end of 2006 where it will award a new direct route between the United States and China. Washington, D.C., is by far the largest metropolitan region without nonstop service to China, the U.S.'s third-largest trading partner and the fastest-growing market for U.S. goods exports. Washington also has the largest Chinese population of all U.S. markets without nonstop service to China.

About the Capital-to-Capital Coalition

The Capital-to-Capital Coalition advocates on behalf of businesses, trade associations, the diplomatic community, academics, opinion leaders and the air transport industry with the purpose of promoting direct access between Washington, D.C., and Beijing. The Coalition believes linking the capital cities of two of the world's most leading nations will span a critical geopolitical divide and positively impact governmental, business, academic and cultural relations. For more information or to learn how to get involved, please visit http://www.capitaltocapital.net .

Contact: Steve Krupin


(202) 659-7911
[email protected]

 

[whlinder]

Saw an AP report that Oberstar, the incoming House Transportation Committee Chairman, is supporting UA's application. He's from Minnesota. Pretty big surprise.

 

[JungleClone]

Give UA some credit. While their Senior Mgmt team is inept and out of their league in my view, their Network Planning folks are among the best in the business. By applying for IAD-Beijing, they knew it would offer strong appeal to the politicos in D.C. UA would have the only nonstop service from Washington, D.C. to China's capital. The benefits are obvious. In fact, I would be VERY surprised if UA is not selected. The route is a no-brainer in my view.

 

[Ukridge]

Jungle,

When is a decision to be reached on the award of this route? I ask this as I am curious as to what rate the Chineese are parceling out access to Beijing. Are they trying to balance out route awards among the Europeans, Americans, and others as well as their own airlines?
If they were prudent in managing their access growth, it would be interesting to read the tea leaves (no pun intended) and to see what kind of economic balance the awarding of such route permissions reveals about any larger scale outreaches the Chineese have to the world. In other words, are they favouring the Americas, South Asia, or Europe. Frankly I would think they would build the capacity to handle all of it as I would not imagine that it would take two ice ages to gain permission to pour concrete.
Cheers

 

[The Gopher]

I have heard Jan. 19th mentioned. Just a WHQ rumor though.

 

[JungleClone]

UKridge,

If memory serves me correctly, I believe the route is supposed to be awarded by sometime in early Spring 2007.

Again, I would be VERY surprised if UA is not chosen.

 

[Cosmo]

When is a decision to be reached on the award of this route? I ask this as I am curious as to what rate the Chineese are parceling out access to Beijing. Are they trying to balance out route awards among the Europeans, Americans, and others as well as their own airlines?

I don't know the specifics with regard to Chinese air service bilateral agreements with the rest of the world, but the U.S.-China bilateral allows for additional access for carriers of both countries in each year through 2010. And while the Chinese carriers are nowhere near using all of their currently allotted frequencies, the U.S. carriers continue to bump up against the limit as the demand for seats by passengers and frequencies by U.S. carriers far outstrips the available supply of either.

At this time, four U.S. carriers are allowed to operate nine daily passenger frequencies between the U.S. and the three main cities in China -- Beijing, Shanghai and Guangzhou -- either nonstop from the U.S. mainland or via an intermediate point (passenger frequencies to smaller Chinese cities and all-cargo frequencies are allocated from separate pools of frequencies where the supply is currently somewhat greater than the demand). United currently operates four daily flights, Northwest three (all via Tokyo), and American and Continental one each.

The additional passenger frequencies (seven weekly or one daily) that are at issue in the current route proceeding at the U.S. DOT are available for service effective March 25, 2007, and seven more weekly frequencies are available on the same date in 2008, 2009 and 2010. Plus, in 2008 and 2010 only, one additional U.S. carrier can be designated in each of those years to begin serving the three main cities in China, the only ones that U.S. carriers have shown any interest in serving to date.

As to when the 2007 frequencies will be awarded by the DOT, my guess (and that's all it is, a guess) is that a decision will be announced within the next week so the DOT can attempt to claim, without inducing too much laughter, that it is giving the winning carrier sufficient time to start the new route immediately once the frequencies become available in March. So while most airlines believe that major international routes require at least four to six months lead time for a route to be launched properly, the popularity and presumed profitability of U.S.-China routes will nonetheless cause the winner to undoubtedly salute smartly and tell the DOT that it will indeed start the new service on March 25, 2007, regardless of the negative impact such a quick start-up would likely have on the route's load factors and, more importantly, profitability during the initial months of service.

And as for the question of why this decision is so late in coming from the DOT, the agency was IMHO distracted by American's outrageous (again, IMHO) attempt in early December to re-write its service proposal well after all of the pleadings were filed in the current route case and it was ripe for a decision. This action by American was apparently precipitated by the failure of negotiations with its pilots to allow the operation of a 16+ hour nonstop DFW-PEK flight, thus causing the carrier to change its request to a DFW-ORD-PEK flight. But American's action also clearly violated the DOT's administrative rules for the route case, and the other participants (Continental, Northwest and United) objected vehemently to the possibility of American being allowed to change its route proposal at such a late stage in the proceeding. In my opinion, this probably caused the DOT to do a substantial re-write of its order awarding the new frequencies, delaying its issuance by a month or more and, in the process, almost certainly eliminating American as a potential winner (and having read that carrier's pleadings in this case, it wasn't a very strong proposal anyway, IMHO).

So will United get the China route award? I believe that it will, because 1.) as discussed above, American has shot themselves in the foot with a rather large-gauge gun (figuratively speaking, of course, as I'm not a violent person ), 2.) Northwest isn't fully using the frequencies that it already has, in the sense that the DOT really doesn't care about how well Northwest serves Japan-China passengers (and it flies a significant number of them) in the limited-frequency U.S.-China market, and 3.) Continental proposed service in the broader New York-China market that already has nonstop flights offered by three carriers, including Continental itself. Having said that, I suppose we'll soon find out whether the DOT agrees with me.

 

[Ukridge]

Cosmo,

As always Sir an informative and educative post. Impressive as always! I did not think about the start-up time necessary to begin flying so yes, a 60 day window (assuming the award is made within the next two weeks) seems to be rather a sprint although whether one flys east or west to get to China there seems to be gold im them there hills so I cannot imagine that the service would languish too long with empty and low yield generating seats.
Now, if you were able to explain why the US has not had a competetive five speed diesel sedan on the market. Honda is full apace with this in the UK and last year I drove a Peugot 6 speed diesel that was indeed a fine automobile.... Is it the preference for automatic transmissions in the US that avers drivers to such an arrangement or is the price differential between normal petrol and diesel not competative?
Cheers

 

[jimntx]

And as for the question of why this decision is so late in coming from the DOT, the agency was IMHO distracted by American's outrageous (again, IMHO) attempt in early December to re-write its service proposal well after all of the pleadings were filed in the current route case and it was ripe for a decision. This action by American was apparently precipitated by the failure of negotiations with its pilots to allow the operation of a 16+ hour nonstop DFW-PEK flight, thus causing the carrier to change its request to a DFW-ORD-PEK flight. But American's action also clearly violated the DOT's administrative rules for the route case, and the other participants (Continental, Northwest and United) objected vehemently to the possibility of American being allowed to change its route proposal at such a late stage in the proceeding. In my opinion, this probably caused the DOT to do a substantial re-write of its order awarding the new frequencies, delaying its issuance by a month or more and, in the process, almost certainly eliminating American as a potential winner (and having read that carrier's pleadings in this case, it wasn't a very strong proposal anyway, IMHO).

Cosmo, do you think for a minute that AA did not know exactly what it was doing when it filed the proposed change? it was not an "outrageous" move, it was carefully calculated. Of course, the company knew that changing the proposed route after the fact would eliminate them from the selection. It's called office politics. The contract negotiations for the pilots have begun. The company could not operate the DFW-PEK route without a concession from the pilots OR by putting additional relief cockpit crew on every flight. And, I'm sure they already have some numbers worked out to show that they could not make a profit with relief crews onboard regardless of ticket prices. Now, when the route is awarded to you or CO (my guess is CO), the company can say they lost the route because of the pilots' intransigence.

 

[FWAAA]

I almost always agree with Cosmo and nearly always agree with Jim. But in this case, I gotta agree with Jim. IMO, CO has been the front-runner in this race for over two years now (since the day it was awarded the 2005 EWR-PEK route and AA was awarded ORD-PVG for 2006). Soon as I read that decision I guessed that CO would get the complementary route it now wants: EWR-PVG.

AA, knowing that the DFW-PEK application was a clear loser from the beginning, had nothing to lose by amending its app last month after failing to reach agreement with the pilots, setting the stage for laying blame at the feet of the APA when CO is awarded its new route this week or next. That way, AA wouldn't have to admit that it screwed up by not applying for ORD-PEK (which would have been a competitive application, IMO). Competition with UAL worked when AA got ORD-PVG, and it would have been a good idea for AA to ask for ORD-PEK as well.

UAL may get its IAD route, but my money is still on CO.

 

[laura62]

As always AA's management is brilliant in anything they do and UA's bumbling managment barely makes it through the day. Blah, Blah, blah. <_<

Enough of that.

AA *#$$*# up their application, period. But now of course it was a brilliant pre-calculated move by management to blame the pilots? Give me a break. AA management %^&*(# up. :down:

UA's management has done a great job with this application. It is well thought out and most likely will win the DOT's approval. Also, their lobbying efforts on behalf of the award is brilliant and is not matched by anyone else.