Thursday, August 31, 2006

China Route Case Update and News Follow-Ups

China Route Case Update

By August 17, 2006 airlines participating in the 2007 U.S.-China Combination and All-Cargo Frequency Allocation Proceeding were required to make their final selection of the U.S. and Chinese gateway points they propose to serve.  The routes carriers filed for are as follows:

Combination Carriers

1) American - 7 weekly frequencies for Dallas-Fort Worth/Beijing (non-stop)

2) Continental - 7 weekly frequencies for New York-Newark/Shanghai (non-stop)

3) Northwest - 7 weekly frequencies for Detroit/Shanghai (non-stop)

4) United - 7 weekly frequencies for Washington D.C.-Dulles/Beijing (non-stop)

All-Cargo Carriers

1) FedEx - 4 weekly frequencies (Zone 1) with no routing specified

2) Northwest - 4 weekly frequencies Anchorage/Osaka/Guangzhou

3) Polar - 4 weekly frequencies Los Angeles, Chicago and Anchorage/Beijing

On August 24, the U.S. DOT granted the all-cargo applicants the frequencies they applied for without further procedures because there were 15 frequencies available and the carriers only applied for 12.  The carriers cannot begin using the frequencies before March 25, 2007.  Going forward, only the combination carriers will take part in a full carrier selection proceeding.

News Follow-Ups

There was an interesting Reuters story today emphasizing the importance of the upcoming U.S. District Court decision in the dispute between Northwest and its flight attendants union.  According to a source quoted in the story, "If the court were to hold that the flight attendants’ strike was lawful, and if that ruling were to be upheld on appeal, it would certainly change the dynamic of bargaining in the airline industry."

According to The Times (London), in BAA's final submission to the UK Office of Fair Trading for its study on the UK airports market, BAA argued that a more fragmented ownership structure would undermine vitally needed investment in airport capacity.  The outcome of this study has some US relevance as well since BAA has been mentioned as a possible bidder if the City of Chicago decides to privatize Midway Airport.

[Andy Eastmond]

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