Airlines Vie for an Edge in Landing U.S.-China Routes With limited profit opportunities in the struggling airline industry, U.S. carriers heatedly compete for air routes into China. The number of passengers traveling to and from China increased 20 percent from 2004 to 2005. American Airlines started new service from Chicago to Shanghai this week; and the fight for seven new routes to be made available next year has begun. United is looking to increase its use of routes crossing over the North Pole to save time and fuel.
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Airlines Vie for an Edge in Landing U.S.-China Routes

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Airlines Vie for an Edge in Landing U.S.-China Routes

Airlines Vie for an Edge in Landing U.S.-China Routes

Airlines Vie for an Edge in Landing U.S.-China Routes

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With limited profit opportunities in the struggling airline industry, U.S. carriers heatedly compete for air routes into China. The number of passengers traveling to and from China increased 20 percent from 2004 to 2005. American Airlines started new service from Chicago to Shanghai this week; and the fight for seven new routes to be made available next year has begun. United is looking to increase its use of routes crossing over the North Pole to save time and fuel.

MELISSA BLOCK, host:

You're listening to ALL THINGS CONSIDERED from NPR News.

The struggling U.S. airline industry is beginning to capitalize on the growing market for air travel to and from China. American Airlines landed its first every flight into China this week, beginning new daily nonstop service from Chicago to Shanghai. Continental and United also fly a limited number of nonstop flights into China. More routes soon may become available, and the competition for those routes is starting to heat up.

NPR's David Schaper reports.

Mr. DAN ELWELL (American Airlines official): We thought we'd never get it.

DAVID SCHAPER reporting:

That's how American Airlines official Dan Elwell describes the long wait and struggle to get a direct nonstop route from the U.S. into mainland China.

Mr. DAN ELWELL: Something like 14 years we have very much wanted access to the Chinese market.

SCHAPER: American's new daily service from Chicago to Shanghai gives the world's largest airline its first foray into what many industry analysts say is a vitally important marketplace.

Mr. MO GARFINKLE (aviation consultant, GCW Consulting): Entering into the China market is like entering into paradise for airlines at this point.

SCHAPER: Mo Garfinkle is an aviation consultant with the firm GCW Consulting.

Mr. GARFINKLE: The market is the fastest growing in the world.

SCHAPER: Garfinkle says to call growth in the market for flights to and from China an explosion might be an understatement. He says it's been decades since the US airlines have seen any kind of market growth like what is taking place in China right now, especially with the demand from higher paying, and thus more profitable, business travelers going in both directions.

The U.S. Department of Transportation does not yet have passenger data from the last year, but preliminary figures show that the number of people flying between China and the U.S. has increased close to 20 percent from 2004.

And Adam Pilarski of the Washington, DC-based aviation consulting firm AVITAS says there are now an estimated 150 million Chinese who travel by air within their country and abroad.

Mr. ADAM PILARSKI (Consultant for AVITAS): China is the second largest generator of passengers after the U.S. in the world.

SCHAPER: Yet, Pilarski points out there's still a huge population base in China of more than a billion people who have never flown. Meaning there are tremendous opportunities for that double-digit growth of the market to continue.

But the ability of US carriers to capitalize on those markets has been hamstrung by the limited number of direct, nonstop routes allowed by the Chinese government.

Right now, U.S. carriers have just five direct flights a day from the U.S. into China. Polarski says the Chinese government is, in part, protecting its own airlines, which he says are not yet ready to compete head-to-head with the U.S. carriers.

Mr. PILARSKI: China does not have the sufficient number of aircraft, sufficient number of pilots, and a sufficiently high level of service to attract customers.

SCHAPER: But Polarski and others say that just as the rest of the Chinese economy is making rapid advancements, so too are Chinese airlines. And therefore the Chinese government may be ready to open up new routes to U.S. carriers soon. The topic will be discussed in bilateral talks between the U.S. and China slated to begin in Beijing April 18th.

David Schaper, NPR News, Chicago.

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