United gets China route
01-09-2007, 10:30 AM
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United gets China route
United was the frontrunner, but here is the official announcement.
WASHINGTON (AP) - United Airlines on Tuesday won tentative approval from the federal government to operate the first-ever nonstop daily flight between Washington and China -- a route potentially worth $200 million a year.
The Department of Transportation's approval gives UAL Corp.'s United a critical head start over its competitors on the highly coveted, burgeoning market.
The Elk Grove Village, Ill.-based airline can begin nonstop service between Washington Dulles International Airport and Beijing's China Peking Capital Airport on March 25 if the tentative decision becomes final, the government said.
United beat out AMR Corp.'s American Airlines, which sought to fly between Dallas/Fort Worth and Beijing; Continental Airlines Inc., which applied for service between Newark, N.J., and Shanghai; and Northwest Airlines Corp., which applied for Detroit-Shanghai service.
"Interested parties have 14 days to file objections showing why today's tentative decision should not be made final," the Transportation Department said in a press release. If objections are filed, answers are due in seven days and the department then will review comments and issue a final decision.
The new route will strengthen United's already-extensive Pacific network and provide an injection of cash when the carrier is still trying to regain its former financial strength after a three-year bankruptcy restructuring that ended in February.
Airline analyst Roger King estimated that the route could bring United roughly $200 million a year in additional revenue, based on daily 16,000-mile round-trip flights. The flights, he said, are certain to draw businessmen and politicians willing to pay first-class fares.
"It further cements their dominant position among the American carriers in Asia and adds to their merger value," said King, airline sector analyst at CreditSights Ltd.
The cachet of capital-to-capital flights was probably the deciding factor in United winning the route, he said.
The government said United's proposal had the potential to benefit the greatest number of passengers since more people travel to China from the Washington metro area. United's service also would provide the greatest capacity, offering more than 253,000 seats annually, according to the government.
Transportation Secretary Mary E. Peters said the final choice was difficult, but "ultimately the goal is to do everything in our power to expand service, destinations and frequencies between the United States and China."
"United Airlines is honored to be selected as the first carrier to connect the governments, commerce and cultures of these two important capital cities," Glenn Tilton, United chairman, president and chief executive, said in a prepared statement.
American Airlines tried to make a last-minute change to its proposal to add a stop in Chicago before continuing to Beijing, but the government on Tuesday denied that motion. Any amendment this late in the proceeding would "significantly delay the start of new service," the Transportation Department said. It allowed the carrier to withdraw its application as requested.
The department evaluates U.S. air carrier proposals for new U.S.-China service as part of an aviation agreement between the two countries signed in July 2004 that called for a total of 195 new weekly flights phased in over a six-year period.
Shares of United parent UAL Corp. added 7 cents to $46.87 in afternoon trading on the Nasdaq Stock Market, while AMR rose 16 cents to $33.53, and Continental added 46 cents to $45.08, both on the New York Stock Exchange.
WASHINGTON (AP) - United Airlines on Tuesday won tentative approval from the federal government to operate the first-ever nonstop daily flight between Washington and China -- a route potentially worth $200 million a year.
The Department of Transportation's approval gives UAL Corp.'s United a critical head start over its competitors on the highly coveted, burgeoning market.
The Elk Grove Village, Ill.-based airline can begin nonstop service between Washington Dulles International Airport and Beijing's China Peking Capital Airport on March 25 if the tentative decision becomes final, the government said.
United beat out AMR Corp.'s American Airlines, which sought to fly between Dallas/Fort Worth and Beijing; Continental Airlines Inc., which applied for service between Newark, N.J., and Shanghai; and Northwest Airlines Corp., which applied for Detroit-Shanghai service.
"Interested parties have 14 days to file objections showing why today's tentative decision should not be made final," the Transportation Department said in a press release. If objections are filed, answers are due in seven days and the department then will review comments and issue a final decision.
The new route will strengthen United's already-extensive Pacific network and provide an injection of cash when the carrier is still trying to regain its former financial strength after a three-year bankruptcy restructuring that ended in February.
Airline analyst Roger King estimated that the route could bring United roughly $200 million a year in additional revenue, based on daily 16,000-mile round-trip flights. The flights, he said, are certain to draw businessmen and politicians willing to pay first-class fares.
"It further cements their dominant position among the American carriers in Asia and adds to their merger value," said King, airline sector analyst at CreditSights Ltd.
The cachet of capital-to-capital flights was probably the deciding factor in United winning the route, he said.
The government said United's proposal had the potential to benefit the greatest number of passengers since more people travel to China from the Washington metro area. United's service also would provide the greatest capacity, offering more than 253,000 seats annually, according to the government.
Transportation Secretary Mary E. Peters said the final choice was difficult, but "ultimately the goal is to do everything in our power to expand service, destinations and frequencies between the United States and China."
"United Airlines is honored to be selected as the first carrier to connect the governments, commerce and cultures of these two important capital cities," Glenn Tilton, United chairman, president and chief executive, said in a prepared statement.
American Airlines tried to make a last-minute change to its proposal to add a stop in Chicago before continuing to Beijing, but the government on Tuesday denied that motion. Any amendment this late in the proceeding would "significantly delay the start of new service," the Transportation Department said. It allowed the carrier to withdraw its application as requested.
The department evaluates U.S. air carrier proposals for new U.S.-China service as part of an aviation agreement between the two countries signed in July 2004 that called for a total of 195 new weekly flights phased in over a six-year period.
Shares of United parent UAL Corp. added 7 cents to $46.87 in afternoon trading on the Nasdaq Stock Market, while AMR rose 16 cents to $33.53, and Continental added 46 cents to $45.08, both on the New York Stock Exchange.
01-09-2007, 10:45 AM
#2
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No word yet on where UAL will get the lift to operate this route. Either pull some of the 747-400s out of the desert that were parked post 9/11, or cancel a current international route and use that lift.
UAL guys, what do you hear?
UAL guys, what do you hear?
01-09-2007, 04:39 PM
#3
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Congrats to United and it's employees. It was a hard fight between the four carriers vying for the route and United pulled it off. Perhaps this increased revenue source will help United's bottom line and eventually lead to employees getting back some of what they were forced to give up post 9/11.
01-09-2007, 04:52 PM
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Originally Posted by calcapt
Congrats to United and it's employees. It was a hard fight between the four carriers vying for the route and United pulled it off. Perhaps this increased revenue source will help United's bottom line and eventually lead to employees getting back some of what they were forced to give up post 9/11.
Congrats, UAL.
73
01-10-2007, 04:25 AM
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While I wasn't the biggest fan of Bethune, since he left, Cal has no political clout. Couple cases of fine scotch, few cigars, dinner with some Pentagon buddies.....we'd had it.(the way DC works) This was truly a gift from departing speaker.....Uncle Denny. It sure sounds good though, capitol to capitol. Whether or not it would serve the greatest number of people...remains to be seen. One thing I will say, UAL does have the equipment to fly it. The Chinese were worried CAL would try it with a 757. 
01-10-2007, 06:30 AM
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What ?????
American's Airlines' proposal to make the flight a one-stop thru Chicago didn't earn them the route. The proposal was amended because the outbound leg exceeded the flight time limitations in the collective bargaining agreement with AA's pilots.
Ironically, one of AMR's press release to the media a couple months ago lists UAL as the weakest competitor. Here is a snipet from their press release.
Despite the weakness of its case – or perhaps because of it – United Airlines launched an unprecedented advertising campaign in The Washington Post and other publications promoting its application.
China is booming. Well done UAL folks and enjoy the Olympics next year.
Tailwinds......
American's Airlines' proposal to make the flight a one-stop thru Chicago didn't earn them the route. The proposal was amended because the outbound leg exceeded the flight time limitations in the collective bargaining agreement with AA's pilots.
Ironically, one of AMR's press release to the media a couple months ago lists UAL as the weakest competitor. Here is a snipet from their press release.
Despite the weakness of its case – or perhaps because of it – United Airlines launched an unprecedented advertising campaign in The Washington Post and other publications promoting its application.
China is booming. Well done UAL folks and enjoy the Olympics next year.
Tailwinds......
01-10-2007, 08:42 AM
#8
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Originally Posted by HSLD
No word yet on where UAL will get the lift to operate this route. Either pull some of the 747-400s out of the desert that were parked post 9/11, or cancel a current international route and use that lift.
UAL guys, what do you hear?
UAL guys, what do you hear?
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