|
China seals U.S. air deal
|
 |
April 8, 1999: 8:28 a.m. ET
Treaty will double capacity over three years but Chinese carriers still struggle
|
LONDON (CNNfn) - China agreed to a new aviation pact with the United States Thursday in the latest move designed to ease China's entry to the World Trade Organization.
The two sides sealed the agreement after almost two years of talks seemed locked in stalemate.
The airline deal follows trade agreements in the past week covering telecom and agricultural products.
The new bilateral treaty will double the 27 weekly flights available to each country to 54 over the next three years. Each country will be able to add a fourth airline on U.S.-China routes from 2001.
"A doubling of frequencies is not as much as the United States had asked for originally, but I think it's quite a good agreement," a U.S. diplomat told Reuters.
The number of flights would rise to 35 immediately, 44 on April 1, 2000 and 54 on April 1, 2001.
However, the deal is far short of the "open skies" treaty which the U.S. has been pushing in all of its international negotiations over the past three years.
That would end all restrictions on capacity and allow any carrier from either country to operate as many services as it wanted.
Three U.S. carriers now operate to China - Northwest Airlines (NWAC), United Airlines (UAL) and cargo giant Federal Express (FDX). Northwest, the largest operator, said it will apply immediately for at least five more frequencies under the new deal.
Chinese airlines were less enthusiastic about adding routes since they have faced pressure from Beijing to reduce flights to cut losses, amid overcapacity on domestic and international routes.
Air China, China Eastern (CEA) and China Southern (ZNH) all operate to the U.S. but have struggled to gain profitability on the routes. China Eastern has signed a code share agreement with American Airlines to boost its earnings.
The U.S. Department of Transportation will select the additional U.S. carrier, with American Airlines (AMR), Delta Air Lines (DAL), United Parcel Service (UPS) and Polar Air Cargo all expressing interest.
-- from staff and wire reports
|
|
|
|
|
 |
|
