Ua Ord-pvg In October..what About Aa?

[AirDude]

United Airlines Announces Start Date for New Nonstop Chicago-Shanghai Service
Tuesday June 29, 2:01 pm ET
New Service Would Begin October 31, 2004
Daily Chicago-Shanghai Service Will Address Huge and Growing Demand for Access to China's Booming Financial Center


CHICAGO, June 29 /PRNewswire-FirstCall/ -- United Airlines (OTC Bulletin Board: UALAQ - News) today announced that, following the conclusion of a new aviation agreement by the governments of the People's Republic of China and the United States, the airline has applied to begin new, daily nonstop service between Chicago O'Hare International Airport (ORD) and Shanghai's Pudong International Airport (PVG) effective October 31, 2004.
Service would commence on that date pending completion of the necessary regulatory procedures by the relevant Chinese and U.S. government agencies.

"Demand for nonstop service between the U.S. and China has grown exponentially during the past few years and continues to rise," said Graham Atkinson, United's senior vice president of Worldwide Sales and Alliances. "We are experiencing tremendous demand on our nonstop San Francisco-Shanghai flights -- where our planes have averaged more than 90 percent full in recent months -- and are eager to expand our service by providing additional options for travelers in the U.S. Midwest and East Coast. With more flights to and from Chicago than any other carrier, United is the best airline to provide new nonstop service between Chicago and Shanghai."

A recent report by the World Travel & Tourism Council states that China's business travel market is forecasted to grow 21.7 percent in 2004, while personal travel and tourism is forecasted to grow 22.4 percent. According to the International Air Transport Association (IATA), China is the second-fastest growing travel market in Asia, and is expected to realize an average 7.8 percent annual growth rate over the next 10 years.

"This new nonstop flight by United Airlines will not only bring the thousands of Chinese community members here in Chicago that much closer to their friends and family in Shanghai," says Jimmy Lee, executive director-Chicago Chinatown Chamber of Commerce, "it will also benefit the many Chicagoland and Midwest businesses who do business with that region and market."

United intends to operate combined passenger and cargo service using a Boeing 777 aircraft configured with 10 United First Suite® seats, 45 United Business® seats and 198 United Economy® class seats. Beginning in summer 2005, United plans to increase capacity to a Boeing 747-400 in order to meet projected demand in this expanding travel market.

United currently is the only U.S. airline with nonstop service from the U.S. to China, with daily, nonstop flights between Chicago and Beijing, and San Francisco and Shanghai, as well as newly launched daily, nonstop service between San Francisco and Beijing. In April, the airline opened a sales office in Guangzhou, another city United is interested in serving in the future.

United offers more flights between the 50 United States and the Asia- Pacific region than any other airline. United serves 11 Asia Pacific destinations, including Bangkok, Beijing, Hong Kong, Melbourne, Osaka, Seoul, Shanghai, Singapore, Sydney, Taipei, and Tokyo. And, with the Star Alliance network, United customers have access to even more Asia-Pacific markets, representing virtually all points in the region.

United, United Express and Ted operate more than 3,500 flights a day on a route network that spans the globe. News releases and other information about United may be found at the company's web site at http://www.united.com .

Worldwide Communications:
Media Relations Office: 847.700.5538
Evenings/Weekends: 847.700.4088

 

[FA Mikey]

Smart move, guess they think AA has a chance at being awarded the service from Chicao and are ready to protect there Asia market share.

 

[jimntx]

The "fight" for China--considering the sheer size of that potential market--should prove interesting. In the long run, I suspect that there is going to be more than enough business for everybody.

 

[FWAAA]

The new treaty allows the incumbent carriers (UAL and NW) more frequencies this year, while new entrants like AA, DL and CO must wait until next year (and subsequent years). The regulatory approval mentioned by UAL in its press release is almost automatic - recall that UAL was approved to fly ORD-PVG a few years back yet then chose to fly to PEK instead.

However, the events of the past couple of weeks demonstrate that UAL is in a world of hurt, and I can't see the DOT being happy to award it new routes.

 

[A/C FIXER]

Of course all this becomes a moot point if UA has to sell off its International routes to remain in business, though they could sell off or shut down some of its unprofitable routes and totally focus on the profitable ones, but that would mean selling off aircraft and laying off thousands more.

 

[AirDude]

The new treaty makes allows the incumbent carriers (UAL and NW) more frequencies this year, while new entrants like AA, DL and CO must wait until next year (and subsequent years). The regulatory approval mentioned by UAL in its press release is almost automatic - recall that UAL was approved to fly ORD-PVG a few years back yet then chose to fly to PEK instead.

However, the events of the past couple of weeks demonstrate that UAL is in a world of hurt, and I can't see the DOT being happy to award it new routes.

Hi...

Are you saying that UA is just releasing the wishes to fly ORD-PVG
in October,but they have not yet been approved to fly?

Thank you

 

[FWAAA]

Hi...

Are you saying that UA is just releasing the wishes to fly ORD-PVG
in October,but they have not yet been approved to fly?

Thank you

Exactly. Read the first paragraph of the UAL press release you quoted. UAL has applied, and service will commence pending regulatory approvals in the USA and China.

Of course, the approvals are probably routine rubber-stamps, since UAL is an incumbent carrier, but UAL has not yet been cleared to fly the route.

 

[MCI transplant]

<_< Not that it makes any differance now, but didn't TWA have unused routes into China???

 

[Hunter]

<_< Not that it makes any differance now, but didn't TWA have unused routes into China???

MCI -

I think that TWA did have route authority to China at one time; however, it was traded to Pan Am in the 60's, along with other Pacific route authorities. In return, TWA received additional route authorities to European and African destinations. I believe this transaction facilitated “round-the-world serviceâ€￾ on TWA.

It should be noted that TWA did not abandon the Pacific entirely until much later. In fact, TWA operated a Hong Kong “hubâ€￾ until as late as 1974, I believe.

Hunter

 

[eolesen]

UA's ORD-PVG approval is not rubber stamped or automatic. There are 14 slots available for passenger carriers this year, which is limited to UA and NW since they're the only two carriers authorized to serve mainland China.

It's probable that they'll get seven slots to operate ORD-PVG and NWA will get the other seven. It is possible that all fourteen could go to NWA. I don't see all fourteen going to UAL, especially with all the ruckus caused by Hassert's meddline with the ATSB process.

One more passenger carrier can be designated for service to begin in 2005, and DOT will start the proceedings on that shortly. I don't believe DL or CO participated in the previous route proceeding, so my biased money is on AA. CO and DL have very close marketing/codeshare ties with NWA, so I'd be surprised to see Delnorthwental getting more service than they already have.

 

[MAH4546]

One more passenger carrier can be designated for service to begin in 2005, and DOT will start the proceedings on that shortly. I don't believe DL or CO participated in the previous route proceeding, so my biased money is on AA. CO and DL have very close marketing/codeshare ties with NWA, so I'd be surprised to see Delnorthwental getting more service than they already have.

Neither DL nor CO has the equipment right now to open up a China route with out cutting other long haul services. DL's only trans-pacific capable planes are the 772s, and they only have eight running a tight schedule (three are dedicated to one daily Atlanta-Tokyo flight). CO could possibly do some shuffleing, but they are operating thier long-haul fleet at maximum capacity on a very tight schedule.

However, there are still cargo airlines to compete against...

 

[eolesen]

Yes, there are cargo carriers. And I left out of the previous post that the new agreement allows for a third all-cargo carrier to be designated in 2004. Next year's designation allows a third combination carrier.

 

[Cosmo]

While neither United nor Northwest has yet received all of the required governmental approvals, it's just a formality now because each carrier applied for only seven of the 14 available frequencies -- United for ORD-PVG and Northwest for DTW-NRT-PVG (with only the NRT-PVG segment being new flying, and at that with a B757). How's that for a coincidence?

As for the 2005 designation and additional frequencies, that will be a very interesting case at DOT. While many people assume that DOT will award the designation to a passenger carrier, with American thought to be the current frontrunner for the award in order to serve ORD-PVG, it doesn't have to be done that way, and at least three all-cargo carriers (the ones that have applied for but don't get this year's cargo designation) and perhaps even Northwest (with its dedicated B747 freighter fleet) will likely be arguing that it shouldn't be. So with United stealing American's thunder on the ORD-PVG route, DOT might decide to award the designation to Continental for EWR-PVG flights (assuming it applies for that route, of course), since there is no U.S. carrier service to China from the New York City area, or to another all-cargo carrier if the demand can persuasively be shown to exist. Still, American has a good chance to win the designation as well, provided that DOT can be convinced that the ORD-PVG route can support two U.S. carriers offering daily nonstop service.

As I said, this will be a very interesting case at DOT, with lots of twists and turns (and lobbying ). And it will be so much fun that all of the participants will get the opportunity to do it again a year later for the 2006 designation and frequencies!

 

[ZMAN777]

FWIW,

UAL has been working this for months and has done well to keep it off the radar of the rest of the industry. My sources tell me that this has been conditionally approved all the way up the chain in the PRC. Does anyone think it a coincidence that UAL linked up with Air China months ago? Come on guys! You're smarter than that!

Lets face it, China is and will continue to be THE developing market for the next 20+ years. That being said, UAL knows this and has laid the ground work to be the US carrier with the best ties/routes/connections going to/from there.

Yeah we have some more work to do before we're 100% healthy but I don't think anyone can count UAL out of the game, whether it be domestic or international. Fact is, the more UAL cuts its costs the harder (unfortunately!) its going to be for our brethern at our competitors to keep what they have. I certainly wish it weren't so. And to make matters worse, if Dubya gets a second term we'll all have to begin to worry about BA, Air France, etc. competing on our domestic routes as well. But hey, he's "just here to help". Right?

Cheers,
Z