Good, Bad and Ugly Doings for Air Carriers

In recognition of the increase in commerce between China and the U.S., the U.S. Department of Transportation (DOT) tentatively awarded increased access to both FedEx and UPS to go into effect next year.

Under terms of DOT’s previous ruling, FedEx will have 23 weekly flights to China beginning in March 2005. That number will increase to 26 weekly flights in March 2006. Meanwhile, UPS will increase its weekly flights to 18 in April 2005, with 12 going to Shanghai and 6 to Guangzhou. In April 2006, the carrier will add 3 additional flights to Shanghai. The increased number of flights permits UPS to seven-days-a-week service as well as providing a step toward establishing a regional air hub at Shanghai.

Although it speaks more to passenger traffic, consequently limited amounts of belly cargo, DOT awarded a Newark to Beijing air route to Continental Airlines to begin in March 2005. At the same time, and loosing out in a hard fought lobbying battle, DOT awarded allotted flights to China to American Airlines to begin in March 2006. It is expected that American will start Chicago to Shanghai service then.

Although American lost the right to initiate service by a year, Delta Airlines lost out completely. The airline will begin to lobby for a 2007 U.S. to Beijing route. At present, United Airlines offers 28 non-stop weekly round trips to China and Northwest Air provides flights to China with a stop in Tokyo.

Because of claims that the airlines were not meeting performance goals, the USPS suspended domestic mail delivery contracts for both American Airlines and US Air. The airlines had been warned in December that they were not meeting terms of their contracts. On February 12, UPSP stopped using both airlines for moving the mail.

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