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Tensions Ease Between U.S., China Over Airline Flights

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Tensions Ease Between U.S., China Over Airline Flights

Chinese airlines can continue operating four scheduled passenger flights per week to the U.S. after the Department of Transportation on Monday lifted earlier restrictions on air access over a dispute with China about the treatment of U.S. airlines.

The DOT modified a June 5 order limiting Chinese carriers to a total of two weekly flights after the Civil Aviation Authority of China (CAAC) granted operating permissions to Delta Air Lines Inc (NYSE: DAL) and United Airlines Holdings Inc (NASDAQ: UAL) to each operate two weekly flights to China.

The order primarily affects the four Chinese carriers – Air China, China Eastern, China Southern, and Xiamen Airlines – that are currently providing air service to the U.S. It's a positive development for cargo shippers because it ensures belly space for freight at existing levels during a period of scarce cargo capacity and paves the way for more flights as travel demand increases. 

The DOT early this month planned to block Chinese airlines from flying to the U.S. after Chinese authorities were slow to approve requests from U.S. carriers to reintroduce limited service that had been suspended because of the coronavirus outbreak. The department quickly revised its decision and reciprocated when CAAC granted two U.S. flights per week. Delta and United were not satisfied with the Chinese grant of authority and certain biosafety conditions for operating the flights.

China has been very stingy about allowing foreign carriers to resume service out of caution against reintroducing the virus to China, where the outbreak began. But the decision to freeze out U.S. airlines and the U.S. response was intertwined with a series of geopolitical disputes that had increased bilateral tensions during the Trump administration. 

"We find that, while the CAAC's recent actions continue to preclude U.S. carriers from fully exercising their rights under the [ U.S.-China Civil Air Transport] Agreement and remain a significant concern to the Department, these latest actions represent positive progress and an important first step toward restoring a fair and equal opportunity for U.S. carriers to compete in the U.S.-China passenger market," the DOT decision said. 

Air China and China Southern are major players in the air cargo space, with fleets of all-cargo aircraft that supplement the belly space of their wide-body passenger planes. China Eastern also flies a significant amount of cargo in its passenger aircraft. 

Delta Air Lines says it will resume service to China with two weekly flights to Shanghai from Seattle next week and starting in July once a week from Seattle and once from Detroit, via Seoul, South Korea.

"We are pleased to be re-entering the China market and are grateful to the U.S. Government for its diligent efforts to ensure fair access to China for U.S carriers," a Delta spokeswoman said.

The airline has agreed to take passengers' temperatures before departure, the Wall Street Journal reported. Previously, Chinese authorities wanted airlines to take passenger temperatures during the flight. 

American Airlines has previously said it plans to resume flights to China in October. 

(Click here for more stories by Eric Kulisch)

Photo by Pascal Renet from Pexels.

 

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