This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

U.S. Carriers Vie for China Rights

With a Transportation Department selection of a new route to China expected within weeks, applications by four U.S. airlines are suddenly in varying states of flux.

The stakes are high in the competition, with the winner gaining the right to begin flying March 25 from a U.S. hub to either Beijing or Shanghai. China service is extremely profitable, a result of high demand and limited routes because of a restrictive 59-year-old bilateral agreement that is slowly being expanded.

In recent weeks, American Airlines (AMR) has sought to revise its application for a Dallas-to-Beijing route after its pilots said the flight would require them to be on duty longer than their contract allows. The effort triggered a round of new filings by the four carriers.

Northwest (NWACQ), which is seeking a Detroit-to-Shanghai route, took the opportunity to re-emphasize an earlier suggestion that the award -- which actually involves seven weekly frequencies, rather than a single flight designation -- be split between two of the carriers.

Meanwhile, Continental (CAL) and United (UAUA) are talking about a merger. Last week, Kevin Mitchell, chairman of the Business Travel Coalition, wrote to Transportation Secretary Mary Peters to advocate that the China award be postponed as a result.

If either carrier were awarded the route, and if the merger were to occur, Mitchell said, the new United and Continental would have 42 weekly U.S.-China frequencies, more than all other U.S. carriers combined.

"Such an outcome ... would have dramatic negative impacts for business travelers in terms of sharply higher airfares and fewer service options," he wrote in his letter.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs