American Starts Chicago to Moscow Service

American Airlines kicks off Chicago to Moscow service on Monday, making a case that it doesn't take a merger to build a dominant international airline.

With the new flight, just three airlines -- American, a unit of AMR (AMR Quote - Cramer on AMR - Stock Picks), Delta(DAL Quote - Cramer on DAL - Stock Picks) and Aeroflot -- will fly non-stop between the U.S. and Russia. UAL's (UAUA Quote - Cramer on UAUA - Stock Picks) United plans to begin Washington to Moscow service in October.

Since 2005, American will have added nonstop service from Chicago to New Delhi, Shanghai and Moscow, as it builds a hub with service to the world's key emerging economies. At O'Hare, American offers about 500 daily departures to 120 destinations.

American has grown international capacity from 27.5% to 36.1% over the past five years. The carrier has also expanded its international reach through code-shares with Oneworld alliance partners including British Airways and Japan Airlines.

"We've been pretty upfront. Even though we were for many years the largest airline in the world, we can't take people everywhere they want to go on our own," said Don Casey, managing director of international planning, in an interview. "[But] when you look at our network, supplemented through partnerships, we have a very strong proposition for customers, not withstanding a merger" between Delta and Northwest (NWA Quote - Cramer on NWA - Stock Picks).

Ironically, a nonstop flight to Moscow benefits from rising oil prices. Russia ranks third in the world in oil and gas reserves, with economic growth averaging 7% annually since 1998. Air traffic is growing rapidly as a result.

In Moscow, American will use the newer, privately owned Domodedovo International Airport rather than Sheremetyevo, which is used by Skyteam members including Aeroflot and Delta. American's Oneworld partners have moved to Domodedovo. American has also signed an interline agreement with domestic carrier S8, which offers connections throughout Russia. American will operate a Boeing 777-200, seating 245 passengers in three classes.

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