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American Airlines lands in China

By Lu Haoting (China Daily)
Updated: 2006-04-04 06:04
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Trying to stay afloat in an industry battered by soaring fuel costs and low-fare competition, American Airlines is exploring more profitable international routes where competition is less intense and launching cost-cutting programmes.
American Airlines lands in China
The first flight of American Airlines to China, AA289, arrives at Shanghai Pudong International Airport Monday, April 3, 2006 from Chicago OHare International Airport. The world's largest airline company started new daily nonstop service betwee the two cities. [AP]

"We have truly put the magnifying glass to everything we do as a company," said Athar Khan, managing director for American Airlines Asia-Pacific region.

As the only major US carrier that has never sought bankruptcy protection, American Airlines has embarked on a series of plans to get out of the red and avoid going belly up. One such strategy was its Sunday launch of daily non-stop flights to China.

The world's largest airline already began flying to Delhi, India, in November. China and India are the world's fastest-growing markets for commercial aviation.

"If you look at the banking industry, computer business and all the manufacturing businesses, the growth is either in Latin America or in Asia, and Asia is even ahead of Latin America in growth numbers," Khan said.

"The business is moving into this part of the world and our job is to provide people who travel in our network with access to regions where their businesses are growing," Khan said.

China, in particular, will be the centre for American's expansion in Asia.

"The Chinese market is beautiful. This is the focus of the bankers, the shippers, the manufacturers and any sort of product improvement. The nature of an airline is to follow that trend," Khan added.

Shanghai is American's first destination in China, but Khan said the US carrier plans to add another Chinese city next year. Beijing will "certainly be an attractive choice and is the top running," Khan added.

China and the United States signed an expanded air services agreement in 2004. The agreement allows the number of weekly flights between the two countries to increase nearly fivefold, from 54 weekly round-trip flights to 249 at the end of a six-year phase-in period.

Since then, Continental Airlines and American have been authorized to fly to China. Continental started daily non-stop flights from New York to Beijing last June, breaking the nearly two-decade market duopoly of United Airlines and Northwest Airlines. American became the fourth US passenger carrier flying to China.

"We have been anticipating the opportunity to participate in the growing China market for five years," Khan said.

To extend route network to other Chinese cities, American operates code-share flights with Shanghai-based China Eastern Airlines to six cities Beijing, Xi'an, Chengdu, Chongqing, Shenyang and Shenzhen. American will expand the code-share partnership with China Eastern in April to another six Chinese cities, Khan said.

American's biggest rival on the China-US route is United Airlines, the world's largest transpacific airline. United operates 28 weekly frequencies between San Francisco/Chicago and Beijing/Shanghai. Northwest offers a daily service from Beijing and Shanghai to the United States via its Tokyo hub.

Khan said American's vast network within the United States and in Latin America would be attractive to business and leisure travellers.

"Any top corporate entity wants to see the overall network capability they get by giving business to an air carrier," Khan said.