On Monday, American Airlines announced it had submitted an application to the U.S. Department of Transportation to start a daily route between Los Angeles and Beijing in a move to expand the airlines' offerings between the world's two largest aviation markets.
"This new route would solidify Los Angeles as American's west coast gateway to Asia, and it would be our only Beijing access from the western United States, creating new connections to one of Asia's major business and leisure destinations," Andrew Nocella, chief marketing officer for American Airlines, said in a note sent to the Global Times on Tuesday.
Like American, many airlines have been adding routes between China and the U.S. as the two countries make it easier for each other's citizens to obtain visas.
The competition is heating up.
On March 18, China Eastern Airlines opened a route from Shanghai to Chicago, and it plans to add more flights between Shanghai and Los Angeles for the coming peak summer season.
Delta Air Lines announced last week that it plans to begin daily nonstop service between Los Angeles and Beijing on December 16, pending government approvals. The route will be its seventh daily route between China and the U.S.
To keep up with growing passenger demand, Chinese and American airlines had opened 46 routes between the two countries by March 18, according to data from CADAS, a research institution operated by aviation news portal carnoc.com. Of those routes, 26 were operated by Chinese airlines and 20 were operated by U.S. airlines. United Airlines Inc and Air China were the two carriers that ran the most routes.
On March 25, the two companies signed a long-term strategic cooperation agreement to enhance service quality and improve the flying experience for passengers.
With the agreement, the companies aim to cement their positions as leaders among U.S.and Chinese airlines. They plan to increase the number of direct and connecting flights in the U.S. and China markets, make connections smoother at gateway airports such as those in Beijing and San Francisco, as well as strengthen coordination in marketing and service upgrades.
Climbing profits
As the result shows from the official website of United Airlines, the prices of flight on April 12 from Beijing to Los Angeles, U.S. vary from $948 to $6,514. While for Air China, the prices vary from 4,940 yuan ($764) to 23,590 yuan.
Due to looser policies and more convenient transportation options, the competition for routes between China and the U.S.has grown fierce. Last year, the number of flights from China to the U.S.exceeded the number of flights from the U.S. to China, benefiting all the operators.
On Wednesday, China Eastern Airlines reported that its profits in 2015 grew 37.65 percent year-on-year to 5.67 billion yuan, based on 93.8 billion yuan in revenue. The airline said its international route capacity increased by nearly a quarter from the previous year.
In February, American reported a profit of $7.6 billion in 2015, up from $2.9 billion in 2014. The increase was primarily due to growing demand in the Asia-Pacific region, Robert Isom, American's chief operating officer, said in a media briefing in March. The airline has shifted its focus to the region, especially China.
American said its passenger load factor could climb to more than 70 percent in the low season and 80 percent in the peak season.
Route restrictions
Chinese airlines' share of the China-U.S. commercial aviation market grew from 38 percent in 2011 to 49 percent in 2014, the latest data available, said Lin Zhijie, an industry insider.
Chinese airlines have managed to seize more of the market by growing their fleets, upgrading their services and enhancing their marketing, Lin told the Global Times on Wednesday.
Looser visa policies and promotions such as dubbing 2016 as the China-U.S. Tourism Year have also helped.
Domestic airlines have also been eager to add upgraded models of aircraft such as the B777-300ER, B787, A330 and A350-900 to their fleets. The carriers have employed 40 wide-body aircraft on 362 flights, according to CADAS data.
Regarding visas, the U.S.-based International Trade Administration said about 2.5 million visas had been processed for Chinese citizens since the announcement of validity extension in November 2014, a 52.6 percent increase over the same period the previous year.
But Chinese airlines still face restrictions on air traffic rights.
Under the Sino-U.S.Aviation Agreement signed in 2004, there are set limits on the number of flights that U.S. and Chinese airlines can operate each week between the two countries. Under the agreement, Chinese airlines can fly up to 180 flights per week between major Chinese and American cities, and U.S. carriers can operate up to 160 flights.
For a long time after the agreement was signed, U.S. airlines took advantage of almost all their quota, but Chinese airlines barely used half of theirs. But recently, China's four largest airlines have been making up for lost time.
In May 2015, the two countries held talks on the limits, but did not reach an agreement. Currently, both Chinese and U.S. airlines are approaching the limits of the quotas, Chinese Business News reported on March 18.
