American Airlines, rebuffed in a bid to offer new direct flights to China, is upgrading its facilities in Tokyo in hopes of attracting passengers who connect to cities across Asia on partner carriers.
American announced Tuesday that it is moving its operations at Narita International Airport to Terminal 2, which it said would mean shorter connecting times for passengers catching flights in the same terminal on Cathay Pacific, Qantas, and Japan Airlines.
Cathay Pacific and Qantas are partners with American in the oneworld alliance of carriers, and Japan Airlines is set to join oneworld this year. Customers of one airline typically can earn and redeem frequent-flier miles on most flights operated by alliance partners.
American, the largest U.S. carrier, also upgraded to a new, larger Admirals Club at Narita.
Airline stocks, including American's parent, AMR Corp., were boosted Tuesday by a continuing drop in oil prices, which could lead to lower jet fuel costs for carriers. AMR shares rose $2.67, or 7.1 percent, to a 52-week high closing price of $40.23 on the New York Stock Exchange.
Alliances among airlines have been growing as a way of letting carriers offer more destinations without buying more planes or hiring new employees. American says oneworld allows it to expand from 250 destinations to more than 600 in 135 countries.
Other carriers in the oneworld alliance include British Airways and Finnair. There are two major rival groups: Star Alliance, which includes UAL Corp.'s United Airlines and Lufthansa, and Skyteam, led by Air France-KLM and Northwest Airlines Corp.
More customers, especially business travelers, are buying all their travel within alliances to earn mileage, said an executive of Fort Worth-based American.
American's managing director of international planning, Don Casey, said connecting traffic to and from other oneworld airlines grew 70 percent from 2000 to 2005, more than four times as fast as connections between American and other carriers.
Casey said connections at Narita, especially on Japan Airlines and Hong Kong-based Dragonair, will boost the number of China-bound passengers on American's five daily roundtrip flights from the United States to Narita.
That, however, will not stop the airline's attempt to win more nonstop routes to China, Casey said. Last week, the U.S. Department of Transportation gave tentative approval to United for seven new weekly flights to China. American, Northwest and Continental Airlines Inc. had also bid for the flights.
The addition of Japan Airlines will make oneworld a close second to SkyTeam in direct U.S.-Japan capacity, according to American. SkyTeam's Northwest is the dominant carrier on the route. Both Northwest and United, which bought Pan Am's Pacific routes, have a much larger trans-Pacific network than American.
"It takes a long time to catch up because you can't add service wherever and whenever you want," Casey said. U.S.-China routes, for example, are sharply limited by agreements between the two governments.
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American, like most major hub carriers, has been working to boost its international routes, which have more favorable profit margins than highly competitive domestic routes.
Unable to deliver passengers directly to Beijing, American will rely more on its airline partners in Asia.
May 7--American Airlines spent more than a decade lobbying for the right to serve China, an effort that paid off this year when the carrier began flights between Chicago and Shanghai. The move came...