American Begins Direct Flights to China

SHANGHAI, China -- While American Airlines began nonstop service to China with dancers, dragons and an Asian buffet at Chicago O'Hare Airport, things were much quieter at the United Airlines gate.

United has had nonstop flights from Chicago to Shanghai since 2004. But Sunday morning, United officials, facing a competitor on that route for the first time, may have been painfully aware of American's presence.

And United, which emerged from bankruptcy protection early this year, is likely to bump up against Fort Worth-based American even more as American expands further into Asia.

"American and United are always going to be big rivals, and China is no different," said Alan Sbarra, an airline analyst with Roach and Sbarra. "I expect them to compete really hard."

American fired its first shot in the battle for Shanghai this week, launching nonstop service amid the thunder of drummers, costumed dancers and, most important to the airline, enough passengers to nearly fill a Boeing 777 airplane.

The airline spent 14 years lobbying for nonstop flights to China. The inaugural flight was an important moment for American executives, who say expanded international service is a cornerstone of their turnaround strategy.

"We hope this is only the beginning of our expansion into China," said Henry Joyner, American's senior vice president of planning, who flew on the first trip.

In good company

Until recently, United and Northwest Airlines were the only U.S. airlines allowed to fly nonstop from the United States to China. United gained its China routes in the 1980s, when it bought them from Pan Am, which was then in bankruptcy.

American won permission last year for its Shanghai route, beating a competing proposal from Delta Air Lines. Houston-based Continental Airlines was also granted permission to fly to China and began service to Beijing from Newark Airport in New Jersey last year.

American says it hopes to boost revenue by expanding service in Asia, one of the few remaining markets with little or no competition from low-fare airlines. Growing markets in China also attract business travelers willing to pay stiff prices for premium service on the 14-hour flight.

United, also focusing more on international flights, has enhanced many perks as it tries to lure business travelers.

United says it hopes to leverage its long history of flying to China to prevent as many passengers as possible from defecting to American.

"This is a great market for U.S. passengers because there's a predisposition among many American travelers to fly a U.S. airline rather than one of the Chinese carriers," Sbarra said. "That's one of the reasons the routes are so attractive."

In addition to United, American could see competition from Delta, which has requested a route to Shanghai from Atlanta.

The U.S. Transportation Department is expected to approve additional routes over the next four years.

But the airlines' probable competition isn't likely to translate into dirt-cheap tickets to China, said Terry Trippler, an analyst with Cheapfares.com, an Internet travel site that monitors airline-ticket prices.

"Don't expect a fare war on that route," he said. More likely is a battle over service as each airline attempts to outdo the others and lure well-heeled business travelers, he said.

He pointed out that several airlines serve Tokyo nonstop from New York, and "we've never seen a fare war there."

'A really big deal'

American tried hard to make a good first impression with travelers.

When passengers disembarked in Shanghai, they were greeted by scores of Chinese dignitaries. Chinese aviation officials praised American executives and said the flight was a significant advance for business in both countries.

Grace McDermott of Arlington said she was "thrilled" to be on the first flight.

"This is a really big deal," said McDermott, president of the Southwest branch of the U.S. Pan Asian American Chamber of Commerce. She was traveling to Shanghai to promote business relationships with North Texas companies.

"There is a real hunger among Asian-owned businesses to do business in China," she said. "It's an ideal market for many of them because of its growth and their Asian background."

One Wall Street analyst on the flight called it a "no-brainer" for American.

"The trans-Pacific is one of the few markets where the business travelers are still really willing to pay for first-class service," said the analyst, who asked not to be identified because he hasn't yet issued any financial reports on American's new service.

In Chicago, passengers heard speeches by representatives of the Chinese Consulate and the mayor's office before they boarded.

"It is of great significance to businesses in both countries for American to begin flights between these two cities," said Ying Tun, deputy counsel general of the Chicago Chinese Consulate.

Team effort

The flight was made possible, in part, because of thousands of letters and e-mails submitted to the Department of Transportation by American Airlines employees requesting that the airline be granted the service.

The airline also enlisted Asian employees as it planned the flight, taking advantage of their knowledge of Asian culture, customs and food.

Attendant Mary Ng, a native of Singapore, was selected to work the flight because she speaks Mandarin.

"This is a great opportunity for me and an opportunity to use my language skill," she said.

Caroline Womack, a veteran flight attendant, said she was proud to be on the crew of the inaugural trip. In her 40 years as an American attendant, she has worked many inaugural flights, including the airline's first nonstop service to Rome and Dublin, Ireland.

She said she values the chance to explore foreign cities between flights.

"I'm going to retire one day, and I want to see it all," she said.

Business and pleasure

The plane's first- and business-class cabins were full, and coach was nearly 90 percent full.

Takeoff was delayed for a short time in Chicago because the aircraft, loaded down with fuel, passengers and cargo, was required to use the airport's longest runway.

David Weinstein of the Chicagoland Entrepreneurial Center was traveling to Shanghai to help explore business opportunities.

"From a business standpoint, most emerging businesses see enormous market opportunities in China," he said. "If you're not there, your competitors are certainly going to beat you to it."

But not everyone was traveling on business. John and Cindy Brunelli of Mansfield, Mass., planned to watch the world swimming championship, which Shanghai is hosting.

Nicholas, their son, is competing for the U.S. team.

"This is the trip of a lifetime," John Brunelli said. "The fact that it's this special flight, with American making their first trip, well, that makes it even more special."

Fort Worth Star Telegram


Knight Ridder content Copyright 2005 provided via The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

News stories provided by third parties are not edited by "Site Publication" staff. For suggestions and comments, please click the Contact link at the bottom of this page.

Loading