CHINA: New pact pressures Chinese carriers

Chinese carriers are feeling the pressure following last month’s signing of a new air services agreement between China and the US. “We don’t want Beijing to open the air transport market too fast. The pact covering an increase of air services signed in 2004 has already exerted great pressure on us,” China Eastern Airlines President […]


Chinese carriers are feeling the pressure following last month’s signing of a new air services agreement between China and the US. “We don’t want Beijing to open the air transport market too fast.

The pact covering an increase of air services signed in 2004 has already exerted great pressure on us,” China Eastern Airlines President Li Fenghua told China Business News in the weeks before the pact was concluded.

He also noted that “it takes time to integrate China’s culture and service concept with international standards,” pointing out that the country’s airlines lag far behind US counterparts in many aspects including size, financial strength, marketing expertise and management experience.

So far China’s airlines have found operating services to the US difficult. Air China president Cai Jianjiang acknowledged that CA has suffered heavy losses on US routes, pointing to the use of long-haul aircraft paid for in US dollars, the fact that American passengers prefer US carriers, and management issues as reasons. China’s airlines are moving very slowly to increase US service.

At present, there is almost no service to the Central US and just two, Shanghai Airlines and Yangtze River Express, have been added to the list of approved carriers since the signing of the 2004 agreement. They both operate cargo services.