The US Department of Transportation (DOT) and Civil Aviation Authority of China (CAAC) are engaged in quite the battle, which is progressing at a fast pace.
What happened so far this week
If you’re not caught up on what has happened until now, see these two posts:
- Chinese Airlines Will Be Banned From Flying To The United States
- China Loosens Restrictions On International Flights, But Is It Enough?
To briefly summarize:
- The CAAC is only allowing each Chinese airline to operate a single roundtrip flight each week to the US, and in theory is only allowing each US airline to operate a single roundtrip flight each week to China; four Chinese airlines are operating flights, so there are four roundtrips per week
- The CAAC argued that US airlines couldn’t fly to China because they didn’t have any service to China as of mid-March, and the CAAC rather arbitrarily argued that only airlines flying to China in mid-March could resume flights
- The DOT threatened to ban Chinese airlines from flying to the US, and within hours the CAAC backtracked, and allowed each US airline to restart once weekly service to China
The problem at this point is that US airlines want to be able to operate more than a single weekly flight to China, given that the economics of once weekly service aren’t great. The DOT has just issued a ruling that will perhaps cause the CAAC to reconsider their stance.
Chinese airlines will need to reduce service to the US
With the latest negotiating tactic from the DOT, Chinese airlines will only be able to operate two weekly flights to the US total:
- The DOT argues that only two US airlines (Delta and United) want to fly to China right now, and China is restricting them each to one roundtrip per week, for a total of two roundtrips per week
- China has four airlines flying to the US, each able to operate one roundtrip flight, for a total of four roundtrips
- The DOT is making the argument that it’s unfair that Chinese airlines operate four roundtrips while US airlines only operate two roundtrips, given that the agreement is supposed to offer balance
- Therefore the DOT is limiting Chinese airlines to a total of two roundtrip flights per week to the US, and the CAAC can decide which airline(s) will get permission to operate those services
This is quite a negotiation process between aviation authorities in the US and China. Essentially this comes down to US airlines wanting more access to China, and the DOT essentially petitioning on their behalf.
I do think the DOT is in the right here for at least trying to argue this, given the policies we’ve seen the CAAC try to implement.