Star Alliance member Air China plans to operate a flight within the United States, from New York to Los Angeles. Three times a week they intend to operate:
- Beijing to New York JFK
- New York JFK to Los Angeles
- Los Angeles to Beijing
Given that flights between the U.S. and China remain limited, that would allow them to serve New York without limiting their Los Angeles service as much. They partner with United, and could pick up connections from them, but they don’t work closely there and Newark isn’t New York JFK. They’d rather sell one-stop same-aircraft connections.
The trick is that they will only be able to carry their own connecting passengers on the New York JFK to Los Angeles flight. You won’t be able to buy a ticket for that flight alone. It’s also only going to operate in one direction: there won’t be Air China service from LA to New York.
Most interesting to me is the CA triangle route PEK-JFK-LAX-PEK 3x weekly. With that path the LAX-PEK route will be served 5x weekly, plus one LAX-SZX.#AvGeek
— Seth Miller (@WandrMe) September 14, 2023
Qantas used to fly roundtrip between New York and Los Angeles. That was how they’d serve New York, flying passengers from Australia to Los Angeles and continuing with their own aircraft to New York, and then picking up their Australia-bound passengers in New York, flying them to Los Angeles and then on to Australia.
They weren’t allowed to carry local traffic between New York and LA. In fact, they got in trouble with the Department of Transportation for selling seats in conjunction even with international codeshares on other airlines.
Specifically, Qantas was fined $125,000 (with half forgiven) for selling tickets in 2015 and 2016 on Qantas codeshares for Air Tahiti Nui Los Angeles – Papeete flights and American Airlines Los Angeles – Auckland flights.
Qantas argued that this was legal, that in 1959 the U.S. said that “a foreign carrier may incidentally transport within [the U.S.] only that traffic which it brings in or carries out” and that codeshares count, but the DOT disagreed with this interpretation. Presumably since it wasn’t super clear cut, DOT settled cheap for the win while Qantas chose not to fight it because stopping the practice wasn’t costly to them, and $62,500 wasn’t a big deal for the Australian flag carrier either.
A fifth freedom flight involves travel between two countries not touching the airline’s home country. LAN, for instance, in the past flew New York to Toronto. That’s not what this is. Cabotage would be a foreign airline flying domestic passengers in another country. That’s not allowed even via a third country.
One area that some airlines have gotten in trouble is flying passengers between the U.S. and Guam via Seoul or Tokyo (which is a convenient routing). You cannot buy a ticket on Air Canada, for instance, Seattle to Vancouver to New York even though it’s 20% shorter than flying via Dallas on American Airlines.
First flight I ever took to Australia in 1992 was using DL points on Air New Zealand. Flight was LA-HNL-AKL-SYD (connection in AKL). Flight LA-HNL was exactly like this. Think it was mainly for extra fuel but may have picked up a few new passengers to AKL. We were even able to get off the plane and wander the airport for a while but, as you noted, even then, Air New Zealand couldn’t sell the LA-HNL leg.
LH used to have a FRA-DFW-IAH flight. Up until the mid 90s, I believe. Same situation…no local traffic. Non- revs from other airlines were able to take it, however.
There are many many reasons to allow foreign flag carriers to carry passengers within the United States. First, there can be massive fuel savings, which is good for the environment. That’s what everybody wants, right? Second the big three US carriers have near monopoly status. Why not allow foreign flag carriers? Yes it’s competition. What are they afraid of? three it’s much more convenient for US passengers to have another option and it would bring much needed price competition to certain routes.. inflation remains a huge problem, so bringing down airfares, would help contribute to lowering inflation. That’s a good thing, right?
Now, in reality, we know this will never happen because Congress is bought and paid for by the US airline industry. There are no rules for airlines in the US. They can do whatever they want to customers and have no repercussions. Delayed for hours because we don’t have any employees to operate the flight we sold you? Delayed because we forgot to put enough fuel on the aircraft? Too bad so sad. We live in a world of crony capitalism.
EVA Airways (BR) used to do it from TPE – SEA – EWR years ago before they moved to JFK.
Rjb,
the REAL AND VALID reason why foreign carriers should never be allowed to fly passengers solely within the US is because no other country can offer the US anything reciprocal.
The reason why there are dozens of cities in the US that are ghost towns is because the US exported manufacturing jobs to Asia under the promise of free trade. The problem is that the US got nothing in return.
As a US taxpayer, I would far rather that fellow Americans have high paying jobs rather than be forced onto government welfare programs.
And none of that has anything to do with what Chinese airlines will do by flying flights within the US but without the right to carry passengers solely within the US.
The Chinese government has dramatically limited the amount of flights that can operate between the US and China. Delta’s President said yesterday that there is about 10% of the number of pre-covid flights available; China has agreed to up the number again in a few weeks but the DL Pres says the US will probably end up with about 25-33% of pre-covid capacity to China compared to the current 50% to Europe.
AA, DL and UA all currently operate the exact same number of flights to China – 4 flights/week EACH.
DL and UA are both jockeying to stay the same size in China; Delta’s proposal includes splitting its service between LAX, SEA and DTW but all to PVG. UA proposes taking both PVG and PEK to daily but all from SFO while AA proposes doing everything from DFW.
Given that UA had a substantial size advantage to China pre-covid, they will be competitively at a disadvantage if AA and DL pick off large parts of the country and DL surrounds SFO w/ flights to PVG from LAX and SEA.
The Chinese carriers are also figuring out how to maximize their route awards; flying circle routes is simply one strategy they will use.
@Tim Dunn you sound like Cleavon Little in Blazing Saddles. US policy should follow what is best for people in the country, not for businesses at the expense of those people. No reason to shoot yourself in the head because others are doing so.
Gary,
displacing tens of thousands of US airline jobs so foreign carriers can take the US airline industry just as foreign workers have taken manufacturing jobs IS NOT good for the country.
You and other consumer driven people that can only see what you benefit at the expense of others is more than offset by policy makers and unions that will ensure that the US airline industry is not sold out as US companies have been.
@Tim Dunn – You’re so silly. Foreign airlines operating domestically wouldn’t displace tens of thousands of U.S. jobs, they’d need U.S. airport agents, U.S. flight attendants and U.S. pilots along with mechanics and rampers et al. Immigration and work authorization is a whole different beast.
U.S. unemployment is 3.8%, right now isn’t the time to make the ‘they’ll take ‘er jobs’ argument.
More flights, lower ticket prices support jobs and the economy. And in any case, my actual “press the botton” take is to allow foreign ownership of U.S. airlines rather than to allow foreign airlines to operate in the U.S. (in which case all rules that apply to U.S. carriers would still apply to foreign ones). While I think there are merits to the latter position, it’s by no means necessary to gain some of the benefit.
It’s not as advantageous as some suggest, because gates and slots at congested airports remain binding constraints. We might just get more Breezes, rather than a new JetBlue.
As quality of service on US carriers continues to decline all while the flying public is forced to read headlines about real/threatened union strikes and the associated eye-popping pay raises and entitlements, more and more of the flying public will come to support legalizing domestic flights by foreign carriers.
This will be great for one way hidden city flights. For those who never wanted to take a flight to Asia but want to see how Asian crews perform their jobs can book a flight from New York to Beijing and simply get off in Los Angeles. Less jet lag and less flying time. The flight should come with a meal. I flew one way from PNH to PEK to LAX on Air China once (the initial flight the other way was an almost free mileage program flight on EVA). There was nothing objectionable about the flight. I had a long layover in Beijing so I got a free transit visa and went to a hotel outside of the airport.
Gary,
I am not a die-hard unionist by any means but I will support them 100% in protecting US airline jobs. All of them.
You simply refuse to acknowledge that there is simply nothing any foreign carrier or government could offer US airlines that remotely is reciprocal for US airlines.
Reciprocity has been the longstanding position of global aviation since its inception and that is hardly a US concept.
The fact that you argue for destroying another US industry so that you can get what you HOPE will be lower fares for you (do you really think that Air China would be offering a deep discount over US carrier rates?) says volumes about what you think of US workers.
It’s not happening, Gary.
I get that you love to argue including w/ me to create page views that others read – and you have done a great job of covering articles this week including sixteen variations of DL’s news – but this is not a topic you and I will see eye to eye on. When you post good articles, I am happy to put a little change in your pocket.
All the best to you and again thanks for a great week of objective articles even if my position – to no surprise – is different from many of your readers – or you.
@Tim Dunn – you miss the point. There is no reason to hold out for other countries to grant reciprocal access. Protectionism for the U.S. market is detrimental to consumers and to the economy. Holding a gun to our own head because others hold a gun to theirs is stupid. The U.S. shouldn’t make its economic policies contingent on the policies of countries with weaker economies and institutions. Why support lowest common denominator?
@jns. The idea of “Asian carriers shows ignorance. That would be like calling Delta an African carrier, akin to United Nigeria, because of African American employees.
Air China is not like EVA or Singapore Airlines in terms of service
Cabotage would be OK if the terms are right, like the EU.
Chile allows cabotage.
I’m not sure it’s a good idea to get in the middle of a debate between Gary and Tim, but here goes.
It’s disingenuous to say that because unemployment is low that we have no risk of job displacement. You and I both know that many of those jobs are extremely low paying service industry jobs. So sure, a pilot can get laid off, get a job at McDonalds, and still be employed. But there is certainly an impact.
As to competition, you also know that the middle eastern and Asian carriers are insanely subsidized. And yes, I know the US airlines gets lots of handouts and I know your opinion on that. But they aren’t state owned and allowed to operate at a loss as a national marketing tool.
So yes, allowing foreign carriers (and BTW you mean those from low cost countries) in would be great for premium seat availability and may drive down costs slightly. It would also lose higher paying jobs to companies that don’t play by the same rules.
Not that any of this is going to happen anytime soon, given that the JSX can’t even get past the airline lobby.
@Peter you’re ignoring that this is good for employment and the economy, and if Qatar wants to subsidize the U.S. economy we should let them. However it’s mistaken to suggest that ownership stakes in airlines is a purely foreign phenomenon (it’s not just Emirates and Singapore Airlines, but Air France) it’s a U.S. one as well, the federal government took ownership interests in nearly every domestic carrier during the pandemic. Ed Bastian says that Delta is investible because the pandemic proved that when the industry needs it, taxpayers will subsidize.
And no I do not mean allowing foreign carriers ‘from low cost countries’ to *own U.S. airlines* where U.S. laws still apply to domestic markets.
I agree that this will not happen, airlines lobby effectively against competition.
Gary, I’m willing to give you $2 bucks to keep the Dunn clown off your web page.
@Gary fair point about government ownership, and I’m not informed enough to know the degrees of government subsidization and how they impact competitiveness. My perception is that Chinese state-owned companies are “propped up” by the state as a normal course of doing business, rather than in emergency situations. Yeah, the same could be said about Air France, but they hardly are a risk to US airlines’ cost competitiveness.
I guess it comes down to a) the extent to which companies from low wage geographies can “import” their labor practices (using the H1-B process, using lower cost bases, bolder union busting, etc.), and b) how much Americans care about foreign control of key industries, both from an ego and national security standpoint.
Certainly the immediate effect of Qatar subsidizing the economy would be positive, but you have to think long term, too. As in, looking back 30 years and wondering WTF we don’t have a domestic semiconductor industry.
Protectionism has usually proven to be detrimental to the country practicing it. However, a grossly one-way trade arrangement we used to have with China severely degraded many of our critical manufacturing capabilities. As is usually the case, these things don’t have to be binary, and I think a balanced approach is the best option. A foreign carrier operating a domestic flight only for the passengers it carried into the country is a great convenience for the passengers and a load off an already strained capacity experiencing shortages. This is not going to cause any U.S. pilot to be laid-off. We should let this happen because it’s beneficial for us overall. We should stop it when economic conditions change and it no longer provides an overall benefit.
There is a proposal at the moment to permit cabotage by foreign carriers in Brazil given the very limited competition (mostly caused by overregulation) there and the very underutilized capacity in most Brazilian airports. All large countries should consider doing the same to benefit consumers and prevent rent-seeking by US pilots and cabin crew unions.
One would hope that CA will offer JFK-LAX-PEK at a discount given the indirect route.
it is not a surprise that people like Alan, who can’t contribute to the actual conversation, wants to get rid of people who actually can intelligently discuss the topics which Gary posts.
And, Gary, you and I and everyone else knows full well that economies including unemployment rates change and will be worse in the future while opening domestic markets to foreign competitors is a permanent move.
The US under Nixon thought that bringing China into the global marketplace would help the world but all it has done is to export millions of jobs from developing countries to China which has become the world’s factory while western developed economies are more in debt because their workers are simply not generating the income necessary to maintain high standards of living.
It isn’t about protectionist airline unions; it is about learning from the mistakes of other industries including semiconductors, metals and textile manufacturing, and the US is now in the position of subsidizing the redevelopment of some of those industries in order to protect US security – let alone the US economy.
The US is the world’s largest market and has embraced open markets but airline service is simply something there is no possibility to reciprocate with anyone else.
Let Chinese carriers fly coast to coast with 20 passengers if they want to serve both cities.
They USED TO FLY to both cities on the same day but cannot do it any more because the Chinese government imposed limits on the number of flights that are below what China and the US agreed to and those limits have nothing to do with covid but to prevent the Chinese government from having to subsidize their global airline industry against foreign carriers, esp. from the US.
and the best thing that the US can do to benefit consumers is to stimulate strong competition.
Delta just announced their summer 2024 domestic expansion which includes more than a dozen new routes esp. between the eastern and western US. It is doubtful that any other airline can announce as extensive of an expansion in 2024 and most of DL’s new routes are in markets where it is not the strongest carrier, esp. in secondary CA markets.
and Delta hasn’t announced its summer 2024 international schedule but is willing to jump back into China as much as the Chinese government will allow them
@ Tim – nothing has to be permanent, certainly not what’s at issue here. That’s misleading.
just tell us examples of where a domestic market has been opened to foreign competitors and then closed again
Focusing on USA-China: Huawei products via security concerns, cotton from Xinjiang via US farmer/human rights concerns, and many many more.
It’s nothing more than archaic protectionism not allowing foreign carriers to operate domestically in the US. Allowing foreign competition would help to force domestic airlines to either up their quality or go out of business.
@Tim Dunn West Germany was opened to foreign carriers, closed, then somewhat opened again.
@ Explorer08 – not sure about that. Again, it doesn’t have to be a binary thing of all or nothing. In this particular case of Air China wanting to transport only the passengers it brought into the country at one airport to another, I do not see a downside given our current domestic capacities. Regardless of whether its reciprocated in China, it’ll be beneficial for us. As for opening up our entire domestic air market, I think such a broad action should be reciprocal, otherwise our carriers get much more meaningful competition domestically without being able to compete at their new competitors’ home turf. I do not think that would that be a net benefit for us
@Tim Dunn If a foreign airline were to operate in the United States, do you think they would import people to work for them or hire Americans? Also, if the government were to allow cabotage, I am sure they would create rules to protect American jobs in the aviation industry.
Your argument makes no sense, so why are you debating? Does Tim Dunn care about American jobs? No, I think not. Tim Dunn is just afraid of a foreign carrier putting the #2 U.S. Airline (Delta) out of business by providing a better product.
I see the “pro America” and “anti China” comments here, but I can provide an alternative perspective. Having flown multiple Asian airlines multiple times, both domestically and internationally, including Air China, JAL, China Eastern, Hainan, Cathay Pacific, ANA, and more, they all blow away the best of our domestic airlines. People can complain all they want about reciprocity and such, but I’ll never fly a domestic airline again to Asia. The service on Asian carriers puts ours to shame.
@Derek – “….If a foreign airline were to operate in the United States, do you think they would import people to work for them or hire Americans?”
Yes and no. In part, this occurs today. If one were to look around the major U.S. gateways/international airports, you’ll find that the majority of the senior ops positions & higher (i.e. station mgr, cargo mgr, maintenance mgr, country mgr) at the foreign air carriers are occupied by individuals from the home country on U.S. employment VISAs.
Reasons for the practice range from “cultural”, to preparing individuals for promotional opportunities once back home.
DOT and FAA has just extended slot exemptions for federally slot controlled airports through the fall of 2024.
The biggest thing that will reduce airfares and stimulate competition is to properly staff ATC.
Gary, I say yes to foreign carriers operating U.S. domestic routes. U.S. airlines could use more competition. We want better service.
This is a way to increase their surveillance on our country. Why do we allow China to do all these things (own property, etc.)? They would never allow us to do the same.
Just putting it out there. In 2021 my dad flew from DFW to Shanghai, and that ONE WAY ECONOMY costs over $5000 (yes you read it right, 5 thousands) USD. That’s like 15x the price compared to pre covid, where you could have gotten round trip for $700.
Of course the airlines got a taste on that ridiculous profit and would love to see the price staying high, with way more demand than supply.