American vying for service to China

Airline asserts that it can promote foreign policy objectives for U.S. WASHINGTON - American Airlines Inc. wants to get into the foreign relations business. And it has set

Friday, March 3rd 2000, 12:00 am

By: News On 6

Airline asserts that it can promote foreign policy objectives for U.S.

WASHINGTON - American Airlines Inc. wants to get into the foreign relations business. And it has set its diplomatic sights on China.

Eager to win new flights to Beijing and Shanghai in April 2001, airline officials emphasized foreign policy objectives in a formal application for the routes filed Tuesday with the Clinton administration.

"At this point in the history of our two countries, the need to develop personal, people-to-people contact is imperative," said Donald J. Carty, American's chairman and CEO.

Under an agreement with China, only one new airline and 10 weekly flights can be added. American, which wants to fly to Beijing and Shanghai from Chicago, is stressing its ability to deliver people to China because it is competing with two all-cargo carriers.
"Cultural and economic ties can only be shaped by people and not by packages," Mr. Carty said.

American proposes to fly both passengers and cargo on Boeing 777 aircraft with daily flights to Shanghai and three weekly flights to Beijing. Federal Express currently flies cargo to China, and United Airlines and Northwest Airlines fly both passengers and cargo there.
United Parcel Service and Polar Air want the new authority, which the Department of Transportation is expected to award this year. And Delta Air Lines also wants to serve China with flights from New York and Cincinnati.

Mr. Carty said American would eventually like to offer flights to China from Dallas. But service from Dallas would require an expansion of the air agreement with China, as well as longer-range aircraft.

By flying out of Chicago, American officials said, they could offer convenient passenger service to a greater number of cities than Delta can from New York. Industry officials see UPS as American's chief competition, because the cargo carrier has enlisted the political support of its powerful Teamsters union.
Delta officials said their proposed nonstop service from New York would fix a "glaring omission in the current pattern of U.S.-China services." UPS officials said they have the support of 41 senators and 300 House members for their application.

"Our mission is to enable global commerce," said Jim Kelly, chairman and chief executive officer of UPS.

Despite American's foreign policy appeal in its application, Mr. Carty downplayed politics during a meeting with reporters Tuesday in Washington.

"Quite often in these cases, when two applications are pretty close in benefits, the weight of the political interests of the parties does inevitably enter into this," he said. "In this case, there will be some clear distinctions between the quality of the applications."
Even so, American is waging a public relations campaign for the routes.

It is competing with UPS for backing among Illinois political leaders, saying it filed 10,000 letters of support with its application. People can e-mail support to department officials and Congress from www.AAChina.com, the airline's new Web site.

American won the endorsement of Alfred Kahn, widely regarded as the father of airline deregulation. Mr. Kahn, a political economy professor at Cornell University, was a high-ranking aviation official in the Carter administration and led the move to deregulate the industry.

"The ultimate justification for granting the American application is not simply the equalization of the competitive opportunities ... but the intensification of competition and the consequent benefit to travelers," he said in American's application.
Mr. Carty said Mr. Kahn was not a paid consultant for American.