Fort Worth-based American Airlines has applied to the U.S. Department of Transportation for route authority to fly nonstop from its largest hub at DFW airport to Beijing Capital airport. If approved, American intends to commence service between the two cities on May 7, 2015.
The route will complement American’s existing service between Chicago O’Hare and Beijing, which has been operating since 2010. American also added service from Dallas/Ft. Worth to Shanghai and Hong Kong in June 2014, marking a major milestone in growing its Asia-Pacific network from its largest cornerstone hubs.
From DFW airport, American presently offers service to Seoul, South Korea and Tokyo Narita airport, in addition to Hong Kong and Shanghai. Both Seoul and Toyko are offered on a multi-daily basis, with American providing two daily flights between Dallas/Ft. Worth and Tokyo and Korean Air offering a daily flight from DFW to Seoul, competing alongside American.
Elsewhere in Asia-Pacific, Qantas offers a daily service from DFW to Sydney, via Brisbane on the westbound sector. However, effective next week, Qantas will up-gauge its DFW service from a Boeing 747-400 longreach to an Airbus A380-800, and offer nonstop service between DFW and Sydney in each direction; however, service will be offered 6 times weekly instead of daily, except during high season such as during the summer period in the Southern hemisphere.
American has previously failed in its attempt to connect DFW with Beijing
Ironically, despite the mssive growth in DFW-Asia Pacific connectivity over the past four years, which commenced with Qantas’ arrival into Texas in May 2011, American has previously applied for route authority to operate service from Dallas/Ft. Worth to Beijing in 2006, but lost the bid after the Allied Pilots Association demanded concessions on pay for canceled flights and other items in exchange for supporting the China flight, since the flight time on the outbound sector exceeded limits in flying time and workday length in the pilots’ contract at the time.
Weeks before the decision was to be made, American had to make a last-minute amendment to its application by re-routing the flight via Chicago on the outbound sector, which would allow for the Chicago to Beijing flight to operate within contractual agreements for pilots. However, this more or less nullified the business case to grant the award to American and DFW, as it would require an additional stop on outbound itineraries to China and add too many variables that were neither logistically nor financially justifiable.
Had it not been for the APA, American would have likely won the rights to fly to Beijing, although one could argue that it was a blessing in disguise given that the past decade has been tumultuous for American, as well as the transpacific market and the state of the airline industry as a whole.
Back then, American was competing against Northwest, Continental and United for a single slot award to fly to China. The US Department of Transportation chose United’s application to fly from its Washington Dulles hub to Beijing over Northwest’s bid to operate Detroit to Shanghai, Continental’s to operate Newark to Shanghai, and American’s to operate DFW to Bejing. Ultimately, United won its bid to connect its Dulles hub to Bejing, supported by its “Capital to Capital” campaign.
During successive years, the remaining contenders eventually received approval to operate their Chinese routes as the PRC granted additional rights to US carriers. Northwest commenced nonstop service from Detroit to Shanghai, which is now operated daily by Delta after its 2008 merger with Northwest, and Continental began flying from Newark to Shanghai, which is now flown daily by its 2010 merger partner, United.
American’s existing service from Chicago to Beijing has produced mixed results
American, however, opted to re-apply for route authority to Beijing in 2009, but instead from its Chicago O’Hare hub. Services commenced in spring 2010 after American requested a year-long extension from the US DOT to delay the startup date from its original plans due to the effects of the global financial crisis. The saga did not end there: on the day of the inaugural flight, American had expected to receive “placeholder” daytime landing slots into Beijing Capital airport, with a mid-afternoon arrival and departure time from Peking that could facilitate connecting itineraries and allow for the plane to turn around quickly.
Unfortunately, American was instead given unfavorable landing and take-off slot times in Beijing, with a late evening arrival between 21:00 and 23:00 and an early-morning return departure at 6:00 AM, which limits inbound and outbound connections on the Bejing end. By comparison, American’s two competitors on the Chicago – Beijing route, United and Hainan Airlines, but arrive into and depart from Beijing between 1 and 6 pm.
American has since been able to work with Chinese authorities to allow for a later morning departure time from Beijing on the return flight to Chicago, but the inverse effect of decreased aircraft utilization, since the plane now sits idle at Beijing for an additional 3-4 hours, is still a large problem for American.
Still, the route has weathered through tough times at American, notably after it filed for chapter 11 bankruptcy protection in 2011. Despite rumblings of underperforming load factors and yields, the Chicago to Beijing route should hopefully see improvement once American is able to re-configure its remaining 777-200ERs from a 3-class cabin configuration to 2-class, and continued codeshare agreements with Hainan should help.
However, what is most important is not only hoping for improved landing and take-off slot times for its Chicago route, but also insuring that history doesn’t repeat itself should DFW-Beijing be given the green light.
Latin American connections key to promoting service, but appeasing Chinese regulatory authorities is beyond crucial
Although no schedules nor inventory have been loaded into the GDS, reportedly, American is proposing the following times for its DFW-Beijing flight:
AA89 DFW–PEK 1030-1345+1 772
AA88 PEK–DFW 1545-1730 772
In an effort to avoid making the same mistakes from the past, American is marketing DFW’s powerful Latin American network to connect passenger flows to and from Beijing to Central and South America. The carrier was successful in obtaining favorable slot times to Shanghai this past year, with a 2 pm arrival and 4 pm departure from Pudong airport, although arguably securing decent landing times at Shanghai is much less complicated than at congested Beijing airport.
Still, if the same logic is applied towards the Beijing route, American may have a winning bid. The submission deadline for IATA’s spring 2015 slot conference is October 9, meaning that American should know by mid January if the slot times it has requested are available.
The time has come for the New American to play catch-up to its US peers, Delta and United, in building up a competitive transpacific network ahead of its merger integration with US Airways. Much like Delta is investing in Seattle, American is investing in Dallas/Ft. Worth, and while each city have various advantages over the other in terms of which can support a stronger gateway hub, the future will present some very interesting data points about the long-term viability of these experiments.