United Airlines Wins Right To Fly to China From Dulles

January 10, 2007



A fierce five-month lobbying and public relations fight loaded with economic impact studies and political symbolism ended yesterday with a victory for Washington area air travelers yearning for a direct link to China.

Starting in March, United Airlines will be allowed to operate daily nonstop, round-trip flights between Washington Dulles International Airport and Beijing. Supporters and analysts say the daily flights will pump millions of dollars into the local economy, create several thousand jobs and perhaps lead to the construction of new office parks near Dulles. It will also link the capitals with nonstop flights in plenty of time for the 2008 Summer Olympics in Beijing.

"China represents a huge opportunity for local companies," said Gerald L. Gordon, president and chief executive of the Fairfax County Economic Development Authority. "If you have to change planes in an inconvenient place rather than take a direct flight, it's amazing how many people just won't bother. . . . Every time a new market opens up, it results in business going both ways."

United beat Northwest, Continental and American airlines, which campaigned for the daily flight between China and other U.S. cities, including Dallas and Newark. The contest drew more than 4,000 letters, motions and other documents from the airlines, legislators, mayors and frequent fliers supporting their carrier's bid.

The flight is expected to provide an economic boon for the Washington area of at least $275 million and add 3,400 jobs, according to a study prepared for the Metropolitan Washington Airports Authority. James C. Dinegar, president and chief executive of the Greater Washington Board of Trade, said: "We'll see some interesting office parks and satellite business offices open up around the airport over the next several months and years. When people get off the planes, they're not going to want to drive for another three hours."

China restricts the number of flights from the United States, so the opening of a new route attracted intense interest from the four airlines. China's economy is booming, passenger traffic between the two countries is growing, and Beijing is hosting the Olympics next year.

With a limited number of flights -- U.S. and Chinese carriers operate an average of 11 daily nonstops between the two countries -- airlines are able to charge higher fares than on other international routes.

Analysts predict that United could earn $20 million to $50 million a year on the route. The company's chief executive, Glenn F. Tilton, declined to be specific but said he expected the route to be profitable.

"It's as big a day for you guys in Washington as it is for United Airlines," Tilton said, adding that the flight would bolster United's position at Dulles, where the carrier has been expanding its domestic and international service. "This makes Dulles a legitimate gateway to international destinations for us."

To get to China today from the Washington area on a U.S. airline, passengers must connect through Newark, Chicago or San Francisco. A flight to China from Detroit connects through Tokyo.

American had hoped to fly between its hub in Dallas to Beijing; Continental sought to link Newark and Shanghai; and Northwest wanted to fly between its hub in Detroit and Shanghai. Each airline, backed by an assortment of business and civic groups, stressed in its bid to the Transportation Department the economic benefits the flights would bring to local and regional economies.

Early in the process, several analysts said it appeared that American had the strongest application because of its big hub in Dallas and support from 32 senators and nearly 100 House members. American has only seven flights a week to China through Chicago, and transportation officials had previously seemed interested in spreading out competition. United and Northwest operate at least 21 such flights. Continental operates seven flights a week to China out of Newark.

But American was unable to resolve a contract dispute with its pilots over duty hours and sought to amend its application to allow a stop in Chicago on the way to the Chinese capital. It eventually withdrew from the competition.

Northwest and its supporters said it would link more cities than its competitors through Detroit. The Wayne County Airport Authority said that a flight would feed demand in China for the area's expertise in building cars and other products.

Continental stressed that its flight would link two huge metropolitan areas: New York and Shanghai, the business center of China. The airline and its supporters also noted that the New York area has the largest Chinese population in the United States.

But the Transportation Department said United presented a stronger application because it would tap a growing market that did not have a direct flight to China. Using a Boeing 747, United will also offer more daily seats than its competitors would have on their flights, the department said.

More than 90,000 people traveled between China and Washington in the 12 months before March 2006, the department said.

It also noted that United has a deal with Air China that would boost service to 16 Chinese cities beyond Beijing.

The company and its supporters highlighted the symbolism of linking the two nations' capitals for the first time. The route would also benefit government officials seeking to visit counterparts in Beijing, analysts noted.

"Keep in mind that some people in Washington are selfish and this would provide better government travel between Washington and Beijing," said Michael Miller, an airline analyst with the Velocity Group. "With all of the support that United received in the Washington area, it obviously swayed politicians to push for this."