Yesterday was the deadline for airlines to get their applications in for seven new flights coming available between the US and China over the next three years. Conventional wisdom says Delta will get this year’s award with Atlanta-Shanghai flights. Next year, United is expected to get San Francisco-Guangzhou while the other spot, which can only be used to second tier airports in China, will likely remain unfilled.
But in 2009, the big competition heats up when four additional daily flights between the US and China come available. All the usual competitors are there (see below), but one that really stands out is . . . MAXjet?!?
I was surprised myself when I got a hold of the that was quietly slipped in to the DOT yesterday before the deadline. Quick refresher – MAXjet flies an all-business class operation between several points in the US and London. While the business class seats aren’t the newest lie-flat technology, they are sold at the cost of last minute coach seats, so the value proposition is strong. The service appears to be doing well so far, and clearly they’re looking for new opportunities to expand.
This application proposes a LAX-Seattle-Shanghai flight on their ~100 seat 767s. I’m guessing they would have done LAX-Shanghai nonstop if they had the range, but Seattle will do for now. (787s anyone?)
How do I like their chances? Not so great. As long as demand for flights to China continues to outpace the number of flights permitted, the DOT is going to hesitate to add a flight with only 100 seats onboard when the alternative could be a 200-300 seat option on someone else. So I have to think that this isn’t going to happen this time, though when things start to open up further, it could happen.
What it comes down to, ultimately, is that the DOT is allowed to introduce one new carrier to the China market in 2009. Assuming Delta gets a flight this year, that would leave US Airways and MAXjet as the two new options for 2009, and US Airways will probably have the edge with their larger planes, even though the Philly-Beijing route is hardly inspiring.
From a business perspective, it would be interesting to see if MAXjet could pull this flight off. The value proposition isn’t nearly the same as flying to London because market business class fares are lower in Asia. That means the potential cost savings are less, and it may be harder to woo travelers. But there are no flights between Seattle and China right now, so it could fill a nice niche.
If I had to put money down, I’d say Continental (Newark-Shanghai), United (LAX-Shanghai), and US Airways (Philadelphia-Beijing) pick up three slots for 2009 with Delta (Atlanta-Beijing) and American (Chicago/O’Hare-Beijing) fighting for the last one.