What I hear is that American Airlines Inc. was awarded the right to launch a direct flight from its Chicago hub to Beijing. Service will commence in March 2009.
Although American Airlines already serves more than 110 direct routes into Asia from Chicago (through its affiliates), this will be a highly competitive move against the established United Air Lines Inc. (NASDAQ:UAUA) who already own this direct flight route into China.
United established its foothold in China when it announced its first direct flight into Beijing back in 2001. They later expanded on their development by launching a route from Chicago to Shanghai in 2004, which was set up by 2006. United also has a direct flight from its San Francisco hub to Beijing.
The fact of the matter is, United's moves were in anticipation of an increase in air travel volume due to Olympic crowds in 2008. American's move is a tad late. I suspect, and this is pure speculation, that if China's demand for air travel continue to expand, the Chinese would want to ride Air China Ltd. (HKG:0753), China Eastern Airlines Corp. Ltd (NYSE:CEA) and China Southern Airlines Ltd. (NYSE:ZHN), because of their accessibility in China.
Ideas anyone?
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