American 'committed to China' despite route withdrawal
American Airlines is cutting its Chicago O’Hare-Beijing Capital service later this year because of overcapacity in the market, the carrier has confirmed.
The airline will end the non-stop ORD-PEK service in October 2018, with the last westbound flight on 20 October and the last eastbound flight on 22 October.
“The current fare environment severely limits our ability to successfully compete between Chicago and Beijing,” said Vasu Raja, American’s vice president of network and schedule planning.
“We remain committed to China and anticipate that moving to the new Beijing airport in the future will improve the viability of the route through the additional connectivity in conjunction with our codeshare relationship with China Southern in the long run.”
American began operating ORD-PEK in April 2010 and competes on the route with Hainan Airlines and United Airlines. It said it would now seek a dormancy waiver from the U.S. Department of Transportation on the service.
However, American will continue to operate Chicago O'Hare-Shanghai Pudong, as well as Dallas Dallas/Fort Worth to Beijing Capital and Shanghai Pudong, and Los Angeles International to Beijing Capital and Shanghai Pudong.
According to preliminary figures from Sabre, United had a 43.9 percent share of the ORD-PEK market in 2017, with American on 32.5 percent and Hainan on 23.4 percent. Total passenger traffic on the route declined from 413,163 in 2016 to 361,463 last year.
Competition on US-China routes has increased in recent years, with a number of Chinese carriers opening routes to the US from secondary cities in China.
In 2017, Air China launched Shenzhen-Los Angeles, while Hainan opened routes from Chengdu and Chongqing to both Los Angeles and New York J F Kennedy. In addition, Xiamen Airlines launched Qingdao and Xiamen Los Angeles, as well as Fuzhou-New York J F Kennedy.
Starting in July 2018, Delta Airlines will also resume Atlanta-Shanghai Pudong, previously served until January 2012.
American's decision to end ORD-PEK comes as the US carrier has confirmed it will cut ties with two regional affiliates next year.
The airline will not renew capacity purchase agreements with ExpressJet and Trans States when current contracts expire in 2019, according to a memo to reservations agents. The move is designed to simplify its regional operations.