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Delta plans new Shanghai flight as American puts service on hold

Delta Air Lines hopes to add new service to Shanghai Pudong from its Minneapolis/St Paul hub in 2020, even as American Airlines plans to put two of its China routes on hold.

The SkyTeam Alliance carrier plans to launch a new daily flight between Minneapolis and Shanghai with a 306-seat Airbus A350-900 from June 2020, it says in an application to the US Department of Transportation today. It would need seven US-China zone one frequencies, which limit service to Beijing, Guangzhou and Shanghai, for the route.

"The proposed flights will provide Minneapolis and St Paul area customers with the first nonstop service to China and enhance service at Delta’s hub at MSP, expanding connecting service options for consumers across the Upper Midwest and the United States," says Delta in its application.

The new service would also connect to the networks of Delta's partners China Eastern Airlines and Shanghai Airlines beyond Pudong airport. The US carrier owns a 3.5% stake in China Eastern that it acquired in 2015.

Delta's proposed Minneapolis-Shanghai route is possible with the three frequencies returned by Hawaiian Airlines earlier this month, and the three frequencies returned by United Airlines earlier this year. Hawaiian ended Honolulu-Beijing flights and United Guam-Shanghai flights.

The Atlanta-based carrier says its 20-month launch timeline, which is far longer than the DOT's standard three-month timeline, is a "realistic approach" to acquiring economically viable slots at Shanghai Pudong. Both American and United have previously had to seek multiple start-up extensions as they faced challenges acquiring slots at Beijing and Shanghai airports.

As Delta seeks frequencies for additional service to China, American has applied to the DOT for a waiver to keep 14 zone one frequencies it used for daily service between Chicago O'Hare and both Beijing and Shanghai for a year while it waits for economic conditions to improve. It suspended both routes this month following what it says were heavy losses over multiple years in the markets.

Rapid capacity growth between China and the USA in recent years has pushed yields down in the market. However, growth began to abate this year as both Chinese and US carriers used all of the available frequencies for service between Beijing, Guangzhou and Shanghai and the USA.

Capacity between China and the USA grew 6.1% in 2018 compared to 9.1% in 2017, FlightGlobal schedules data shows. In the first half of 2019, capacity is scheduled to decrease 1% after a 7.4% during the same period this year.

Delta president Glen Hauenstein said earlier this month that the airline's China routes saw a 9% improvement in unit revenues on an 18% capacity increase during the third quarter. The airline relaunched daily flights between its Atlanta base and Shanghai in July.

American says retaining its 14 frequencies through November 2019 would allow it to "rapidly resume those services… at such time the market becomes more favourable".

The Fort Worth-based Oneworld Alliance carrier has said it plans to resume the Chicago-Beijing route once Beijing Daxing airport opens in 2019. China Southern Airlines, which American owns an 2.68% stake in, plans a large base at the under construction airport.

Delta serves Beijing from Detroit and Seattle Tacoma; and Shanghai from Atlanta, Detroit, Los Angeles and Seattle Tacoma, schedules show. American serves Beijing and Shanghai from both Dallas/Fort Worth and Los Angeles.

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