David Knibb SEATTLE

US carriers collectively have applied for almost twice as many frequencies as the new China-USA bilateral allows. In selecting which requests to approve, Washington faces an array of policy choices.

The application by United Airlines is the most modest and straightforward. Of the 17 new weekly flights allowed between now and next April, it seeks only seven for daily San Francisco-Shanghai non-stop services.

FedEx wants to triple its existing service with 14 new frequencies and Northwest Airlines hopes to add a combination of 11 passenger and cargo flights.

The first issue Washington faces is how much to consider existing rights. Northwest claims the new frequencies offer a chance to correct what it calls an "historical imbalance that has penalised us and benefited United".

United counters that Northwest benefits from its codeshare with Air China, while United is unable to use its All Nippon Airways codeshare to gain more access to China.

The second question is how much to favour non-stop flights over fifth freedom routes. Of the 11 new frequencies Northwest seeks, eight would be via Tokyo. Six of the 14 sought by FedEx would be over Subic Bay. United only requests non-stop flights.

Finally, FedEx is the only US carrier proposing to serve a new Chinese destination. All requests by Northwest and United focus on Beijing and Shanghai, while FedEx proposes new flights to Shenzhen.

How much China's incumbents will benefit from more US frequencies remains unclear. Generally, they fare poorly against foreign carriers. But Beijing's new "Fly-China" policy may ensure them greater numbers of Chinese passengers and international traffic to and from China is rebounding faster than its domestic sector.

Speculation has started over which Chinese airline may win approval when each side can designate another carrier in April 2001. Bets are divided between China Northwest and China Cargo Airlines.

Source: Airline Business