Page:Department of Transportation Order 2020-6-1 (Notification and Order Disapproving Schedules).pdf/2

 rights... [f]rom any point or points in the United States...to any point or points in the 'People's Republic of China open to scheduled international services” subject to frequency limitations in the case of certain Chinese points. The Agreement also establishes that “each Party shall take all appropriate action to ensure that there exist fair and equal rights for the designated airlines of both Parties to operate the agreed services on the specified routes so as to achieve equality of opportunity, reasonable balance and mutual benefit.”

By Order 2020-5-4, issued May 22, 2020, in the present docket, we fully described how the Chinese aviation authorities have failed to permit U.S. air carriers to exercise fully their bilateral rights with respect to the provision of scheduled passenger services between the United States and China. We recall that discussion below.

As air transportation demand between the United States and China decreased in late January 2020, the three U.S. carriers operating scheduled passenger flights between the United States and China (American Airlines, Inc. (American), Delta Air Lines, Inc. (Delta), and United Airlines, Inc. (United)) drew down their scheduled U.S. China combination services by the beginning of February 2020. Chinese carriers also suspended some, but not all, of their U.S.-China scheduled combination services. In early January 2020, among U.S. and Chinese carriers, there were approximately 325 weekly scheduled combination flights operated between the two countries. By mid-February, only 20 weekly scheduled combination flights by four Chinese carriers remained in the market. In mid-March, Chinese carriers increased service levels to 34 weekly flights.

On March 26, 2020, the Civil Aviation Authority of China (CAAC) issued a “Notice on Further Reducing International Passenger Flights during the Epidemic Prevention and Control Period” (“the CAAC Notice”), which provides that Chinese airlines could maintain just one weekly scheduled passenger flight on one route to any given country. Pursuant to the CAAC Notice, foreign airlines could maintain just one weekly scheduled passenger flight on one route to China. Furthermore, the CAAC Notice provides that Chinese and foreign carriers are required to use their international passenger flight schedules from March 12, 2020, as a maximum limit of the capacity, in terms of frequency of passenger service, that they may maintain in any given international market until further notice. By March 12, U.S. airlines had completely ceased flying passenger service to and from China; however, Chinese carriers generally maintained a degree of passenger service during that timeframe. In establishing an arbitrary “baseline” date of March 12, 2020, as well as the other restrictions cited above, the CAAC Notice effectively precludes U.S. carriers from reinstating scheduled passenger flights to and from China and operating to the full extent of their bilateral rights, while Chinese carriers are able to maintain scheduled passenger service to and from each foreign market served as of the baseline date, including the United States. The Department views these restrictions as inconsistent with the Agreement and has voiced its objections to the CAAC. 2