Oct. 20 (Bloomberg) -- American Airlines, which won approval for a new route to Shanghai this month, is considering adding flights to Hong Kong and Guangzhou, China, because of increasing travel in the world’s fastest-growing major economy.
“Demand in China is very robust,” Will Ris, senior vice president of government affairs at American, the third-largest U.S. carrier, said yesterday in an interview in Tokyo. China’s growth will lead to “increasing demand all over the place for more service,” he said.
American, a unit of Fort Worth, Texas-based AMR Corp., is expanding service to China and Japan after winning preliminary immunity from antitrust prosecution this month to cooperate with Japan Airlines Corp. Passenger and cargo traffic at Chinese airports surged 23 percent last month from a year earlier, according to the country’s aviation regulator.
“It will be easier to evaluate those markets once we have the immunity with JAL, because then we can then determine what markets in China are better served by Tokyo rather than direct non-stop to the U.S.,” Ris said. He didn’t specify which U.S. cities might be connected with Hong Kong or Guangzhou.
The antitrust immunity for American’s cooperation with Tokyo-based Japan Air is subject to an “Open Skies” agreement between Japan and the U.S. The agreement will be signed Oct. 25 and will come into effect the same day, Japan’s transport minister Sumio Mabuchi said last week.
American predicts the agreement will add $100 million annually in revenue for JAL. The U.S. carrier earlier this year persuaded Japan Air to stay in the Oneworld alliance and reject an offer from Delta Air Lines Inc. to join the SkyTeam group.
“We’re on track on all of our predictions,” Ris said. Cathay Pacific Airways Ltd., Hong Kong’s biggest carrier, is also a Oneworld member.
American plans to start daily flights between New York and Tokyo’s Haneda airport in January, adding to its service between the American city and Tokyo’s Narita airport. The carrier also flies to Narita from Chicago, Dallas and Los Angeles.
American won approval Oct. 7 to fly to Shanghai from Los Angeles. It already flies to Beijing and Shanghai from Chicago.
AMR is scheduled to report third-quarter earnings today. The company may post net income of about $116 million, its first profit in two years, according to the average of five analyst estimates compiled by Bloomberg.
AMR rose 14 cents, or 2.2 percent, to $6.52 yesterday in New York Stock Exchange composite trading. The shares have fallen 16 percent this year.
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