American, Not Delta, Will Receive Last Available U.S.-China Route

Dealing a blow to Delta Air Lines, which also wanted the route, the U.S. government said tentatively on Monday it will permit American Airlines to begin new flights from Los Angeles to Beijing.

The decision by the U.S. Department of Transportation caps a contentious eight months, as American and Delta traded insults in filings over which carrier was more fit to fly between L.A. and Beijing. Both airlines have been strengthening their Los Angeles operations in the past two years, and Delta had been peeved in part because it asked for rights to fly to Beijing before American.

The U.S.-China market remains tightly regulated, with more airlines seeking to fly to China's three most popular cities than the governments will allow. U.S. airlines can fly only 154 flights to Beijing and Shanghai, and with American now planning to fly seven more frequencies to Beijing, only one weekly frequency will remain, making it impossible for Delta to start new service from L.A., unless it moves a flight from another city.

Plenty of frequencies remain for U.S. airlines outside of Shanghai, Beijing and Guangzhou, but with the exception of United, carriers have chosen to not launch new service to so-called secondary cities.

American deserves the new Beijing flight, the government said, because it lacks a flight from the West Coast to China. Delta, meanwhile, already flies to Beijing from Seattle.

"The Department tentatively finds that the potential benefits of selecting American, and thereby adding a third U.S. competitor to the West Coast-Beijing market, outweigh the benefits that would be achieved through selection of Delta," the government said.

A Delta spokeswoman said the airline is "disappointed" by the decision.

"Delta’s proposal would enhance competition at LAX and offer consumers more connections beyond Beijing, in addition to providing a superior experience for customers at both airports," the spokeswoman said.

American will use a Boeing 777-200 on the route, the same aircraft type Delta would have used. An American spokesman said the ailrine is "pleased" with the decision. It expects to start flying the route next year.

"This new service further underscores American’s commitment to providing customers with a world-class global network from our Los Angeles hub," the spokesman said.

Assuming American starts the route, Delta and American will each control 42 of the 154 availably weekly frequencies, the government said.

The U.S.-China Air Transport Agreement was last updated in 2007. Historically, as airlines have approached the cap, diplomats have liberalized the agreements, and that may again happen in the near future. Last year, the two sides held exploratory talks to discuss what a new agreement might include.