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Big US airlines back move blocking Chinese flights to 'ensure fairness' in the skies

The U.S. government’s retaliatory measure denying Chinese passenger planes entry to the world’s largest economy was mostly supported by major air carriers on Wednesday, which applauded the move as a way to “ensure fairness” in the skies.

Acting on the Chinese government’s denial of requests by U.S. airline carriers to resume passenger flights to and from China, the U.S. Department of Transportation (DOT) issued an order suspending Chinese carrier passenger flights to and from the U.S., starting no later than June 16.

On March 12, China’s civil aviation authority (CAAC) imposed limits on international flights, designed to prevent the spread of coronavirus. According to the DOT’s notice, the move denied U.S. carriers a fair and equal opportunity to compete between the two markets, in violation of the Air Transport Agreement.

The department will allow Chinese passenger flights to continue if Beijing grants U.S. airlines their “bilateral rights to conduct passenger air service to China,” the agency said in the notice.

An arrivals board showing a cancelled flight from Wuhan to Heathrow Terminal 4, London, as the Government's Cobra committee is meeting in Downing Street to discuss the threat to the UK from coronavirus. (Photo by Steve Parsons/PA Images via Getty Images)

“Currently, four Chinese carriers and no U.S. carriers operate scheduled passenger flights between the U.S. and China,” the DOT said. “U.S. carriers have asked to resume passenger service, beginning June 1st. The Chinese government’s failure to approve their requests is a violation of our Air Transport Agreement.”

Flight data firm OAG said, so far this year, Chinese carriers have flown 1,431 flights to or from the U.S., while U.S. carriers during the same period have flown 724 flights to or from China.

China maintains that its capacity limitations do not violate the agreement, according to the notice.

The U.S. government’s action was largely backed by major carriers.

"We support and appreciate the U.S. government’s actions to enforce our rights and ensure fairness,” a Delta Air Lines Inc. (DAL) spokesperson wrote in an email to Yahoo Finance. The company said it had postponed restarting China routes because Beijing had not approved its applications. A pending application, which also has not been approved, requests that flying begin on June 11.

United Airlines Holdings Inc. (UAL) told Yahoo Finance, “We look forward to resuming passenger service between the United States and China when the regulatory environment allows us to do so.”

And American Airlines (AAL) told Yahoo Finance that its scheduled flights to Beijing and Shanghai are slated to resume in October. However, asked whether or not the Chinese government had denied applications from the airline to resume service, the company deferred to Airlines for America (AFA), which issued a statement saying the organization believed the DOT’s order would ensure fair and equal opportunity for passenger airlines with respect to service to and from China.

“We hope that this process will protect the rights afforded to U.S. carriers under the current U.S.-China Air Transport Agreement,” AFA said.

The still raging coronavirus outbreak has resulted in cancelled flights between U.S. cities and China and Hong Kong that cost U.S. airlines between $313,000 to $1.1 million for each day those flights are cancelled, according to DOT data, but depend on the carrier.

United, Delta, and American comprise the group of U.S. carriers with routes between the U.S., China, and Hong Kong. All issued temporary reductions and cancellations starting during the first week in February, in response to health precautions, decreased demand, and U.S. government advisories against travel to the region. 

Collectively, the “Big Three” domestic carriers generated more than $186 million during the third quarter of 2019 from travel between U.S. locations and China/Hong Kong.

The DOT said it would continue to engage with its Chinese counterparts.

Alexis Keenan is a reporter for Yahoo Finance. Follow on Twitter @alexiskweed.

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