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Trump orders to halt Chinese airlines’ access, stoking trade tension
4 min read.Updated: 03 Jun 2020, 07:48 PM ISTAlan Levin,Ryan Beene,Mary Schlangenstein, Bloomberg
The move is the latest in an escalation of tensions between the US and China, which has included disputes over trade, the coronavirus pandemic and the treatment of Hong Kong
The order goes into effect June 16 but President Trump can act sooner if he so chooses, the Department of Transportation said
The Trump administration issued an order suspending passenger flights from China-based airlines, saying it was retaliation for Beijing barring American carriers from re-entering that market, in a continued escalation of tensions between the two nations.
The order issued Wednesday goes into effect June 16 but President Donald Trump can act sooner if he chooses, the Department of Transportation said in a statement.
The move ramps up tensions between the US and China, adding to disputes over trade, the coronavirus pandemic and the treatment of Hong Kong. On Friday, Trump said that the U.S. would “begin the process" of eliminating the policy exemptions that allow America to treat Hong Kong differently than the mainland. China’s leaders recently moved to impose sweeping new national security legislation on the Asian financial hub.
Beijing has prevented US carriers from restarting service to China while four of its airlines have maintained flights to and from American airports this year as Covid-19 erupted, according to the Transportation Department. U.S. airlines had asked to resume service as early as June 1.
“The Chinese government’s failure to approve their requests is a violation of our Air Transport Agreement," the Transportation Department said in an emailed statement.
The order stops short of an outright ban, allowing Chinese carriers to operate one flight to the US for each flight that China grants to American carriers.
US airline shares rose amid a broad market rally and signs that travel demand is starting to rebound. A Standard & Poor’s index of major carriers jumped 6.9% at 12:34 p.m. in New York to the highest intraday level since March 31. United Airlines Holdings Inc. led the rally with a 9.5% surge to $32.75, followed by Alaska Air Group Inc.’s 9.2% advance to $39.53.
The Transportation Department order is aimed at Air China Ltd., China Eastern Airlines Corp., China Southern Airlines Co. and Xiamen Airlines Co. The news came after the market close in Shanghai and Hong Kong, which are major trading centers for publicly held Chinese airlines.
It isn’t clear how the order could impact burgeoning air-freight operations between the U.S. and China.
Several U.S. passenger airlines have begun flying cargo in empty passenger planes as they struggle for revenue during the unprecedented downturn triggered by the virus.
At the same time, couriers such as FedEx Corp. and United Parcel Service Inc. have had to ramp up operations in China to fulfill demand for medical supplies and other equipment.
The trade group that represents large U.S. carriers, Airlines for America, applauded the government’s action. “We believe DOT’s order will ensure fair and equal opportunity for passenger airlines with respect to service to and from China," the group said in a statement.
China’s embassy in Washington didn’t respond to an emailed request for comment.
The Transportation Department on May 22 said China had violated a bilateral agreement allowing airline service between the two countries by failing to respond to requests by Delta Air Lines Inc. and United. The department accused China of unfairly blocking the carriers’ attempts to resume service in that country.
The DOT on Wednesday accused the Civil Aviation Authority of China of being “unable to communicate definitively" when it will allow U.S. airlines to resume flights.
Delta originally sought to resume China flights on June 1 but has had to delay because the Chinese government hasn’t approved its application. It’s currently seeking to restart flights on June 11 between Detroit and Shanghai and Seattle and Shanghai, both with stops in Seoul.
“We support and appreciate the US government’s action to enforce our rights and ensure fairness," the Atlanta-based carrier said in a statement.
American’s last China flights departed on Jan. 31. It’s currently set to resume flights to China in October. American had an average of six total daily nonstop flights to the cities of Hong Kong, Shanghai and Beijing from Dallas-Fort Worth and Los Angeles. Hong Kong isn’t covered in the DOT order.
United also plans to resume three routes to China as early as this month, pending regulatory approval. That would be for service from San Francisco to Beijing and Shanghai, and between Newark, New Jersey, and Shanghai.
“We look forward to resuming passenger service between the United States and China when the regulatory environment allows us to do so," United said in a statement.
In early January, there had been approximately 325 weekly scheduled flights between the two countries. That fell to only 20 per week by four Chinese carriers by mid-February, according to the DOT.
Earlier this year China said in an order that airlines couldn’t operate more flights than they had scheduled on March 12. However, by that time, U.S. carriers weren’t flying there, making it impossible for them to resume service, the DOT charged.
China’s order “effectively precludes US 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 DOT said in its order.