US airlines allowed to resume limited flights to China

US airlines will now be allowed to resume limited flights to China. On the other hand, the Chinese government welcomes more flights by US carriers.

American airlines can now follow a limited schedule of flights to China after an agreement between the two countries eased their travel standoff.

United Airlines (UAL), American Airlines (AAL), and Delta Air Lines (DAL), the three largest airlines in the US, had flights to China before the coronavirus pandemic. However, the demand shrank when the coronavirus outbreak happened. The airlines eventually postponed their flights in February when the US government implemented travel restrictions.

Meanwhile, four Chinese carriers provided services throughout the pandemic at a reduced schedule. They are allowed one weekly flight each between the US and China.

However, the US Department of Transportation reported that Chinese government regulations blocked Delta and United when the US airlines asked for the resumption of flights on June 1.

Aviation agreement

With this, the Transportation Department found that Beijing was violating a bilateral aviation agreement. According to the agency, it would not allow Chinese flights into the US starting June 16.

US authorities later withdrew the threat after the Civil Aviation Administration of China (CAAC) announced that a limited number of flights from US carriers is welcome to their country.

On Monday, the Transportation Department said it was authorizing Chinese airlines to do four round-trip flights every week between the United States and China. The agency noted that its new policy was based on China's decision to do the same for US airlines.

"We welcome this action by the Chinese government, as an important first step to fully restore air travel," the agency said in a statement.

Meanwhile, a spokesperson for United Airlines revealed it aimed to have more flights to China "in the weeks ahead." A spokesperson for American Airlines announced that its flights to Beijing and Shanghai will resume in October.

The US Department of Transportation said on Monday that it would "continue to press for the full restoration of passenger air travel between the United States and China, in part to allow for the repatriation of Chinese students who have been unable to fly home due to the shortage of flights."

"As the Chinese government allows more flights by U.S. carriers, we will reciprocate," the agency said.

Financial woes

The coronavirus pandemic has deeply damaged the airline industry financially. American Airlines experienced a 13% decline in March to $16.04. This has been the latest low since its 2013 merger with US Airways. American Airlines’ shares have been down more than 22% over the past week.

The lower demand for travel has been shrinking airline shares. Airlines have been waiving change fees for new bookings and lowering fares to invite more people to travel. This move pushed the decline in airline stocks.

According to the International Air Transport Association, airlines worldwide could lose up to $113 billion in revenue in 2020, the most since the financial crisis, should COVID-19 continues to spread.

Flight attendants at JetBlue Airways were reportedly offered unpaid leave in April as the company pursues reducing capacity by 5%. Those who take the voluntary unpaid leave will get to keep their health benefits and travel privileges. They are also limiting its hiring and canceling events based on a company memo.

“We are closely monitoring booking trends to assess whether additional capacity reductions will be required,” wrote Joanna Geraghty, JetBlue’s president.