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DOT May Reveal Who Gets China Routes at Meeting

October 09, 2000|Bloomberg News

This week's international transport meeting in Washington might present U.S. Transportation Secretary Rodney Slater with a forum to unveil his department's long-awaited decision on which U.S. air carrier will win routes to the fast-growing China market. United Parcel Service Inc. and FedEx Corp., two possible recipients of a route award, are sending top executives to the three-day meeting where more than 100 corporate and government leaders will speak. DOT is awarding 10 weekly round-trip flights that can begin by April of next year. The awards grant access to the world's most populous market, where airline passenger and cargo volume has more than tripled in the last five years, according to DOT statistics. UPS, AMR Corp.'s American Airlines and Delta Air Lines Inc. are vying to be the single new designee to serve China. The rights will be the first awarded by DOT since 1995. Under the terms of an aviation treaty worked out in April 1999, the winner could get all 10 flights, or DOT could choose to split them between the new designee and any of the three incumbents, including FedEx, Northwest Airlines Corp. and UAL Corp.'s United Airlines. UPS, whose CEO James Kelly speaks Tuesday, says it would expand shipping options and create competition for FedEx, the only package express operator that serves China today. FedEx CEO Fred Smith also is appearing at the symposium. The ruling will be issued as a "show-cause" order that gives companies that failed to win the rights 30 days to challenge the decision. DOT hasn't said when it will make the announcement.

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