American Airlines Group Inc (NASDAQ:AAL) has refuted arguments by Delta Air Lines, Inc. (NYSE:DAL) that it cannot fulfill obligations as the new airline chosen to operate daily direct flights between Los Angeles and Beijing. Delta, which is based in Atlanta, had a week earlier said that American Airlines lacked the ability and the capacity to service the route. But in a rejoinder on November 29, American Airlines which is based in Texas, denied the claims.
Arguments won’t fly
” Those arguments, which lack support from the record and bear no relationship to the Department’s goal of maximizing public benefits, cannot support the reversal of the Department’s well-reasoned decision awarding Los Angeles-Beijing service to American,” said American Airlines in its filing.
American Airlines also faulted Delta for asking the US Department of Transportation to place more stringent conditions on it since this lacked factual support as well as precedence. The airline further called for the Department of Transportation to finalize awarding it the route as it was in the public interest.
While the dispute only started in November, the seeds were planted in March when both Delta and American applied to be granted the rights to operate daily direct flights between Los Angeles and Beijing. Previously there had not been any other US airline operating direct flights between these two cities. When the Department of Transportation awarded the route to American in early November, Delta objected saying that the consumer benefits it would offer exceeded those of American. Delta then went on to request that if the DOT’s final awardee remained American, Delta should be granted the backup authority. The backup authority would have allowed Delta to operate the route if and when American failed to fully meet and implement its commitments in a timely manner.
Air transport agreement
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At present, the total number of weekly frequencies that can be operated between the United States and the Chinese cities of Shanghai and Beijing are capped. United Continental Holdings Inc (NYSE:UAL), Hawaiian Holdings, Inc. (NASDAQ:HA), Delta Airlines and America Airlines are currently the four airlines from the United States that are allowed to operate the US-China routes as almost all the frequencies available to the United States are being held by these airlines.