American Air Cancels China Flight
Carrier's Inaugural Trip From Chicago to Beijing Halted Over Time-Slot

By MIKE ESTERL
AMR Corp.'s American Airlines canceled its planned inaugural flight between Chicago and Beijing on Monday, citing a disagreement with Chinese aviation authorities over take-off and landing times.

American Air says it turned down Chinese authorities' offer of daily landing and take-off slots of 2:20 a.m. and 4:20 a.m.

The impasse delays efforts by American, the second-largest U.S. carrier by traffic, to make bigger inroads in the fastest-growing economy in the world. It also could complicate planned "open-skies" talks between the U.S. and China as some U.S. businesses voice concern Chinese protectionism is growing.

American said Monday it halted the launch of daily nonstop service between Chicago O'Hare International Airport and Beijing Capital International Airport because it hadn't received "commercially viable" arrival and departure slots from Chinese aviation authorities.

The airline, based in Fort Worth, Texas, said it would postpone the launch of its Beijing route tentatively until May 4 as it tries to resolve the dispute. American has had daily flights between Chicago and Shanghai since 2006.

American had scheduled the new Boeing 777 flight to depart Chicago on Monday and arrive in Beijing at 1:55 p.m. Tuesday, before departing Beijing again later that afternoon. It said Chinese authorities instead gave American daily landing and take-off slots at 2:20 a.m. and 4:20 a.m.

In a statement Monday, the U.S. Department of Transportation said it was "very disappointed" China didn't grant more favorable slot times to American.

"New transportation links such as these help to strengthen commercial and cultural ties between our two nations," it added. "We sincerely hope that China will work with American Airlines to find a commercially feasible solution."

The Chinese embassy in Washington didn't return calls seeking comment.

The U.S. and China are gearing up for planned negotiations in Washington, starting June 8, that aim to further liberalize air traffic between the two countries. The last formal bilateral talks took place in 2007.

The dispute coincides with a survey released by the American Chamber of Commerce in China that indicates rising concern among U.S. businesses that Chinese protectionist policies were jeopardizing their prospects in the key market.

The Transportation Department has conveyed its concerns about American's unfavorable slots to the Chinese government "via appropriate diplomatic channels," said a department spokesman in Washington. It declined to speculate on how the matter might affect the open-skies talks.

UAL Corp.'s United Airlines has the biggest market share among U.S. carriers of nonstop flights between the U.S. and Beijing and Shanghai, according to OAG, an aviation research firm. Continental Airlines Inc. is No. 2 among U.S. carriers, based on OAG data.

Delta Air Lines Inc., the largest U.S. carrier, also has applied for slot times with Chinese authorities for its planned nonstop service between Seattle and Beijing starting June 4. A Delta spokesman said the airline remains "hopeful" of securing favorable landing and take-off times.

American reached an agreement earlier this year with Japan's largest airline, Japan Airlines Corp., to forge a wide-ranging joint venture aimed at expanding the Texas carrier's reach in fast-growing Asian markets.

But American Airlines failed in its efforts to recruit China Eastern Airlines Corp. to join its oneworld alliance of global carriers. Instead, China Eastern said earlier this month it would join Delta's competing SkyTeam alliance, leaving oneworld as the only global alliance without a full-fledged partner on the Chinese mainland.

China Southern Airlines Co., another large Chinese carrier, already is a member of SkyTeam. The other major mainland carrier, Air China Ltd., belongs to the Star Alliance, which includes United and Continental.

In a conference call last week, American Chief Executive Gerard Arpey said his carrier remained well positioned through oneworld partner Cathay Pacific Airways Ltd., which is based in Hong Kong.

Write to Mike Esterl at mike.esterl@wsj.com