WASHINGTON, US - US airlines say they cannot afford to fly new routes or maintain all flights to China and other countries that restrict access, but they still want to keep their rights to serve those destinations.
Carriers asked the Bush administration to preserve rights for two years, an unusually long time, while they scramble to reverse a financial nose dive blamed on expensive fuel prices.
'All US airlines are being forced to re-evaluate the flights they offer to avert financial catastrophe,' the carriers wrote in a joint application to defer service.
'In the present emergency circumstances, the resources of the carriers and the (government) should be focused on preserving the air transportation system and the viability of US carriers,' they said.
American Airlines, a unit of AMR Corp; Delta Air Lines; United Airlines, a unit of UAL Corp; US Airways Group; Continental Airlines; and Northwest Airlines Co expect a decision soon from the Transportation Department.
They suggest others could fly the unused routes temporarily, but insiders say that would not happen.
Privately held Spirit Airlines called the proposal an anti-competitive effort by bigger rivals to 'deep-freeze' valuable routes while slashing other service.
The government granted similar waivers twice this decade.
The first, only for four months, followed the 2001 hijack attacks on New York's World Trade Centre and the Pentagon that accelerated the industry's worst-ever downturn. The second, for one year, occurred at the start of the Iraq war.
The latest request, if granted, would represent one of the only government steps to assist airlines during the current downturn, which some analysts predict could be worse than the last one from 2002-06 when four big airlines went bankrupt.
A Transportation Department spokesman said the rights request was being evaluated. Airlines want a decision soon.
Andrew Steinberg, an attorney with Jones Day and a former senior US official on international aviation matters, said he did not know how regulators would react. He guessed they might be sympathetic since carriers appealed collectively.
Mr Steinberg noted that the industry is 'clearly in financial extremis' and said the government 'has to recognise' airlines cannot fulfill all of their overseas plans because fuel is so expensive.
'I think it's a shame because international service is where the profits have been and where the growth is,' he said.
US$61b fuel cost
US airlines are on track to pay more than US$61 billion for fuel this year, up US$20 billion over last year. Analysts expect heavy losses this quarter and possible bankruptcies in 2009.
Airlines did not specify where they want to halt or slow service but some have said individually that China routes are too costly. Waivers would be required to defer or suspend some or all service to China, Brazil, Mexico, Japan, and several other countries where access must be negotiated by governments.
Service rights are awarded usually after lobbying efforts by airlines. Start times are ordered by regulators.
Overseas routes are valued because of premium business traffic, especially to Asia. China routes have been coveted recently due to this year's Olympics.
Nonstop weekly US-China flights are up 16 per cent this year over last to more than 200, industry figures show.
'Air travel in Asia will continue to grow despite the current crisis,' said Steve Lott of the International Air Transport Association, a trade group.
Bigger airlines are slashing domestic capacity to focus more on global flying. But establishing routes or maintaining long-haul service to restricted cities requires large investments for infrastructure, aircraft, and crew training, as well as time and money to clear regulatory hurdles.
US Airways said higher fuel expenses would add US$50 million to the already planned US$40 million cost of its Philadelphia-Beijing service, which it now wants to put off.
US Airways was included in a 2007 US order that awarded new or additional China service to begin this year and next.
Continental, Northwest and Delta were also awarded routes. -- REUTERS