Chinese carrier scheduled passenger air services between the United States and China, effective as of June 16, 2020, or immediately upon affirmative approval by the President. On June 4, 2020, CAAC revised its March 26th Notice. The revisions would enable U.S. carriers to provide one weekly passenger flight each, starting June 8, 2020. The revisions to the Notice also include “incentive measures” that would allow a carrier to increase or, alternatively, require it to decrease weekly frequencies based on criteria relating to the health status of China-arriving passengers on its flights. In addition, carriers seeking to serve a particular Chinese port of entry must secure permission from provincial authorities, in addition to the standard approval from CAAC.
Decision
We find that the CAAC’s revised Notice continues to preclude U.S. carriers from fully exercising their rights under the Agreement. Moreover, it continues to impede the ability of U.S. carriers to “achieve equality of opportunity,” considering that the CAAC will permit Chinese carriers, in the aggregate, to operate as many as four weekly passenger flights to the United States. As a general matter, we are troubled by China’s continued unilateral dictation of the terms of the U.S.-China scheduled passenger air transportation market without respect for the rights of U.S. carriers under the Agreement.
Therefore, based on the facts before us, we continue to find that the Government of China has, over the objections of the U.S. Government, impaired the operating rights of U.S. carriers and denied U.S. air carriers the fair and equal opportunity to exercise their operating rights under the Agreement, and thus has acted contrary to the Government of China’s obligations under Annex I, Section I; Annex V; and Article 12(2) of the Agreement.
We find that these circumstances continue to warrant the Department’s action to restore a competitive balance and fair and equal opportunity among U.S. and Chinese air carriers in the scheduled passenger service marketplace.
We therefore conclude that the public interest now requires the modification, effective immediately, of Order 2020-6-1 to permit the Chinese carriers currently providing scheduled passenger air services between the United States and China, in accordance with the schedules that were filed pursuant to Order 2020-5-4, to operate, in the aggregate, a total of two weekly round-trip scheduled passenger flights to and from the United States. CAAC may communicate to the Department by letter which carrier(s) it selects to operate each or both of these two services. This selection may be modified with 30 days’ written notice to the Department in advance of the proposed operations.
As the Department stated in Order 2020-6-1, the Department’s overriding goal is not the perpetuation of this situation, but rather an improved environment wherein the carriers of both parties will be able to exercise fully their bilateral rights. The most recent CAAC action has not created that environment. However, should the CAAC adjust its policies to bring about the necessary improved situation for U.S. carriers, the Department is fully prepared to once again revisit the action it announced in Order 2020-6-1 and the present order.
