Hawaiian Airlines
will not fly to China

The carrier loses out to competitors
for coveted slots to fly between the
U.S. and the growing Asian nation

Hawaiian Airlines, hoping to make inroads into serving China's growing economy with U.S. flights, had its application for San Diego-Honolulu-Shanghai passenger service rejected yesterday by the U.S. Department of Transportation.

The carrier lost out to Continental Airlines Inc. and AMR Corp.'s American Airlines. Those two airlines received permission to begin passenger flights to China this year and in 2006, respectively. Hawaiian was seeking to begin service next year. The awards are tentative until a comment period is complete.

"We're disappointed in today's news, but China remains an aspiration for Hawaiian and we will continue to pursue China service as these slots become available," Hawaiian spokesman Keoni Wagner said yesterday.

The Transportation Department said in its decision that Hawaiian Airlines' proposed four-flights-a-week service, the first nonstop flights between Honolulu and Shanghai, "would benefit a relatively small number of travelers, would not make as effective use of the available frequencies as other applicants, and would rely heavily on China-originating passengers to support its service."

The department noted that Hawaiian forecast 57,982 passengers for the first year of operations -- less than half the number of passengers forecast by American, Continental and Delta Air Lines Inc. on their proposed services.

American plans to fly from Chicago to Shanghai while Continental seeks to go from Newark, N.J., to Beijing. Both plan to run seven weekly round-trip flights.

Fewer U.S. citizen travelers would benefit from Hawaiian's proposed service, which is focused mainly on developing the Chinese tourist market, the department said.

"While we are supportive of efforts to develop this market, in these circumstances, the record shows that the selection of American would provide significantly greater benefits than would the selection of Hawaiian because American would provide improved service and enhanced competition to many more U.S. passengers and communities than Hawaiian," the department said.

The department said the most serious flights deficiency is the lack of U.S. carrier nonstop service to China from New York. The selection of Continental fills that need, the department said.

The United States is adding flights to China under a 25-year-old aviation agreement that the two nations updated in July. Altogether, 13 U.S. carriers competed for 26 new flights. Other carriers that failed to win flights were Delta, UAL Corp.'s United Airlines and North American Airlines.

Delta is the only one of the five largest U.S. passenger carriers without China flights. United and Northwest Airlines Corp. already fly between the two countries.

The 26 new flights will increase the number of weekly U.S.-China flights to 133, with another 116 to be added by 2010 under the U.S.-China agreement, which is intended to ease seat shortages. The next China routes will become available in 2007.