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American suspends Chicago-Beijing: partnerships and slots the solution

Analysis

The China-US market - like many markets from China - has been growing fast in volume and percentage in recent years. It is inevitable that there will be some contractions along the way, even if long term growth is the result of significant expansion.

United Airlines has ended service to two secondary Chinese cities, but a bigger change comes from American Airlines suspending Chicago-Beijing service until American can relocate to Beijing's new airport at Daxing in 2019 and grow its partnership with China Southern. Even with a relatively short time to wait (assuming American will still want to resume the service), American is not willing to stomach losses for the interim.

American's Chicago-Beijing service has been troubled since before it started; American struggled to secure slots. American now has better slots, but they preclude connections in Beijing. Its former partner Hainan was in a separate terminal and had limited inventory for onward connections.

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