U.S. proposes awarding new direct China flight to American Airlines

By David Shepardson

WASHINGTON (Reuters) - The U.S. Transportation Department on Monday said it was proposing to award American Airlines Group Inc (NASDAQ: AAL) a new daily scheduled nonstop flight between Los Angeles and Beijing.

The Obama administration has been considering rival applications from American and Delta Air Lines Inc (NYSE: DAL) to operate the flight.

Delta already flies a daily nonstop route to China from Seattle, while United Continental Holdings Inc (NYSE: UAL) has service from San Francisco.

Delta said in a Transportation Department filing that it has a 9 percent share of the seats to Beijing - including codeshare flights - compared with 15 percent for American and United with 75 percent.

American argued in a filing that Delta already holds a significant advantage over American in U.S.-Chinese flight competition, with Delta and alliance partners, China Eastern and China Southern, serving nearly twice as much U.S.-China traffic as American and Hainan Airlines combined.

Those opposed to awarding American the flight have until Nov. 22 to file comments before the Transportation Department makes a final decision.

(Reporting by David Shepardson; Editing by Alan Crosby)

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