Air China drops its plan to fly from San Jose

San Jose / Tribune News Service

Two weeks before Air China would start whisking Bay Area travellers from Mineta San Jose International Airport to Shanghai, the airline unexpectedly pulled its plans to launch new service here.
“We know at this time that Air China will not meet their proposed launch date of mid-June 2016,” said airport spokeswoman Rosemary Barnes. “They did not post the route to their website, so no tickets were sold, resulting in no inconvenience to air travelers.”
Air China officials could not be reached on Tuesday.
A schedule update from Air China last week removed the flights from San Jose to Shanghai Pudong International Airport, which were set to operate three times a week beginning June 16. The airline tentatively rescheduled the launch date to July before removing it from the system, according to Airline Route, a website that monitors air service changes and additions.
“It’s always disappointing when you lose the opportunity for new business,” said Vivienne Kouba, manager of Peak Travel Group, a San Jose-based agency that specializes in business corporate travel.
Kouba said Shanghai is a highly requested route among Silicon Valley business travelers, accounting for at least two in every five travel requests to China received by her agency.
“I believe that there would be more interest if there was a direct flight,” Kouba said. “People like the efficiency of nonstop service when they can get it. But I think Air China is probably just sizing things up and may try to launch later.”
A 2012 corporate survey found Shanghai was the second most requested destination by business executives. The first was London. British Airways launched its inaugural flight there in May.
Tokyo, Beijing and Frankfurt rounded out the top five — which are all now offered as direct flights from Mineta.
But airport officials sought to lure Air China to San Jose in an effort to grow passenger traffic and give South Bay travelers the convenience of flying from home — instead of making the trek to San Francisco.
The City Council in April approved an incentive package that included waiving landing fees for 18 months after Air China’s launch and a 50 percent discount for the next 12 months. The incentive was valued at $263,830.
The city also waived ticket counter fees for 18 months and then a 50 percent discount for the following year, valued at $329,472, and waived gate fees for the same time period, valued at $172,224. It also promised to provide marketing funds up to $600,000.
Barnes said those incentives can be rolled over to a future date.
Things appeared to be on track until the recent shake-up. Air China had received the green light from Chinese regulators in March to fly the new routes and then gained approval from the U.S. Department of Transportation in April — the final step before launching service. Air China leaders at the time said San Jose and Shanghai are “a perfect fit” because the two cities are centers of innovation.
“With its futuristic, soaring skyscrapers, Shanghai stands at the intersection of commerce and culture, technology and tradition,” Lillibeth Bishop, the airline’s senior director of marketing and public relations in North America, said at the time. “As home to the world’s largest high-tech companies and startups, Silicon Valley is Shanghai’s soul mate in the west.”
The cancellation of Shanghai service is a setback for an airport that has enjoyed steady growth in international business.
The city announced in November the addition of two daily Air Canada flights to Vancouver starting May 9. Also last year, Europe’s largest airline, Lufthansa, signed on to launch nonstop flights to Frankfurt, Germany, in July.
British Airways in May began new flights to London and Hainan Airlines last year launched its first nonstop flight to Beijing — another highly sought-after destination for Silicon Valley travelers and business leaders.
Landing new destinations at Mineta is good for consumers but it also aids the downtown airport in paying off a $1.3 billion modernization completed in 2010. And it furthers San Jose’s quest to step out of the shadows of the region’s other two major airports — San Francisco International and Oakland International — both of which surpass San Jose in passenger traffic.