U.S. Department of Transportation Suspends All Passenger Flights to and from China

On Wednesday, June 3rd, the U.S. Department of Transportation (“DOT”), issued an order to suspend all scheduled air services of Chinese carriers to and from the United States in response to the “failure of the Government of the People’s Republic of China to permit U.S. carriers...to conduct scheduled passenger [flights] to and from China.” This order will become effective on Tuesday, June 16th, or otherwise immediately upon affirmative approval by President Trump and will serve the following air carriers:

• Air China;

• Beijing Capital Airlines;

• China Eastern Airlines;

• China Southern Airlines;

• Hainan Airlines;

• Sichuan Airlines;

• Xiamen Airlines; and

• All certificated U.S. carriers operating large aircraft; the Embassy of the People’s Republic of China.

The stated purpose of this order is to curtail what the DOT sees as failure of the Government of China to abide by the conditions stated by the U.S.-China Civil Air Transport Agreement (“the Agreement”), concluded on September 17, 1980 that establishes, among other things, rights for the carriers of both parties to provide air services between the two countries. U.S. carriers had originally planned to reinstate more frequent scheduled passenger flights to China in early June 2020, and submitted applications to the Civil Aviation Authority of China (“CAAC”) at the beginning of May 2020. The CAAC disapproved the U.S. carrier applications, despite being able to maintain Chinese air carriers’ scheduled passenger flights to and from the U.S., which raised objections from the Department that the Notice is inconsistent with the terms of the Agreement.

It is unclear at this point when this order will be revoked, but the DOT is prepared to revisit this matter should the CAAC adjust its policies to meet the terms of the Agreement. We will keep our clients updated on any developments.