United's Transpacific Struggles
#1
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United's Transpacific Struggles
United is having real difficulty filling flights on many of its routes across the Pacific. Any insight why certain routes are doing so badly? 57% load factor on San Francisco-Sydney in Q1? 59% EWR-HND? 69% SFO-HND? 54% IAD-HND???
#2
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… because Q1 is traditionally the slowest travel period of the year?
#4
Join Date: May 2017
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Pacific travel continues to recover not as fast as UA anticipated and grew for? They were still up 44% in revenue vs. Q1 2023, but have grown their ASMs outpacing that demand. The YoY growth would still suggest they're on the right track even if they overshot capacity, especially when compared to EU/domestic YoY growth.
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#7
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What's also interesting is that the flight cap on Chinese airlines' service to the U.S. is currently only a third of what it was pre-pandemic. If UA is struggling to fill aircraft now while not feeling the full competitive effect of mainland carriers in the transpacific market, what happens if/when the cap rises?
#8
Join Date: Feb 2022
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Did you just read the crankyflier article?
HND is a problem because the Japanese Yen is extremely weak so there is a lot less Japan originating traffic. Additionally, because it is slot controlled, there is no rationalization of capacity possible.
For the South Pacific, AA, DL, and UA all added significant amounts of capacity this past winter and all 3 have suffered. Delta previously planned for year round LAX-AKL and has already cut that to just winter seasonal. BNE has also been offering significant subsidies for international carriers and once that subsidy money dries up then you may see BNE routes getting cut as well.
HND is a problem because the Japanese Yen is extremely weak so there is a lot less Japan originating traffic. Additionally, because it is slot controlled, there is no rationalization of capacity possible.
For the South Pacific, AA, DL, and UA all added significant amounts of capacity this past winter and all 3 have suffered. Delta previously planned for year round LAX-AKL and has already cut that to just winter seasonal. BNE has also been offering significant subsidies for international carriers and once that subsidy money dries up then you may see BNE routes getting cut as well.
#9
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What's also interesting is that the flight cap on Chinese airlines' service to the U.S. is currently only a third of what it was pre-pandemic. If UA is struggling to fill aircraft now while not feeling the full competitive effect of mainland carriers in the transpacific market, what happens if/when the cap rises?
#10
Join Date: May 2017
Posts: 2,300
YoY
DL grew their pacific ASMs 36% for a 31% growth in passenger revenue and 2% decrease in yield.
AA grew their pacific ASMs 54% for a 47% growth in passenger revenue, and 6.5% decrease in yield, with a 4.7% decrease in load factor
UA grew their pacific ASMs 65.8% for a 44.3% growth in passenger revenue and 3.5% decrease in yield.
Of course the other piece of the story, UA grew their cargo revenue by 16.6% system wide (with multiple sources suggesting a large amount of their cargo activity is TPAC to justify these flights even with lower loads). DL decreased cargo revenue by 15%. AA increased cargo 14.7%.
#11
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I'm not thinking so much about travel beginning or ending in China as the competitive effect of Chinese airlines in terms of connecting traffic in East Asia and the larger region.
#12
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What's also interesting is that the flight cap on Chinese airlines' service to the U.S. is currently only a third of what it was pre-pandemic. If UA is struggling to fill aircraft now while not feeling the full competitive effect of mainland carriers in the transpacific market, what happens if/when the cap rises?
#13
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#15
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UA management has not raised transpacific being an issue and I am certain analysts and institutional investors will be all over it if it becomes an issue.
Things may change, but UA is still predicting meeting earning and operational projections for the rest of the year.
Others have pointed out in another thread that cargo is doing well on transpac routes.
As a consumer, it does not concern me or I worry for UA. I just fly.
Things may change, but UA is still predicting meeting earning and operational projections for the rest of the year.
Others have pointed out in another thread that cargo is doing well on transpac routes.
As a consumer, it does not concern me or I worry for UA. I just fly.
Last edited by UA_Flyer; May 5, 2024 at 8:21 pm