United Airlines expands into more Chinese cities

Update:17 Nov 2014

United Airlines Inc, the largest carrier in the China-United States market, will expand into more Chinese cities and keep leading the market in the decades ahead, although many other carriers also covet the market, the airline's president said on Thursday.

"The Chinese market is very profitable and important for us," said Jeff Smisek, president and chief executive officer of United Airlines.

Both foreign and domestic carriers said they believe that the Sino-US market is promising, and they are investing more money on flights linking both countries.

United Airlines launched its Shanghai-Guam route on Tuesday. United, the first airlines to use the Boeing 787-9 in North America, will use the new plane on its Shanghai-Los Angeles route starting in March.

United may also raise the frequency of its tri-weekly Chengdu-San Francisco service, its first route to a second-tier city in China.

The carrier is also eyeing other Chinese cities, but its decisions will depend on market demand, Smisek said.

Stiffer competition in the market and Chinese airlines' improved service quality are pushing United to remain competitive, Smisek said.

"It is healthy for everyone, no matter whether it's the passengers or carriers," he said.

Statistics from the CAPA Center for Aviation, a global aviation market analysis firm, show that 39 services were added on cross-Pacific routes from 2009 to 2014, and most link the US and China.

Although US-based carriers retain the largest share in the market, Chinese carriers are moving ahead fast.

China Eastern Airlines Corp Ltd, which just received its first Boeing 777-300ER in September, announced a "Pacific Plan" to improve its brand and market shares in North America.

With the new fleet of Boeing 777-300ERs, China Eastern will add flights on current destinations and also explore new points in the future, said Tang Bing, deputy manager of the company.

Hainan Airlines Co Ltd has put its entire new fleet of Boeing 787s on North American routes as well.

"The air traffic market between the world's largest and second-largest economies is attractive for airlines," said Wang Yingming, executive chairman of HNA Aviation Group Co Ltd, parent company of Hainan Airlines.

Despite fierce competition, carriers are still optimistic about the China-US market.

Additional carriers definitely add pressure to the market, said Smisek, but different airlines have different target markets. For example, most of United's tickets are sold in the US, while Chinese carriers mainly focus on selling inside China, Smisek said.

Some carriers target the business market and some aim at the leisure market, he said.

"China remains a profitable market for us," Smisek said.

But he expressed concern about excess capacity on China-US routes.

If capacity grows faster than demand, fares will fall and damage the market, Smisek said.

 

SOURCE: China Daily

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