United Applies for Rights to Fly to Chengdu

United Airlines last week applied to the US Department of Transportation (DOT) for authority to begin a non-stop service linking the airline’s San Francisco hub with Chengdu, China, the fourth-largest Chinese city.  The US major intends to utilise its new Boeing 787 Dreamliners on a proposed three times weekly link effective from June 9, 2014.  If approved, the city will be the ninth destination the carrier serves in the Asia/Pacific region nonstop from San Francisco.

In its formal application to the US DOT United says the award of authority to serve the route will provide substantial benefits to anyone flying the route with flying times of approximately 14 hours, 15 minutes westbound and 13 hours, 50 minutes eastbound shaving nearly four hours off the typical travel time between the two cities. 

United’s proposed new service will be the first ever scheduled air link between the US mainland and interior points in China with the San Francisco – Chengdu city pair exactly the type of direct market that US and Chinese Governments envisioned when they previously made amendments to the bilateral air services agreement between the two countries to promote connectivity.  Due to this, United says its plans are “clearly in the public interest”.

According to United, the Chengdu service will further boost its San Francisco hub and will “maximise connecting service options for consumers, facilitate the development of additional trade and tourism between San Francisco and China” and provide similar benefits throughout its San Francisco hub network.

In a formal letter supporting its application for an Exemption and Certificate of Public Service and Necessity to the DOT, United says it has polled other US carriers on its network plan and received “non-objections from all carriers served”.  It says that due to this response it requests “expedited treatment” of the application so it can secure foreign authority and make final plans for the formal marketing launch and seat sales on the route.

According to MIDT data, an estimated 84,000 bi-directional O&D passengers travelled between Chengdu and the US in 2012 with just under 15,000 passengers flying between the Chinese city, the home of the Panda, and San Francisco.  The majority of these passengers are currently connecting on the flights of Cathay Pacific and its sister carrier Dragonair via Hong Kong or flying with Air China via the Chinese capital, Beijing.

United already offers direct flights from San Francisco to both Beijing and Shanghai, while Air China links the US west coast city with Beijing and China Eastern Airlines has flights from Shanghai.  The US major currently serves eight routes between the US and China with additional flights to China’s two largest cities from Chicago, Los Angeles, Newark and Washington.

In our analysis below we look at bi-directional O&D passenger demand between China and its territories and the US by airline last year.  During the 12 month period an estimated 6.66 million passengers flew between these two markets with United holding the largest proportion of the traffic with a 30.8 per cent share.

AIR PASSENGER DEAMND BETWEEN CHINA AND ITS TERRITORIES AND THE US (bi-directional O&D passengers; 2012)

Rank

Airline

Estimated O&D Passengers

% Share

1

United Airlines (UA)

2,051,817

30.8 %

2

Cathay Pacific Airways (CX)

1,230,388

18.5 %

3

Air China (CA)

681,882

10.2 %

4

Delta Air Lines (DL)

594,067

8.9 %

5

American Airlines (AA)

467,462

7.0 %

6

China Eastern Airlines (MU)

434,821

6.5 %

7

Korean Air (KE)

257,042

3.9 %

8

China Southern Airlines (CZ)

184,959

2.8 %

9

Sichuan Airlines (3U)

159,367

2.4 %

10

Asiana Airlines (OZ)

110,129

1.7 %