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chrisnh
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Hainan in the U.S.

Fri Feb 17, 2017 12:15 am

The numbers for Hainan's two Boston flights are and have been a good bit over 90% so I was wondering if they are enjoying the same success at their other U.S. destinations. As one of the 'early adopters' of the 787, they seem to have had a good strategy. In fact, Hainan had pegged Boston many years before the 787 even became available and the thought was the A330 might have been used. But, they waited for their 787s and now they are doing very well.
 
winginit
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Re: Hainan in the U.S.

Fri Feb 17, 2017 12:27 am

Without knowing the yields it's impossible to gauge whether or not the operations are profitable; and if you look at their average fares in the market for snapshot dates they're at the bottom of the barrel. Load factor is only a small piece of the equation so I'd hold off on categorizing their U.S. operations as any sort of success.
 
OslPhlWasChi
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Re: Hainan in the U.S.

Fri Feb 17, 2017 1:34 am

I would be curious about their yields in BOS. It does make you wonder if Hainan's business model could be replicated in some other secondary markets wit little or no service like PHL, BWI, PDX, SAN, DEN, AUS, etc.
 
globalcabotage
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Re: Hainan in the U.S.

Fri Feb 17, 2017 1:54 am

If it involves BOS, DTW, or MIA on this forum, any route that can support 4 O&D per day is gold as those few people are all concierge platinum that pay $10 per mile flown.
 
B752OS
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Re: Hainan in the U.S.

Fri Feb 17, 2017 2:31 am

Is it normal for fares to be very low to Asia? I just did a spot check on UA SFO-PEK-SFO in march and the fare united's website is charging is $532.66 USD for a round trip.
 
FSDan
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Re: Hainan in the U.S.

Fri Feb 17, 2017 3:19 am

The one I'm interested in is LAX-CSX...
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log0008
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Re: Hainan in the U.S.

Fri Feb 17, 2017 3:35 am

People have to remember that China and Chinese airlines are completely different to 'Western' airlines, many routes re heavily subsidized by local governments ranging from waving landing and handling charges to almost covering all expenses during the first year/s of operation. These means that new routes are often very cheap and they push for the 90% load factor range. The whole idea is that slowly over coming years they can increase those fares until they can make a profit on there own - Chinese travelers are more likely to travel to the same destination year after year.
 
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KLMatSJC
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Re: Hainan in the U.S.

Fri Feb 17, 2017 3:35 am

From what I have heard, SJC's flights are constantly going out full. They are running a 787-9 on their PEK flight this summer.
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Pbb2173
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Re: Hainan in the U.S.

Fri Feb 17, 2017 3:42 am

globalcabotage wrote:
If it involves BOS, DTW, or MIA on this forum, any route that can support 4 O&D per day is gold as those few people are all concierge platinum that pay $10 per mile flown.


I have nothing to do with any of those cities, but I have to ask. Do you ever get tired of trolling threads and saying this same crap? What is your agenda? Are you insecure?
 
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hongkongflyer
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Re: Hainan in the U.S.

Fri Feb 17, 2017 4:22 am

winginit wrote:
Without knowing the yields it's impossible to gauge whether or not the operations are profitable; and if you look at their average fares in the market for snapshot dates they're at the bottom of the barrel. Load factor is only a small piece of the equation so I'd hold off on categorizing their U.S. operations as any sort of success.


Chinese airlines must have the lowest cost structure when compared to other airlines competiting in Asia-USA markets.
Together with the fuel saving from 787 compared to 332 they periously used on the route,
there must be rooms to charge a lower price then others.
 
wedgetail737
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Re: Hainan in the U.S.

Fri Feb 17, 2017 4:37 am

It appears HU's Seattle flights to PEK and PVG have been doing well since the aircraft sizes have increased...787-9 to PVG and A330-300 to PEK.
 
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VS4ever
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Re: Hainan in the U.S.

Fri Feb 17, 2017 5:01 am

Here are the rough YTD numbers (Jan-Aug 16) from T-100, so again, it's only as good as reported by the airline and shown by reporting tool. So I can't make any claims to their absolute accuracy.
(numbers go - flights, seats, pax and capacity %, this is combined direction)

BOS-PEK - 404, 91,452, 80,999 88.57%
BOS-PVG - 208, 44,304, 38,800, 87.58%
LAX-CSX - 128, 27,288, 22,044 80.78%
ORD-PEK, 332, 70,716, 62,339 88.15%
SEA-PEK, 388, 102,222, 90,682 88.71%
SEA-PVG 224, 46,702, 40,431 86.57%
SJC-PEK 290, 61,770, 51,845 83.93%
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aemoreira1981
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Re: Hainan in the U.S.

Fri Feb 17, 2017 5:25 am

Hainan is applying for Chengdu to LAX and Chengdu to New York-JFK, likely on 787-9 aircraft. One has to wonder if anyone will consider Hangzhou to JFK (JFK already sees nonstop service from Guangzhou - CZ, Hong Kong - CX, Fuzhou - MF, Shanghai - MU, and Beijing - CA. Fuzhou is served by a 787-9, and one Beijing frequency is served by a 747-8---everything else is a 77W.
 
ahj2000
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Re: Hainan in the U.S.

Fri Feb 17, 2017 2:51 pm

OslPhlWasChi wrote:
I would be curious about their yields in BOS. It does make you wonder if Hainan's business model could be replicated in some other secondary markets wit little or no service like PHL, BWI, PDX, SAN, DEN, AUS, etc.

Absolutely. DEN, PDX, SAN, and either DFW or AUS would work well for them IMO. I wouldn't be surprised if they started increasing frequency instead of just aircraft size as well.
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izbtmnhd
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Re: Hainan in the U.S.

Fri Feb 17, 2017 4:03 pm

Mods Delete this post
Last edited by izbtmnhd on Fri Feb 17, 2017 4:12 pm, edited 2 times in total.
 
FSDan
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Re: Hainan in the U.S.

Fri Feb 17, 2017 4:06 pm

KLMatSJC wrote:
From what I have heard, SJC's flights are constantly going out full. They are running a 787-9 on their PEK flight this summer.


All HU's 787 flights to the U.S. will be on 787-9s this summer. The only exception is SEA-PEK on the A330-300.
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izbtmnhd
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Re: Hainan in the U.S.

Fri Feb 17, 2017 4:09 pm

izbtmnhd wrote:
aemoreira1981 wrote:
Hainan is applying for Chengdu to LAX and Chengdu to New York-JFK, likely on 787-9 aircraft. One has to wonder if anyone will consider Hangzhou to JFK (JFK already sees nonstop service from Guangzhou - CZ, Hong Kong - CX, Fuzhou - MF, Shanghai - MU, and Beijing - CA. Fuzhou is served by a 787-9, and one Beijing frequency is served by a 747-8---everything else is a 77W.


I agree with your thoughts. I think the odds of Hangzhou-JFK has as good a chance than any imagined service to BWI or AUS. Hainan wants to expand internationally catering to the needs of it's base customers in China, not so much add tons of service to multiple secondary US destinations. The proof is that they're still not really serving any US secondary markets even after a fair amount of expansion.
 
330west
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Re: Hainan in the U.S.

Fri Feb 17, 2017 4:36 pm

OslPhlWasChi wrote:
I would be curious about their yields in BOS. It does make you wonder if Hainan's business model could be replicated in some other secondary markets wit little or no service like PHL, BWI, PDX, SAN, DEN, AUS, etc.


I'm not sure I'd put Boston in the same 'secondary market' category with those cities. Most of them can barely sustain four or five flights beyond the continent(if that). Boston has at least twenty.
 
OslPhlWasChi
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Re: Hainan in the U.S.

Fri Feb 17, 2017 5:30 pm

330west wrote:
OslPhlWasChi wrote:
I would be curious about their yields in BOS. It does make you wonder if Hainan's business model could be replicated in some other secondary markets wit little or no service like PHL, BWI, PDX, SAN, DEN, AUS, etc.


I'm not sure I'd put Boston in the same 'secondary market' category with those cities. Most of them can barely sustain four or five flights beyond the continent(if that). Boston has at least twenty.


Fair for sure. Out of bias, but also market size, PHL is the one I am most curious about.
JAL to NRT is the most likely Asian service I think for PHL - and that may be at best a 50% chance in the next 3 years - but after that, perhaps a similar approach by Hainan with PEK 4x and PVG 3x.
 
330west
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Re: Hainan in the U.S.

Fri Feb 17, 2017 6:02 pm

It's quite small. These numbers are from 2011(before Boston had nonstop flights to Asia) so even if they've double or tripled, the case probably isn't there for anything other than maybe JAL, since it is a One World hub.

BOS PHL
Tokyo 50389 11099
Hong Kong 46245 6324
Beijing 48438 9220
Shanghai 52796 12972
Seoul 56199 13958
 
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adamblang
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Re: Hainan in the U.S.

Fri Feb 17, 2017 6:58 pm

B752OS wrote:
Is it normal for fares to be very low to Asia? I just did a spot check on UA SFO-PEK-SFO in march and the fare united's website is charging is $532.66 USD for a round trip.

In addition to log0008's comments, Asia-exposded airlines like United have warned that massive increases in ASMs between Asia and North America are exerting downward pressure on their yields. Right now all the capacity coming on line is moderately glutting the market.
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OslPhlWasChi
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Re: Hainan in the U.S.

Fri Feb 17, 2017 7:02 pm

330west wrote:
It's quite small. These numbers are from 2011(before Boston had nonstop flights to Asia) so even if they've double or tripled, the case probably isn't there for anything other than maybe JAL, since it is a One World hub.

BOS PHL
Tokyo 50389 11099
Hong Kong 46245 6324
Beijing 48438 9220
Shanghai 52796 12972
Seoul 56199 13958


Thanks! (I need to get more familiar with T100 data.)
Given the market today, you are probably right that JAL is it. We will see with time if the market increases.
 
330west
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Re: Hainan in the U.S.

Fri Feb 17, 2017 7:15 pm

This is actually from a study conducted by the Brookings Institute in 2012. It's obviously outdated but it's still probably recent enough that the numbers are good for general comparisons like this.
 
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adamh8297
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Re: Hainan in the U.S.

Fri Feb 17, 2017 7:35 pm

330west wrote:
This is actually from a study conducted by the Brookings Institute in 2012. It's obviously outdated but it's still probably recent enough that the numbers are good for general comparisons like this.


Also 2011 was the tsunami year and PHL leaks to EWR.
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VS4ever
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Re: Hainan in the U.S.

Fri Feb 17, 2017 7:38 pm

OslPhlWasChi wrote:
330west wrote:
It's quite small. These numbers are from 2011(before Boston had nonstop flights to Asia) so even if they've double or tripled, the case probably isn't there for anything other than maybe JAL, since it is a One World hub.

BOS PHL
Tokyo 50389 11099
Hong Kong 46245 6324
Beijing 48438 9220
Shanghai 52796 12972
Seoul 56199 13958


Thanks! (I need to get more familiar with T100 data.)
Given the market today, you are probably right that JAL is it. We will see with time if the market increases.


330west is right those aren't the T-100 numbers. If you look at my previous post you will see the latest HU numbers by route for Jan-Aug 16 that did come from T-100
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OslPhlWasChi
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Re: Hainan in the U.S.

Fri Feb 17, 2017 7:40 pm

Thanks all!

No need to carry the conversation on (unless others want to) but adamh brings up the point of leak to EWR. I have no idea how one could try to quantify if that exists and how much of it does - but another interesting point indeed.
 
aviationjunky
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Re: Hainan in the U.S.

Fri Feb 17, 2017 7:44 pm

Does anyone know how their LAS-PEK is doing?
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winginit
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Re: Hainan in the U.S.

Fri Feb 17, 2017 7:53 pm

hongkongflyer wrote:
winginit wrote:
Without knowing the yields it's impossible to gauge whether or not the operations are profitable; and if you look at their average fares in the market for snapshot dates they're at the bottom of the barrel. Load factor is only a small piece of the equation so I'd hold off on categorizing their U.S. operations as any sort of success.


Chinese airlines must have the lowest cost structure when compared to other airlines competiting in Asia-USA markets.
Together with the fuel saving from 787 compared to 332 they periously used on the route,
there must be rooms to charge a lower price then others.


Said differently, they're government owned (even Hainan is 49%) and subsidized so they don't care about turning a profit because Hainan is a glorified marketing arm of the broader HNA group.
 
Flighty
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Re: Hainan in the U.S.

Fri Feb 17, 2017 9:25 pm

adamblang wrote:
B752OS wrote:
Is it normal for fares to be very low to Asia? I just did a spot check on UA SFO-PEK-SFO in march and the fare united's website is charging is $532.66 USD for a round trip.

In addition to log0008's comments, Asia-exposded airlines like United have warned that massive increases in ASMs between Asia and North America are exerting downward pressure on their yields. Right now all the capacity coming on line is moderately glutting the market.



I would argue that USA - China is one of the most glutted markets in human history, at least in absolute terms. At $532 including tax, airlines aren't just losing a small amount of money on the service. They are losing a large amount of money.
 
DaufuskieGuy
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Re: Hainan in the U.S.

Fri Feb 17, 2017 9:56 pm

Flighty wrote:
adamblang wrote:
B752OS wrote:
Is it normal for fares to be very low to Asia? I just did a spot check on UA SFO-PEK-SFO in march and the fare united's website is charging is $532.66 USD for a round trip.

In addition to log0008's comments, Asia-exposded airlines like United have warned that massive increases in ASMs between Asia and North America are exerting downward pressure on their yields. Right now all the capacity coming on line is moderately glutting the market.



I would argue that USA - China is one of the most glutted markets in human history, at least in absolute terms. At $532 including tax, airlines aren't just losing a small amount of money on the service. They are losing a large amount of money.


but we don't know how many seats are for sale at that price, could it not be just a handful? Need to know average total revenue per flight versus costs to determine profitability.
 
NYC2SFO
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Re: Hainan in the U.S.

Sat Feb 18, 2017 6:00 pm

With SJC service apparently doing well, any thoughts/chance of SFO be added to the route network? Would that dilute SJC pax?
 
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LAXintl
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Re: Hainan in the U.S.

Sat Feb 18, 2017 6:17 pm

aemoreira1981 wrote:
Hainan is applying for Chengdu to LAX

Starts March 15th.

Also Chongqing-LAX starts March 21st.

winginit wrote:
Said differently, they're government owned (even Hainan is 49%) and subsidized so they don't care about turning a profit because Hainan is a glorified marketing arm of the broader HNA group.


But they do turn a profit, quite handsome one at that. They have outside investors including folks like George Soros who certainly wants a return.

The airlines are true businesses not some trophy investments.
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