United ending Xian

LAXintl · Fri Dec 08, 2017 11:24 pm

Announced today, Xian service will not be back for summer 2018. Will removed from sked and GDS sales over the weekend.

The company says route did not mature with forecast corporate traffic and its overall performance was not meeting expectations.

=

Maybe secondary China was not the panacea UA once though. With Hangzhou previously cut, this leaves UA only with Chengdu as an interior market.

Irehdna · Fri Dec 08, 2017 11:31 pm

Interesting development. Could some of this be due to the rise of Chinese carriers which plan to serve USA nonstop from inland China?

NichCage · Fri Dec 08, 2017 11:35 pm

Hangzhou did even worse when UA launched a second daily SFO-PVG.

LAXdude1023 · Fri Dec 08, 2017 11:39 pm

I dont know why its a surprise. XIY isnt really a big business destination.

LAXintl · Fri Dec 08, 2017 11:40 pm

I see it more as a refutation of previous network managements long term China play strategy.
New team wants faster/safer results and not carry loss making routes too long as they wait for the eggs to hatch one day.

TheLion · Sat Dec 09, 2017 12:07 am

A weak strategy, ignoring the emerging market opportunities of tomorrow for short-sighted maximum profitability today. BA are slowly but surely driving themselves into a hole doing the same. A one trick pony cannot dance the tango when it has only learned to line dance.

BlatantEcho · Sat Dec 09, 2017 12:31 am

^^^^

That reply is not only non-sensical, but also illogical.

If you can’t make money on a route over 2 years, it goes away.

I bet performance has more to do with low fares driven by Chinese airlines than the economics of Xian corporate travel itself.

Cutting HGH sucked, it’s now two stops for me to get there. But when fares are $700 R/T to china right now... the non core cities will suffer.

RWA380 · Sat Dec 09, 2017 12:47 am

The prices offered by CA are hard to make a profit on, I was surprised UA was being so ambitious when China fares have been historically low in the last several years. I honestly think the premium cabin demand is what drives, or doesn't, a route like this.

drerx7 · Sat Dec 09, 2017 12:49 am

Wasn't it subsidized too? Did subsidies end?

UALFAson · Sat Dec 09, 2017 1:00 am

TheLion wrote:
A weak strategy, ignoring the emerging market opportunities of tomorrow for short-sighted maximum profitability today. BA are slowly but surely driving themselves into a hole doing the same. A one trick pony cannot dance the tango when it has only learned to line dance.

But if and when demand/average fares pic up "tomorrow" as you put it, why can't UA just resume service then? They already have strong brand recognition in China and are recognized here in the States as the leading U.S. carrier to Asia. Why do they have to lose money in the interim?

USAirALB · Sat Dec 09, 2017 1:03 am

I feel like UA could make SFO-CAN work.

jhsusman · Sat Dec 09, 2017 1:12 am

Frees up a 787-8 for the new Denver - London route. Not sure how many days a week that UA was offering the X’ian flights. . .

DfwRevolution · Sat Dec 09, 2017 1:22 am

TheLion wrote:
A weak strategy, ignoring the emerging market opportunities of tomorrow for short-sighted maximum profitability today. BA are slowly but surely driving themselves into a hole doing the same. A one trick pony cannot dance the tango when it has only learned to line dance.

Maximizing profits in the short-run also maximizes profits in the long-run. That's basic math. See: discounted cash flows.

Cubsrule · Sat Dec 09, 2017 1:27 am

DfwRevolution wrote:
TheLion wrote:
A weak strategy, ignoring the emerging market opportunities of tomorrow for short-sighted maximum profitability today. BA are slowly but surely driving themselves into a hole doing the same. A one trick pony cannot dance the tango when it has only learned to line dance.

Maximizing profits in the short-run also maximizes profits in the long-run. That's basic math. See: discounted cash flows.

Not necessarily true. If I forgo $1,000,000 next year to make $1,000 this year I come out behind even with discounting. It depends on the magnitude of the profits.

downdata · Sat Dec 09, 2017 1:41 am

DfwRevolution wrote:
TheLion wrote:
A weak strategy, ignoring the emerging market opportunities of tomorrow for short-sighted maximum profitability today. BA are slowly but surely driving themselves into a hole doing the same. A one trick pony cannot dance the tango when it has only learned to line dance.

Maximizing profits in the short-run also maximizes profits in the long-run. That's basic math. See: discounted cash flows.

Ignores first mover adavantage and other intangible values. Remember kodak? They sure maximised short run cash flows... except the business wasnt a going concern without investing into the future.

On the topic of dcf, if you have done enough of it, you will know most of the values lie in the terminal years and not the visible 5, 10 or even 20 years for long lived assets / companies.

DfwRevolution · Sat Dec 09, 2017 2:45 am

Cubsrule wrote:
DfwRevolution wrote:
TheLion wrote:
A weak strategy, ignoring the emerging market opportunities of tomorrow for short-sighted maximum profitability today. BA are slowly but surely driving themselves into a hole doing the same. A one trick pony cannot dance the tango when it has only learned to line dance.

Maximizing profits in the short-run also maximizes profits in the long-run. That's basic math. See: discounted cash flows.

Not necessarily true. If I forgo $1,000,000 next year to make $1,000 this year I come out behind even with discounting. It depends on the magnitude of the profits.

The purpose of discounting cash flows is to arrive at a net present value. There's pretty much no discount rate that would lead to $1MM next year being worth less NPV than $1M this year. But you're misrepresenting my point. Taking $1MM next year is maximizing present value.

Make no mistake: when people say to think "long-term" they are universally making excuses for poor performance today and to procrastinate doing something impact now. Always.

downdata wrote:
DfwRevolution wrote:
TheLion wrote:
A weak strategy, ignoring the emerging market opportunities of tomorrow for short-sighted maximum profitability today. BA are slowly but surely driving themselves into a hole doing the same. A one trick pony cannot dance the tango when it has only learned to line dance.

Maximizing profits in the short-run also maximizes profits in the long-run. That's basic math. See: discounted cash flows.

Ignores first mover adavantage and other intangible values.

"Intangible value" is totally subjective. You can make "intangibles" whatever you want to justify a decision.There are also countless examples in air transportation of a player arriving late and displacing long entrenched incumbents.

downdata wrote:
Remember kodak? They sure maximised short run cash flows... except the business wasnt a going concern without investing into the future.

I suggest reading the HBS case study of Kodak. Their problem was not a failure to invest in the future. Kodak invested in tons of emerging technology. They couldn't commercialize it. Sounds awfully familiar to UA's China strategy.

B737900ER · Sat Dec 09, 2017 2:53 am

XIY was bound to fail. It’s a tourist destination first, business second. The real money is in CKG.

MaverickM11 · Sat Dec 09, 2017 3:16 am

Secondary China gives new meaning to low yield, and with endless new entrants adding nonsensical capacity, there is no upward pressure on yields any time soon. It’s like secondary Brazil, if some third rate Brazilian carrier was adding RECTPA on a 330 every other month.

AwysBSB · Sat Dec 09, 2017 3:40 am

XIY-US is not a market for a non-Chinese carrier yet: at this moment, MU or HU can be very successful on the route UA is leaving.

BestWestern · Sat Dec 09, 2017 4:41 am

I’ve always said that there is no gold at the end of the Chinese regional city rainbow.

With vertically integrated Chinese airlines having lower costs and infinite subsidies, western carriers just can’t compete. Yet airlines for America don’t see the need to complain about subsidies.

Until the subsidies stop, red ink will flow.

LAXintl · Sat Dec 09, 2017 4:49 am

United statement:

https://pbs.twimg.com/media/DQj61ORVoAEja48.jpg

LAX772LR · Sat Dec 09, 2017 4:50 am

BlatantEcho wrote:
But when fares are $700 R/T to china right now

...on a high fare day.

Some days, secondary China-LAX is selling for just over $400, roundtrip, all in.

And not just on secondary carriers either; I've routinely seen sub-$500 fares on CA/MU as well.

BestWestern · Sat Dec 09, 2017 5:20 am

With Chinese tourism to the US in decline when capacity is rising, expect further low fares and more route cuts.

The only ‘light’ at the end of the tunnel is if HNA blinks first and slashes capacity.

timpdx · Sat Dec 09, 2017 6:00 am

LAX772LR wrote:
BlatantEcho wrote:
But when fares are $700 R/T to china right now

...on a high fare day.

Some days, secondary China-LAX is selling for just over $400, roundtrip, all in.

And not just on secondary carriers either; I've routinely seen sub-$500 fares on CA/MU as well.

Right. Went to Vietnam on CA in May. The only reason my fare wasn't sub$600 was that I wanted to stopover and check out Beijing. That cost me a whopping 60 bucks or something...a mild "meet friends for drinks" price. Heck, it was so dirt cheap I sprung for PE, too. I was flying ex-LAX, and found my friend a fare ex-YYZ an even cheaper $550 fare. How on earth does a sane airline meet or beat that? Much less the same fares for an interior market. Hey, happy to take advantage, but sheesh, it's just not sustainable.

Overthecascades · Sat Dec 09, 2017 7:10 am

The XIY Subsidy ended.
Many blame the sub-$500 low fares. However that’s a reason but not all. The premium cabin is not selling either.

mcogator · Sat Dec 09, 2017 8:42 am

timpdx wrote:
LAX772LR wrote:
BlatantEcho wrote:
But when fares are $700 R/T to china right now

...on a high fare day.

Some days, secondary China-LAX is selling for just over $400, roundtrip, all in.

And not just on secondary carriers either; I've routinely seen sub-$500 fares on CA/MU as well.

Right. Went to Vietnam on CA in May. The only reason my fare wasn't sub$600 was that I wanted to stopover and check out Beijing. That cost me a whopping 60 bucks or something...a mild "meet friends for drinks" price. Heck, it was so dirt cheap I sprung for PE, too. I was flying ex-LAX, and found my friend a fare ex-YYZ an even cheaper $550 fare. How on earth does a sane airline meet or beat that? Much less the same fares for an interior market. Hey, happy to take advantage, but sheesh, it's just not sustainable.

Yup, I don't mind it at all. LAX-BKK-LAX for $410 all in on MU, all the while earning full DL MQM.

raylee67 · Sat Dec 09, 2017 9:28 am

LAXintl wrote:
The company says route did not mature with forecast corporate traffic and its overall performance was not meeting expectations.

UA would have been pretty delusional to expect any material corporate traffic to Xian. To make secondary cities in China work with a US route, you need to fly 788 in a Norwegian configuration. Then offer them dirt cheap price. There should be sufficient VFR traffic and tourists filling those from selective and richer secondary cities.

Nicoeddf · Sat Dec 09, 2017 11:40 am

B737900ER wrote:
XIY was bound to fail. It’s a tourist destination first, business second. The real money is in CKG.

There you see: Only stupid people at UA. Should have just asked you.

tphuang · Sat Dec 09, 2017 12:09 pm

It's been hard to sell premium cabin since Chinese gov't started the anti corruption campaign. Oversea business trips that used to pay business now have to travel economy. Hard to make profit when economy is going for $500 R/T. It's like that for most of asia now.

Surprised Xi'an lasted this long. If you ever been there, you'd know why.

Cointrin330 · Sat Dec 09, 2017 12:10 pm

Interior China is a specific, limited market and a seasonal route just doesn't work.

IPFreely · Sat Dec 09, 2017 3:58 pm

Cubsrule wrote:
DfwRevolution wrote:
TheLion wrote:
A weak strategy, ignoring the emerging market opportunities of tomorrow for short-sighted maximum profitability today. BA are slowly but surely driving themselves into a hole doing the same. A one trick pony cannot dance the tango when it has only learned to line dance.

Maximizing profits in the short-run also maximizes profits in the long-run. That's basic math. See: discounted cash flows.

Not necessarily true. If I forgo $1,000,000 next year to make $1,000 this year I come out behind even with discounting. It depends on the magnitude of the profits.

This assumes that making $1,000 this year stops you from making $1,000,000 next year. That is a bad assumption. United moving an airplane away from an unprofitable Xian route to a profitable route this year does not mean the airplane cannot be put back on the Xian route next year, or sometime in the future, when it might be profitable.

Cubsrule · Sat Dec 09, 2017 4:03 pm

IPFreely wrote:
Cubsrule wrote:
DfwRevolution wrote:

Maximizing profits in the short-run also maximizes profits in the long-run. That's basic math. See: discounted cash flows.

Not necessarily true. If I forgo $1,000,000 next year to make $1,000 this year I come out behind even with discounting. It depends on the magnitude of the profits.

This assumes that making $1,000 this year stops you from making $1,000,000 next year. That is a bad assumption. United moving an airplane away from an unprofitable Xian route to a profitable route this year does not mean the airplane cannot be put back on the Xian route next year, or sometime in the future, when it might be profitable.

Maybe. But in the context of this discussion, it’s probably true that lack of continuity costs UA money. So it’s probably more like $1,000 this year and $800,000 next year or $1,000,000 next year.

FSDan · Sat Dec 09, 2017 4:06 pm

jhsusman wrote:
Frees up a 787-8 for the new Denver - London route. Not sure how many days a week that UA was offering the X’ian flights. . .

SFO-XIY was 3x weekly, alternating with the 4x weekly SFO-CTU. Together these routes used up two 788 frames. With SFO-XIY being dropped, it may allow for SFO-CTU to be done with one aircraft, although in order for that to happen I think either 1) SFO-CTU would need to be reduced to 3x weekly, 2) SFO-ZRH or SFO-KIX would need to be dropped to 6x weekly instead of daily, or 3) a 789 would have to operate at least one weekly SFO-CTU frequency.

However, even with SFO-XIY going away, the 788 fleet appears to be over-scheduled for summer 2018 as currently loaded. UA's not done finalizing their S18 widebody schedule by any means.

zakuivcustom · Sat Dec 09, 2017 4:38 pm

(Reading through some comments)

Why do people think UA is squendering a ton of money ending the route anyway? It is clearly a subsidized route that once the subsidy ends, routes end. UA looks at the trend and determined that the growth is just not enough for UA to make money on the route without subsidy, the end.

And XIY is just not a huge business destination anyway. Out of the 3 Western Triangle cities (CTU, CKG, and XIY), XIY is definitely the weakest of the 3.

The only other city in interior China that would be somewhat richer is WUH, but CZ is already flying that route (with sub-600 Y fare), so I doubt UA would expend there. CKG can work, since HU hasn't go into SFO yet.

Flighty · Sat Dec 09, 2017 5:02 pm

We (observers) forecasted that these secondary Chinese cities would become major business destinations.

In fact (at least when I visited china 3 yrs ago) business ties lag well behind forecasts. The chinese business environment is in turmoil. There is still limited rule of law. Capital controls are rife. China is not developing as people expected, and probably is not developing as fast as certain statistics say. A lot of Chinese business is offshoring away from China, for legal reasons. Many prominent figures sent their family out of China, and in fact, they do not live there. Chinese business is often conducted elsewhere - Switzerland, California, Australia, Dubai, London, Paris, NYC. That is where the principals are located. Just my feeling about the discrepancy between Chinese growth and the lack of activity on the ground.

flyfresno · Sat Dec 09, 2017 5:25 pm

Really sad as it’s nice from a tourist POV to have multiple routes into interior China that bypass the big coastal hubs. CTU is still happening, but I was really hoping this would survive too.

IPFreely · Sat Dec 09, 2017 6:11 pm

Cubsrule wrote:
Maybe. But in the context of this discussion, it’s probably true that lack of continuity costs UA money. So it’s probably more like $1,000 this year and $800,000 next year or $1,000,000 next year.

No maybe about it. United does not have to fly unprofitable flights to Xian now to keep the right to fly them in the future. They can go back to Xian anytime it becomes profitable to do so, if that ever happens.

zakuivcustom · Sat Dec 09, 2017 6:13 pm

flyfresno wrote:
Really sad as it’s nice from a tourist POV to have multiple routes into interior China that bypass the big coastal hubs. CTU is still happening, but I was really hoping this would survive too.

I guess the problem is, for most American tourists going on a China trip, it's highly likely that Xi'an would not be the only stop on the itinerary. Most people may as well stop in PEK (or Shanghai) for a day or two, before moving into the interior.

Flighty wrote:
We (observers) forecasted that these secondary Chinese cities would become major business destinations.

In fact (at least when I visited china 3 yrs ago) business ties lag well behind forecasts. The chinese business environment is in turmoil. There is still limited rule of law. Capital controls are rife. China is not developing as people expected, and probably is not developing as fast as certain statistics say. A lot of Chinese business is offshoring away from China, for legal reasons. Many prominent figures sent their family out of China, and in fact, they do not live there. Chinese business is often conducted elsewhere - Switzerland, California, Australia, Dubai, London, Paris, NYC. That is where the principals are located. Just my feeling about the discrepancy between Chinese growth and the lack of activity on the ground.

Agree, especially for secondary Chinese cities the "growth" is often just a facade anyway. They can build all the big skyscrapers they want (hard product), but all the services, laws, etc. (soft product) have yet to even came close to catching up. One can easily see the same thing in many sectors in mainland China anyway (i.e. how CN3 has nice planes and nice seats, but still relatively crappy services. Nice airport terminals like PEK, but can't even find any have decent places to eat). With that, it's no wonder all the smarter Chinese businesspersons take their money out of China and start buying up everything in the west :rotfl:

.

flyfresno · Sat Dec 09, 2017 6:42 pm

zakuivcustom wrote:
flyfresno wrote:
Really sad as it’s nice from a tourist POV to have multiple routes into interior China that bypass the big coastal hubs. CTU is still happening, but I was really hoping this would survive too.

I guess the problem is, for most American tourists going on a China trip, it's highly likely that Xi'an would not be the only stop on the itinerary. Most people may as well stop in PEK (or Shanghai) for a day or two, before moving into the interior.

Yes, if you’ve never been to China before, you will likely visit Shanghai and/or Beijing (probably the two most visited cities in China, not counting HK as part of China). But, for those of us who have been to China multiple times, or for those who are planning on visiting the Central or East only, and there are a lot of people from the Americas that fall into that category, Xi’an is a much more convienant jumping off point. It should be noted that, while much more than half of the population of China is east of Xi’an, the geographic middle of the country is centered only a few dozen km outside of the city, meaning that (slightly) more than half of China’s land mass is to the west of it. Obviously, no major airline is going to serve a route that’s unprofitable and doesn’t have enough business/premium traffic, but from a tourist logistical viewpoint, Xi’an is a much more convienant jumping off point to the center or west of the country.

Cubsrule · Sat Dec 09, 2017 6:50 pm

IPFreely wrote:
Cubsrule wrote:
Maybe. But in the context of this discussion, it’s probably true that lack of continuity costs UA money. So it’s probably more like $1,000 this year and $800,000 next year or $1,000,000 next year.

No maybe about it. United does not have to fly unprofitable flights to Xian now to keep the right to fly them in the future. They can go back to Xian anytime it becomes profitable to do so, if that ever happens.

I wasn’t thinking about traffic rights but rather about the value of maintaining a presence in the market. If I’m a FF on XIY-US, it’s hard for UA to capture my business if they are in and out of XIY. I don’t know if the monetary value of continuity is quantifiable but I don’t think there’s any question that it is positive.

lightsaber · Sat Dec 09, 2017 7:04 pm

Cubsrule wrote:
IPFreely wrote:
Cubsrule wrote:
Maybe. But in the context of this discussion, it’s probably true that lack of continuity costs UA money. So it’s probably more like $1,000 this year and $800,000 next year or $1,000,000 next year.

No maybe about it. United does not have to fly unprofitable flights to Xian now to keep the right to fly them in the future. They can go back to Xian anytime it becomes profitable to do so, if that ever happens.

I wasn’t thinking about traffic rights but rather about the value of maintaining a presence in the market. If I’m a FF on XIY-US, it’s hard for UA to capture my business if they are in and out of XIY. I don’t know if the monetary value of continuity is quantifiable but I don’t think there’s any question that it is positive.

There is a value. If UA is losing a little, they would develop the route.

More than likely, they are losing more per flight than they would make in the future. Since future money is cheap money.. There are other routes UA could make money with the aircraft.

There really is no hope for a few years. Then US airlines will revisit the decision. Right now, I would expect UA to lose the cost of one 788 prior to the route being profitable.

Lightsaber

xjetflyer2001 · Sat Dec 09, 2017 7:41 pm

tphuang wrote:
It's been hard to sell premium cabin since Chinese gov't started the anti corruption campaign. Oversea business trips that used to pay business now have to travel economy. Hard to make profit when economy is going for $500 R/T. It's like that for most of asia now.

Surprised Xi'an lasted this long. If you ever been there, you'd know why.

Why if someone has been to Xi'an would they be surprised the flight lasted this long?
I don't quite understand your comment
I've been to Xi'an and absolutely loved it, one of my favorite cities in China and I've been to quite a few.
I didn't think the flight would last just because I periodically checked the loads as I wanted to take the flight, just never had the time, but they were never very good. I would think that's more to do with the fact that Xi'an isn't a well known city in the United States for one, but as others have said, for people who have heard of it, it's more tourist travel than business travel

flyfresno · Sat Dec 09, 2017 8:23 pm

xjetflyer2001 wrote:
tphuang wrote:
It's been hard to sell premium cabin since Chinese gov't started the anti corruption campaign. Oversea business trips that used to pay business now have to travel economy. Hard to make profit when economy is going for $500 R/T. It's like that for most of asia now.

Surprised Xi'an lasted this long. If you ever been there, you'd know why.

Why if someone has been to Xi'an would they be surprised the flight lasted this long?
I don't quite understand your comment
I've been to Xi'an and absolutely loved it, one of my favorite cities in China and I've been to quite a few.
I didn't think the flight would last just because I periodically checked the loads as I wanted to take the flight, just never had the time, but they were never very good. I would think that's more to do with the fact that Xi'an isn't a well known city in the United States for one, but as others have said, for people who have heard of it, it's more tourist travel than business travel

Agreed: Xi’an has some great features: wonderful food from the West Chinese / Muslim quarter that is very hard to find anywhere east of Xi’an, beautiful city walls that are much less touristy than in other cities, and of course the Terra Cotta Warriors and surrounding toombs and temples. Also, you have to pass through / connect in Xi’an to get to many interesting places in the western half of the country. It’s really a great tourist hub. Just not exactly, it appears, the best business market.

IPFreely · Sat Dec 09, 2017 8:30 pm

Cubsrule wrote:
I wasn’t thinking about traffic rights but rather about the value of maintaining a presence in the market. If I’m a FF on XIY-US, it’s hard for UA to capture my business if they are in and out of XIY. I don’t know if the monetary value of continuity is quantifiable but I don’t think there’s any question that it is positive.

If someone is flying XIY-US and UA is the only non-stop option, UA is going to capture that business. No passenger is going to care that UA exited that route then returned one or two or five years ago.

B737900ER · Sat Dec 09, 2017 9:05 pm

Nicoeddf wrote:
B737900ER wrote:
XIY was bound to fail. It’s a tourist destination first, business second. The real money is in CKG.

There you see: Only stupid people at UA. Should have just asked you.

No need to get snippy about it.

notconcerned · Sat Dec 09, 2017 10:14 pm

jhsusman wrote:
Frees up a 787-8 for the new Denver - London route. Not sure how many days a week that UA was offering the X’ian flights. . .

Maybe the 787-8 will end up on the rumored SFO-PPT

zakuivcustom · Sat Dec 09, 2017 10:14 pm

flyfresno wrote:
xjetflyer2001 wrote:
tphuang wrote:
It's been hard to sell premium cabin since Chinese gov't started the anti corruption campaign. Oversea business trips that used to pay business now have to travel economy. Hard to make profit when economy is going for $500 R/T. It's like that for most of asia now.

Surprised Xi'an lasted this long. If you ever been there, you'd know why.

Why if someone has been to Xi'an would they be surprised the flight lasted this long?
I don't quite understand your comment
I've been to Xi'an and absolutely loved it, one of my favorite cities in China and I've been to quite a few.
I didn't think the flight would last just because I periodically checked the loads as I wanted to take the flight, just never had the time, but they were never very good. I would think that's more to do with the fact that Xi'an isn't a well known city in the United States for one, but as others have said, for people who have heard of it, it's more tourist travel than business travel

Agreed: Xi’an has some great features: wonderful food from the West Chinese / Muslim quarter that is very hard to find anywhere east of Xi’an, beautiful city walls that are much less touristy than in other cities, and of course the Terra Cotta Warriors and surrounding toombs and temples. Also, you have to pass through / connect in Xi’an to get to many interesting places in the western half of the country. It’s really a great tourist hub. Just not exactly, it appears, the best business market.

I don't disagree. XIY is definitely a great hub for anyone going up the Silk Road (Dunhuang, Jiayuguan, and even further up to Xinjiang), or just exploring the region which was the cradle of Chinese civilization. The only problem, of course, is tourism alone is usually not the best way to make money on a long-haul flight (Unless it's something like Japan<->Hawaii).

On a side note, though, XIY international flights are not even that great even within the region anyway. ICN is 12/wk (daily on KE and 5/wk on OZ), but KIX is 1/wk on 9C while NRT is 3/wk on HU, then you have 2/day on HKG. Definitely small compare to ~16-17/day from SZX or 20+/day from PEK :rotfl:

It does have those random FCO and CDG flights on HU, along with SYD & MEL, but last I check, HU is not really making money.

Cubsrule · Sat Dec 09, 2017 10:37 pm

IPFreely wrote:
Cubsrule wrote:
I wasn’t thinking about traffic rights but rather about the value of maintaining a presence in the market. If I’m a FF on XIY-US, it’s hard for UA to capture my business if they are in and out of XIY. I don’t know if the monetary value of continuity is quantifiable but I don’t think there’s any question that it is positive.

If someone is flying XIY-US and UA is the only non-stop option, UA is going to capture that business. No passenger is going to care that UA exited that route then returned one or two or five years ago.

Why? Is XIY-SFO-LAX so obviously superior to, for instance, XIY-ICN-LAX that UA will get all of the non-SFO US business?

zakuivcustom · Sat Dec 09, 2017 11:11 pm

Cubsrule wrote:
IPFreely wrote:
Cubsrule wrote:
I wasn’t thinking about traffic rights but rather about the value of maintaining a presence in the market. If I’m a FF on XIY-US, it’s hard for UA to capture my business if they are in and out of XIY. I don’t know if the monetary value of continuity is quantifiable but I don’t think there’s any question that it is positive.

If someone is flying XIY-US and UA is the only non-stop option, UA is going to capture that business. No passenger is going to care that UA exited that route then returned one or two or five years ago.

Why? Is XIY-SFO-LAX so obviously superior to, for instance, XIY-ICN-LAX that UA will get all of the non-SFO US business?

I would say the only advantage would be somebody flying from a US cities that doesn't have TPAC service, but does have a flight to SFO (i.e. For someone from, let say, IND, they can go IND-SFO-XIY instead of something like IND-ORD-PEK-XIY). Those traffic are not exactly big in number, though.

For someone starting from the like of NYC or LAX, no, it is actually probably easier to connect at PEK or ICN.

IPFreely · Sat Dec 09, 2017 11:23 pm

Cubsrule wrote:
Why? Is XIY-SFO-LAX so obviously superior to, for instance, XIY-ICN-LAX that UA will get all of the non-SFO US business?

First, XIY-SFO is far superior to XIY-ICN-SFO for a SFO bound passenger.

Second, XIY-SFO-LAX is superior to XIY-ICN-LAX for a LAX bound passenger. If you travelled more you would understand why. In the case of any any disruptions (weather, ATC, mechanical, etc.), it is much better for a passenger to miss a connection in SFO than ICN. In SFO there are dozens of daily flights plus ground transportation to get to LAX, meaning a missed connection might result in arriving in LAX a few hours late. Missing a connection in ICN offers few options and probably means arriving in LAX days late, not hours late. When taking a connecting flight I always opt for the connection that gets me as close as possible to my destination on the first leg, preferably within driving distance.

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