United ‘here to stay’ as competition mounts on Australia/US route

In the face of a “hugely competitive” market, United is confident its 30-year legacy in the Australian market will stand it in good stead.

The market has been becoming increasingly competitive, with the December entry of American Airlines on the Sydney-Los Angeles route and Qantas launching a new Sydney-San Francisco service in the same month – both routes that United serves. Virgin Australia and Delta Air Lines also gained final regulatory clearance for their alliance on routes between Australia and the US last year.

Add the pressures of the weakening Australian dollar to the mix and it makes for a challenging environment.

Nonetheless, United managing director Japan and Pacific sales Alison Espley appears to be unfazed.

“We believe that we are fortunate that having been operating here consistently for 30 years, we have strong relationships with the trade, with our frequent flyers, with our corporate customers,” she told Travel Weekly. The airline currently has in the region of 500,000 Australian frequent flyers.

“We believe that by introducing the 787 Dreamliners and becoming an all Dreamliner fleet from the end of March that that will put us in a tremendous position competitively.”

The airline will upgrade the aircraft on its Sydney route to the new Dreamliners by the end of March, bringing it in line with Melbourne which has been using the newer aircraft since its launch in October 2014.

The strength of the airline’s west coast hub also places it in a strong position competitively, according to Espley. It currently offers connections from San Francisco to more than 150 onward destinations, and from Los Angeles to more than 90.

United also recently reconfigured its schedule so that its flights from Sydney departed earlier enabling passengers to make more connections and arrive in their destinations that same day.

“They said they wanted to have dinner in New York that day, and that’s what they can do now,” Espley said.

“We believe we’re well positioned to continue successfully here and as we look to the next few months we are encouraged – the flights are meeting our expectations,” she continued.

The most recent statistics from the Department of Infrastructure for the month of November 2015 showed that United carried 38,028 passengers into and out of Australia for the month – an increase of 7.8% on the same month in 2014. It recorded a load factor of 83% on inbound services and 80.1% on outbound services. In the same month, Qantas saw growth of 2% on its US routes, while Virgin Australia declined by 1.7%. Hawaiian Airlines also saw a decline of 3.8% for the month while Delta saw a heftier 14.5% drop.

However, the impact of the start of the new AA and Qantas services on that picture has yet to be seen.

Specifically addressing concerns over the weakened Australian dollar, Espley referred to the Australian love of travel which she believes will help the airline to weather the storm.

“The US still offers incredibly good value and it’s so diverse that people can make multiple trips even in the same year,” she said.

“And as a US carrier, we’re fortunate that we have strong demand from the US as well. Potentially, with the softening of the dollar, we’re seeing increased demand for travel from the US.”

Image credit: iStock

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