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Topic: UA Defers SFO-CAN For 1 Year
Username: PA110
Posted 2008-04-11 14:25:46 and read 5961 times.

Just received an email from UA Sales office announcing that they have just applied to USDOT to defer startup of SFO-CAN for 1 year.

fair use excerpt:

United applied to the U.S. Department of Transportation (DOT) to defer the start of nonstop flights between San Francisco and Guangzhou for one year. This is one of many difficult decisions that United must make in an environment when oil prices are at $100-plus per barrel, when at the time United originally applied for the route, the jet fuel price was around US$72 a barrel.


Despite whatever potential this route may have, it is obviously not the time to start a brand new longhaul route, which will no doubt take time to develop. I can't say I blame them for delaying.

[Edited 2008-04-11 14:26:52]

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: Commavia
Posted 2008-04-11 14:38:42 and read 5891 times.



Quoting PA110 (Thread starter):
it is obviously not the time to start a brand new longhaul route

An interesting perspective considering that several other major U.S. airlines will be starting multiple "brand new longhaul route[s]" each in the next six weeks.

One has to wonder what better use United has for those two 777s.

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: Burnsie28
Posted 2008-04-11 14:41:49 and read 5874 times.

Good news for NW to continue being on the only US carrier in CAN.

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: Flavio340
Posted 2008-04-11 14:43:52 and read 5860 times.

How are the loads and yields on NW NRT-CAN? I think it would be hard to fill a 777 from the states when NW only runs a 757-200 with 5th freedoms.

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: Ikramerica
Posted 2008-04-11 14:45:08 and read 5839 times.



Quoting PA110 (Thread starter):
Despite whatever potential this route may have, it is obviously not the time to start a brand new longhaul route, which will no doubt take time to develop. I can't say I blame them for delaying.

It's only obvious if you agree with UA's decision.

It is probably very annoying to airlines that lost out to UA in the lottery for this destination, and will impact UA negatively in the future when pursuing new routes.

That is, of course, if it isn't just a matter of UA deferring any sort of changes and major additions to their route structure until the NW+DL, CO+UA thing sorts itself out.

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: LAXdude1023
Posted 2008-04-11 14:49:43 and read 5806 times.



Quoting Burnsie28 (Reply 2):
Good news for NW to continue being on the only US carrier in CAN.

Good news for CZ, who continues to operate the only nonstop flight from CAN to the US through North Americas number 1 Trans-Pacific Gate way: LAX!!!!

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: A330323X
Posted 2008-04-11 14:51:40 and read 5796 times.



Quoting Ikramerica (Reply 4):
It is probably very annoying to airlines that lost out to UA in the lottery for this destination,

UA was the only applicant for the CAN route designation.

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: United1
Posted 2008-04-11 14:52:34 and read 5783 times.



Quoting Ikramerica (Reply 4):
It is probably very annoying to airlines that lost out to UA in the lottery for this destination, and will impact UA negatively in the future when pursuing new routes.

No other airline applied to serve CAN and this particular frequency was specifically dedicated to CAN.

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: MAH4546
Posted 2008-04-11 14:52:37 and read 5782 times.



Quoting Ikramerica (Reply 4):
It is probably very annoying to airlines that lost out to UA in the lottery for this destination, and will impact UA negatively in the future when pursuing new routes.

UA was uncontested, or this would not be happening, nor allowed, as the runner up would get route authority.

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: Ikramerica
Posted 2008-04-11 14:53:15 and read 5782 times.



Quoting A330323X (Reply 6):
UA was the only applicant for the CAN route designation.

But there were "X" number of China frequencies up for grabs, am I correct?

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: United1
Posted 2008-04-11 14:53:27 and read 5782 times.

LOL...three of us saying the same thing at once.

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: United1
Posted 2008-04-11 14:54:09 and read 5765 times.



Quoting Ikramerica (Reply 9):
But there were "X" number of China frequencies up for grabs, am I correct?

Yes but this one had to be used for CAN.

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: A330323X
Posted 2008-04-11 14:55:02 and read 5766 times.



Quoting Ikramerica (Reply 9):
But there were "X" number of China frequencies up for grabs, am I correct?

That was for 2009, with 28 frequencies available.

In 2008, there were 7 frequencies available that were specifically designated for CAN, and UA was the lone applicant for them.

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: Panamair
Posted 2008-04-11 14:56:22 and read 5746 times.



Quoting Ikramerica (Reply 4):
It is probably very annoying to airlines that lost out to UA in the lottery for this destination, and will impact UA negatively in the future when pursuing new routes

Actually, IIRC, wasn't the CAN allotment done as a separate "CAN-only" case? The 2008 allocation was for CAN service only and UA was the only who applied...

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: AirCop
Posted 2008-04-11 14:57:47 and read 5746 times.



Quoting PA110 (Thread starter):
Despite whatever potential this route may have, it is obviously not the time to start a brand new longhaul route, which will no doubt take time to develop. I can't say I blame them for delaying.

I'm thinking there is more going on behind the scenes than UA management will admit. That's just the investigator in me.

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: United1
Posted 2008-04-11 15:05:02 and read 5690 times.



Quoting AirCop (Reply 14):
I'm thinking there is more going on behind the scenes than UA management will admit. That's just the investigator in me.

Its one of three things in my opinion:

UA ran the numbers and decided that they could not make a profit on this route this year, and decided to see if they could put it off till next year when possibly the market will be stronger.

UA found an as of yet unannounced route to deploy the aircraft on that will be more profitable the CAN.

UA realised that they are going to be short on aircraft this year while the cabin retrofit is taking place.

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: Flyingcat
Posted 2008-04-11 15:53:42 and read 5528 times.

Hmm I wonder if NW will reconsider they are the only other carrier that could possibly apply.

It would be an added plus on merger announcement day.

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: Azjubilee
Posted 2008-04-11 15:57:53 and read 5504 times.

NWA already has the authority to serve CAN... and they do so from NRT. Why NRT? Because the 744 is too large for DTW-CAN and by routing via NRT, NWA can feed the CAN flight from all NRT gateways as well as within Asia. It's about time they upgauge this to a 332!!


AZJ

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: TN757Flyer
Posted 2008-04-11 15:58:50 and read 5496 times.



Quoting Commavia (Reply 1):
An interesting perspective considering that several other major U.S. airlines will be starting multiple "brand new longhaul route[s]" each in the next six weeks.

It is odd, considering most carriers are considering international routes their salvation. Even though the Olympics are in PEK, I would have thought some residual traffic would have flown through CAN. I too wonder if there's not more behind this decision than oil prices (though that is a pretty legitimate excuse for all things airline related these days).

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: United1
Posted 2008-04-11 16:11:08 and read 5431 times.



Quoting TN757Flyer (Reply 18):
It is odd, considering most carriers are considering international routes their salvation. Even though the Olympics are in PEK, I would have thought some residual traffic would have flown through CAN.

I'm sure that it will for a few months but after the Olympics are over the traffic will drop back down to current levels. NW has been flying to CAN for years however only using a 757, event though the CAN region is one of the richest in China. Its quite possible that there just isnt enough demand to fill a 777 right now. CAN also competes to a point with HKG for traffic as well which is not an issue that PVG and PEK have.

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: Daron4000
Posted 2008-04-11 19:02:08 and read 5177 times.



Quoting TN757Flyer (Reply 18):
It is odd, considering most carriers are considering international routes their salvation. Even though the Olympics are in PEK, I would have thought some residual traffic would have flown through CAN. I too wonder if there's not more behind this decision than oil prices (though that is a pretty legitimate excuse for all things airline related these days).

But at the same time, look at DL dropping many new destinatins within a few years or changing their US origin- not all long haul adventures are a gold mine especially when you start 10 all at once. Given that is not what UA is doing but there is still the possibility that given other financial priorities, they don't want to waste valuble money that will be lost while CAN picks up momentum as a viable new route when it can be used for things like the cabin refit etc.

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: Breaker1011
Posted 2008-04-11 21:32:09 and read 4928 times.

Quoting Daron4000 (Reply 20):
But at the same time, look at DL dropping many new destinatins within a few years or changing their US origin- not all long haul adventures are a gold mine especially when you start 10 all at once.

What are the "many" long-haul international destinations has Delta dropped "within a few years?" I can think of CDG-MAA, and some shifts from JFK to ATL or vise-versa for some Euro flights, but other than MAA a long-haul destination that they've closed the doors on entirely does not come to mind. There's been some stop-n-go on a few Carrib/Mexican routes but I'd hardly call those key international long-hauls.

Bottom line, CAN was a boutique opportunity that most carriers felt just couldn't be managed profitably with a nonstop from the USA. If anyone could made it work, UA stood the best chance, but they probably had their doubts even when the signed off the application paperwork. No harm no foul to hold off and hope for better days. This isn't at all unlike the hundreds and hundreds of route authorities that US carriers hold (especially inherited from the likes of PanAM and TWA) across the ponds that sit dormant and unsed, yet "theirs."

[Edited 2008-04-11 21:37:48]

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: KL911
Posted 2008-04-12 05:42:54 and read 4639 times.



Quoting TN757Flyer (Reply 18):
I too wonder if there's not more behind this decision than oil prices (though that is a pretty legitimate excuse for all things airline related these days).

Well, then why do most European carriers still make huge profits? It must be something else.

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: Bobnwa
Posted 2008-04-12 05:50:37 and read 4625 times.



Quoting KL911 (Reply 22):
Well, then why do most European carriers still make huge profits? It must be something else.

Outside of LH,BA and AF/KL which European carriers are making huge profits? Alitalia, Sabena, Swissair, Aer Lingus, Iberia, SAS, Finnair come to mind as carriers not making a huge profit.

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: TN757Flyer
Posted 2008-04-12 06:25:57 and read 4580 times.



Quoting KL911 (Reply 22):
Well, then why do most European carriers still make huge profits? It must be something else.

Isn't this basically what I said? You might want to quantify "most". I dare say some, not most. But thats another thread.

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: Brissedk
Posted 2008-04-12 07:00:59 and read 4519 times.



Quoting Bobnwa (Reply 23):
Outside of LH,BA and AF/KL which European carriers are making huge profits? Alitalia, Sabena, Swissair, Aer Lingus, Iberia, SAS, Finnair come to mind as carriers not making a huge profit.

Wauw, only 1 thing in that statement is correct! Alitalia is down the drain.

Everything else is completely incorrect:

Sabena and Swissair haven't existed for years!

SN is profitable.
LX is profitable (and even more profitable than mighty LH, who owns them...)
EI is profitable.
IB is profitable.
SK is profitable, in spite of the Dash 8 issues.
AY is profitable.

in short: Euroland is doing pretty well...

Regards,
BJ

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: UAL777UK
Posted 2008-04-12 07:51:36 and read 4468 times.

Whilst dissapointing, in the current economic climate I guess its no surprise. I wonder where those 777's will be flying to in the meantime?

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: Bobnwa
Posted 2008-04-12 08:30:19 and read 4295 times.



Quoting Brissedk (Reply 25):
Wauw, only 1 thing in that statement is correct! Alitalia is down the drain.

Everything else is completely incorrect:

Sabena and Swissair haven't existed for years!

SN is profitable.
LX is profitable (and even more profitable than mighty LH, who owns them...)
EI is profitable.
IB is profitable.
SK is profitable, in spite of the Dash 8 issues.
AY is profitable.

in short: Euroland is doing pretty well...

The statement was they were making HUGE profits. I don't think they are.

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: FreequentFlier
Posted 2008-04-12 09:31:25 and read 4019 times.



Quoting Brissedk (Reply 25):
Wauw, only 1 thing in that statement is correct! Alitalia is down the drain.

Everything else is completely incorrect:

Sabena and Swissair haven't existed for years!

SN is profitable.
LX is profitable (and even more profitable than mighty LH, who owns them...)
EI is profitable.
IB is profitable.
SK is profitable, in spite of the Dash 8 issues.
AY is profitable.

in short: Euroland is doing pretty well...

Regards,
BJ

C'mon guys, we've been through this. Oil is priced in dollars, as per OPEC's decision. The price of oil has gone from $72 to $110 in one year. Since oil is priced in dollars, US airlines have eaten the whole cost. Meanwhile, European carriers have their costs priced in euros for the most part. While oil has gone up for them too, their euros strengthened considerably against the dollar, negating a LARGE part of the oil price surge. In other words, US carriers ate the entire cost, European carriers ate very little of it. Hence the current discrepency in profits.

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: BrisseDK
Posted 2008-04-12 09:46:27 and read 3944 times.



Quoting Bobnwa (Reply 27):
The statement was they were making HUGE profits. I don't think they are.

Correct! And what is "HUGE profits"? It is 100% subjective, thus not something which can be "agreed upon". A "HUGE profit" to me, might be an abysmal profit to you, and vice versa. I simply wanted to clarify that the carriers you mentioned (minus Alitalia and the defunct carriers) were in fact profitable.

Quoting FreequentFlier (Reply 28):
C'mon guys, we've been through this. Oil is priced in dollars, as per OPEC's decision. The price of oil has gone from $72 to $110 in one year. Since oil is priced in dollars, US airlines have eaten the whole cost. Meanwhile, European carriers have their costs priced in euros for the most part. While oil has gone up for them too, their euros strengthened considerably against the dollar, negating a LARGE part of the oil price surge. In other words, US carriers ate the entire cost, European carriers ate very little of it. Hence the current discrepency in profits.

Absolutely true! Adding to that, most of the European economies are doing really well, consumers are confident (though not as confident as 1 year ago), and demand remains strong. Very positive factors for European carriers.

Regards,
BJ

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: 777fan
Posted 2008-04-12 10:13:28 and read 3794 times.



Quoting PA110 (Thread starter):
Despite whatever potential this route may have, it is obviously not the time to start a brand new longhaul route, which will no doubt take time to develop. I can't say I blame them for delaying.

Why not? Plenty of carriers are adding international routes.

Quoting Commavia (Reply 1):
One has to wonder what better use United has for those two 777s.



Quoting Flavio340 (Reply 3):
I think it would be hard to fill a 777 from the states when NW only runs a 757-200 with 5th freedoms.

Yes, and with UA's domestic consolidation, it's possible they'd use the "saved" a/c to shuffle the 777s around to serve routes that currently offer multiple frequencies and use midsize a/c such as the 757 and A320.


777fan

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: PIAflyer
Posted 2008-04-12 10:52:36 and read 3620 times.

united made this descision beacuse the economy and route was not ready enough for their bussiness

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: ConcordeBoy
Posted 2008-04-12 13:08:58 and read 3161 times.



Quoting Daron4000 (Reply 20):
look at DL dropping many new destinatins within a few years

...such as?

Quoting KL911 (Reply 22):
Well, then why do most European carriers still make huge profits? It must be something else.

....give 'em a few years in OpenSkies, and let's see how they do now that their bread/butter routes can be attacked by carriers with potentially 100% equivalent access; as the USA carriers have had to now endure for decades.

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: WorldTraveler
Posted 2008-04-12 18:28:54 and read 2762 times.

the route needs to be rebid. There are other carriers that could well be interested by waiting another year.

Let's see what other carriers have to say during the public comment period but I find it hard to believe no other carrier is still not interested in US-CAN if the route is not being used until 2009.

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: BrisseDK
Posted 2008-04-12 19:02:17 and read 2718 times.



Quoting ConcordeBoy (Reply 32):
Quoting Daron4000 (Reply 20):
look at DL dropping many new destinatins within a few years

...such as?

To be fair, they did drop JFK-CPH and later on JFK-ARN (which was transferred from CPH).

Adding to that, CPH seems to be the most successful of the recently launched euro routes from ATL. Will be interesting to see how ARN and CPH performs side-by-side this year.

Regards,
BJ

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: United1
Posted 2008-04-12 19:10:35 and read 2696 times.



Quoting WorldTraveler (Reply 33):
the route needs to be rebid. There are other carriers that could well be interested by waiting another year.

Let's see what other carriers have to say during the public comment period but I find it hard to believe no other carrier is still not interested in US-CAN if the route is not being used until 2009.

I'm not so sure about that, while I have no issue with the route being re-bid, I don't think there are any other US carriers that would go for a US-CAN route at this point. NW might but at this point they would have to dedicate a 744 to the route as an A332 couldn't make the US-CAN journey without a massive weight penalty. Even then NW has had the right to fly US-CAN for several years and instead chooses to fly a 757 from NRT to CAN daily. That tells me that there is not much of a market as NW would have put a larger aircraft on the route from NRT long ago. The other issue is where would you fly the route from? SF or LA is the logical jumping off point however at LA your going up against a Chinese carrier that has been in the market for years. SF is UAs Pacific gateway, as well as home to a huge Chinese ex-pat population, and if they can't make it work from there more then likely no one else can either.

Topic: RE: UA Defers SFO-CAN For 1 Year
Username: Viscount724
Posted 2008-04-13 14:59:02 and read 2391 times.



Quoting 777fan (Reply 30):
Quoting PA110 (Thread starter):
Despite whatever potential this route may have, it is obviously not the time to start a brand new longhaul route, which will no doubt take time to develop. I can't say I blame them for delaying.

Why not? Plenty of carriers are adding international routes.

With fuel at current prices I think many carriers will be cutting back on new route launches, and even eliminating some current routes that may have made economic sense when oil was $50 a barrel but not at $110.


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