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CO Vs UA In Battle For HKG  
User currently offlineRepublic From Canada, joined Dec 2012, 0 posts, RR: 0
Posted (13 years 6 months 1 day 12 hours ago) and read 2325 times:

Who will have the advantage? United operating the B744 from JFK nonstop or CO with the B772ER from EWR? Is UA planning on the 744 continuing on to Singapore or New Dehli , thus the larger capacity aircraft? Or is UA being overambitious and will switch to a 772ER in the future?

Check out this article:

Continental Starts Nonstop Flights Between New York, Hong Kong
Launching the first nonstop passenger flights between New York and Hong Kong, Continental Airlines Inc. took a swipe Friday at the standard of service offered by rival United Airlines , which starts competing on the route next month. Continental Chairman and Chief Executive Gordon Bethune said he wasn't concerned about going up against United -- although United executives have insisted their company's larger presence in the Hong Kong market will be an advantage. "As far as United [is concerned], I think one of the best things we've got going for us is that most people do know United, and so they're anxious to try somebody else," Mr. Bethune told a news conference. The United vice president in charge of the Pacific South region, Jim Brennan, predicted earlier in the week his company will gain an edge through its other operations in Hong Kong -- with nonstop flights to Los Angeles, San Francisco, Chicago and three Asian cities: Singapore, Tokyo and New Delhi. It remains unclear how Hong Kong's flag carrier, Cathay Pacific Airways Ltd., will respond to the new competition. Cathay now flies to New York with a stop in Vancouver -- and Continental says its new nonstop flights, taking a northern polar route over Chinese and Russian air space, will shave between two and eight hours off the current travel time.

-- Compiled from Dow Jones Newswires




25 replies: All unread, showing first 25:
 
User currently offlineRayChuang From United States of America, joined Jun 2000, 8003 posts, RR: 5
Reply 1, posted (13 years 6 months 1 day 12 hours ago) and read 2205 times:

Hey, isn't it just a bit coincidental that CX announced they are leasing three A340-600's that will be in the fleet by early 2003?

My guess is that CX will use the A346's for the HKG-JFK route starting the summer of 2003.


User currently offlineDynkrisolo From United States of America, joined Feb 2001, 1863 posts, RR: 7
Reply 2, posted (13 years 6 months 1 day 9 hours ago) and read 2164 times:

UA should have the advantage hands down. UA has a much better brand recognition on both sides of the Pacific Ocean as a trans Pacific operator. Also, JFK is a more traditional NYC gateway than EWR.

If you look back on DL's trans Pacific ambition in the early 90s, DL eventually had to pull out from SEL, TPE, HKG, and BKK partly due to poor brand recognition. I don't imply that CO will follow DL's footstep. IMO, CO's expansion is much better planned than DL's. In addition, CO is not a total unknown with the presence of Air Mike in HKG. EWR is a CO hub, but JFK is not a UA hub. So, a slight advantage for CO in this department.


User currently offlineDonC From , joined Dec 1969, posts, RR:
Reply 3, posted (13 years 6 months 1 day 8 hours ago) and read 2154 times:

I think CO has advantage to being a new presence. When they started EWR-NRT flights a few years back, the loads were very high from start and many Japanese prefer them and 777. I assume HKG might be same. UA has many problems with on-time performance, service, and reliability. NW has problems too. I think CO and AA will do nothing but gain in the Pacific in years to come.

User currently offlineDynkrisolo From United States of America, joined Feb 2001, 1863 posts, RR: 7
Reply 4, posted (13 years 6 months 1 day 8 hours ago) and read 2147 times:

I will point out the DL example again. When one doesn't have the brand recognition and the extensive Pacific network that UA and NW have, it's harder to attract premium traffic. If one fills the plane with low-yield traffic, one is unlikely to succeed. DL did a poor job marketing its product in Asia the first time around. I don't know whether CO is doing a better job. My hunch is CO is doing a better marketing job than DL was.

User currently offlineDeltAirlines From United States of America, joined May 1999, 8897 posts, RR: 12
Reply 5, posted (13 years 6 months 1 day 8 hours ago) and read 2142 times:

From the US standpoint, I would prefer CO because their service is the best among international US carriers.

Jeff


User currently offlineSJC>SFO From , joined Dec 1969, posts, RR:
Reply 6, posted (13 years 6 months 1 day 8 hours ago) and read 2132 times:

It is a hard get. I think UA has the advantage because of what Dinkrisolo pointed out that UA has a much better recognition factor than CO in that part of the world, which gives them the biggest advantage. However CO does have a couple of their own. They are operating the 772 which means if loads arent as high as first expected, their profits will probably be better. As was said JFK is NOT a UA hub. You can't connect from JFK to alot of places on UA. LAX, SFO.... maybe ORD is all? I don't know the details. However from EWR you can go almost anywhere in the US simply because it is COs biggest hub. This, however, may not make so much of a difference.... If the passengers are looking for connecting flights to elsewhere in the US, they can get to just as many places by flying UA in to LAX or SFO straight from HKG..... at least I thought UA was/is/is going to operated from west coast to HKG...

User currently offlineFlyua From United States of America, joined Mar 2001, 317 posts, RR: 6
Reply 7, posted (13 years 6 months 1 day 8 hours ago) and read 2135 times:

One thing's for sure -- over the past few years, we at United have had to learn that "bigger does not necessarily make better!" I've heard more and more of our frequent fliers comment about good experiences on Continental, and I also see more and more of those big, blue Continental bag tags on our airplanes. We will have our work cut out for ourselves competing for the high-yield NY customer with Continental. Their product and their employees' drive have really transformed the market.

User currently offlineRepublic From Canada, joined Dec 2012, 0 posts, RR: 0
Reply 8, posted (13 years 6 months 1 day 7 hours ago) and read 2125 times:

Good point about JFK not being a UA hub. Flying from a non-hub city with their largest capacity airplane? Unless large numbers of NYC area UA passengers have been connecting at other UA hubs for the HKG route, where is all the demand coming from? If this is the case, UA will see loads decrease for ORD-HKG or LAX-HKG or SFO-HKG.

With all the new seats available daily, if demand is not as strong as forecasted, there could be some attractive fares.

Rgds,
Joe


User currently offlineJZ From United States of America, joined May 1999, 252 posts, RR: 0
Reply 9, posted (13 years 6 months 1 day 7 hours ago) and read 2112 times:

I think CO has quite an advantage over UA because EWR is a hub and JFK is is not a hub for UA. CO can easily funnel passengers from eastern part of the US through EWR to HKG. At the same time, UA has to fill the plane with passengers originating from the NY area. Traditionally, passengers going to HKG from JFK have to connect through NRT. A direct JFK-HKG flight will take passengers away from the JFK-NRT route. UA will end up fighting for the passengers against NW, JL, NH, CX, even OZ. At the same time, CO can enjoy its exclusive presence from EWR.

User currently offlineILUV767 From United States of America, joined May 2000, 3141 posts, RR: 8
Reply 10, posted (13 years 6 months 1 day 7 hours ago) and read 2108 times:

JFK not a hub for United?

Hmm....I find this interesting. While it is not an official hub for the friendly skies, it is a very big international gateway.
From JFK, United flies to Asia, Europe, and South America. UA is filling their 744 serive to NRT, and I dont expect them to have a problem filling a 744 to HKG.


User currently offlineSegmentKing From , joined Dec 1969, posts, RR:
Reply 11, posted (13 years 6 months 1 day 7 hours ago) and read 2098 times:

Then why is United underwriting a $600 mil plus terminal at JFK that will give them a total of 18 gates, whereas now they have leases on 9 I believe.

JFK is a big O/D market for United.

Boston, San Juan, IAD shuttle, SEA, SFO, and LAX are just a few of the "domestic" US points offered.

Ya also forgot one thing.... UA can fly the 747-400 with a lower % of passengers, but you keep forgetting what's below the cabin floor of the United flights to Hong Kong. (lets just pray it's not firecrackers!)

The hub-and-spoke system works well for United, but it is looking for new ways to funnel traffic. I expect with the demise of the TWA hub that United will pick up some additional flying.

Nate


User currently offlineRepublic From Canada, joined Dec 2012, 0 posts, RR: 0
Reply 12, posted (13 years 6 months 1 day 6 hours ago) and read 2104 times:

I posted this on another thread, so I apologize to those who have already read this article. I feel that is relevant to this discussion. Read on to get Bethune's thoughts on UA filling their 744. (BTW, I am not taking sides one way on the other, just engaging in a discussion with my fellow airline enthusiasts.)


Continental Air CEO Confident On Direct HK-NY Flights
By ZACH COLEMAN, WSJ

HONG KONG--Gordon M. Bethune, Chairman and Chief Executive of Continental Airlines Inc. (CAL), said he is confident Continental's new nonstop service between New York and Hong Kong will launch successfully despite the slowing U.S. economy.

"Timing could be better but it could be worse," said Bethune, speaking to Dow Jones Newswires in Hong Kong.

Bethune said the airline spent two years planning for the route after buying Boeing 777s that have sufficient range to fly non-stop between Hong Kong and New York - provided Russia opened commercial services over its airspace via the north pole. This came last month, and Continental's first flight will take off Saturday.

"You didn't see Cathay and United even thinking about it till we went," he said. Cathay Pacific Airways Ltd. (H.CPA), based in Hong Kong, has said it is considering its own nonstop service. UAL Corp.'s (UAL) United Airlines, which announced plans for nonstop Hong Kong-New York service a month after Continental, plans to launch its flights in April using a Boeing 747-400.

Mr. Bethune dismissed the competition from United: "They've got a 747-400 to fill. You've got 30% to 40% more capacity than I have to sell every flight. Good luck to you."

Continental will have, Mr. Bethune said, the "right size airplane too. Don't have the cost of a 747 to fly. Passengers like it better than a 747 to fly. It's more efficient. So I've got an edge in the market."

"We're going to have Cantonese and Mandarin [speaking] flight attendants, five minimum," he said, "where United's only got three. Don't tell me what United's got. We don't want to be like United."

Mr. Bethune said Continental will also have the advantage of being able to attract passengers going to or from other U.S. cities since it has a hub in New York and United doesn't. "We can do it because we own New York," he said.

On the Hong Kong end, Mr. Bethune said Continental had reached what's called a "pro rate" agreement that will allow it to sell through tickets from the U.S. to destinations in China and around the region on Dragonair. That won't necessarily help Continental draw customers from those cities, but he said the Hong Kong market itself provides a sufficient customer base.





User currently offlineDynkrisolo From United States of America, joined Feb 2001, 1863 posts, RR: 7
Reply 13, posted (13 years 6 months 1 day 5 hours ago) and read 2075 times:

SegmentKing:

You might be surprised that the B772ER actually has more cargo carrying capability than the B774. If you don't believe me, take a look at this chart http://www.boeing.com/commercial/value/acmorrev_5.html.


User currently offlineRayChuang From United States of America, joined Jun 2000, 8003 posts, RR: 5
Reply 14, posted (13 years 6 months 1 day 5 hours ago) and read 2069 times:

I personally think that JFK/EWR-HKG flights are going to be quite profitable for both CO and UA.

The reason is very simple: you save 3-5 hours compared to a one-stop operation such as JFK to HKG connecting through either ORD, SFO, LAX or NRT.

If UA were to buy a plane that can carry a big load to Asia but has lots of range, UA may be a candidate to buy the 747X (not the 747X Stretch). Remember, the 747X has a range even longer than that of the 777-200LR, which gives lots of safety margins on a flight like JFK-HKG; that could allow UA to carry more revenue-generating cargo on this route. A UA 747X is definitely able to fly JFK-JNB on both directions non-stop on a year-round basis.


User currently offlineCba From United States of America, joined Jul 2000, 4531 posts, RR: 3
Reply 15, posted (13 years 6 months 1 day 4 hours ago) and read 2068 times:

Rememer, CO and NW are partners, so CO can have passengers connect in HKG.

SJC>SFO, Newark is not CO's biggest hub, Houston is.


User currently offlineWatewate From Canada, joined Nov 2000, 2284 posts, RR: 1
Reply 16, posted (13 years 6 months 1 day 4 hours ago) and read 2063 times:

But of course, most of prefer our usual 'more-stops-the-better' routings.  Smile

User currently offlineRepublic From Canada, joined Dec 2012, 0 posts, RR: 0
Reply 17, posted (13 years 6 months 1 day 4 hours ago) and read 2062 times:

Cba:

You are correct. However, according to the current NW timetable, the only NW connection out of HKG is NRT.

Rgds,
Joe


User currently offlineSJC>SFO From , joined Dec 1969, posts, RR:
Reply 18, posted (13 years 6 months 1 day 4 hours ago) and read 2052 times:

Sorry Cba, I'm not an expert on Continetal, thanks for the correction. They still have a huge presence there. ILUV767- Even though United does have TONS of international flights out of JFK, Most passengers flying in to JFK from outside the United States are not connecting on to other countries (except canada maybe, from europe and south america). I think United would have done better putting a 772 on this route personally, but I'm sure the route planers at UA know whats best for their "friendly skies". I'm sure that they have put quite alot of thought in to the effects of this new flight on SFO/LAX/ORD-HKG routes......

User currently offlineILUV767 From United States of America, joined May 2000, 3141 posts, RR: 8
Reply 19, posted (13 years 6 months 1 day 3 hours ago) and read 2049 times:

Currently the 744 is the primary plane accross the pacific, with the exception of PEK and NRT(from SEA).

United's flights to HKG from SFO has been going out at record loads, and the demand for a JFK-HKG flight is there, so why not put a 744 on that route? It may go to a 777 as more become avalible...I really dont know.


Happy Flying!

beU N I T E D


User currently offlineJetsetTX From , joined Dec 1969, posts, RR:
Reply 20, posted (13 years 6 months 1 day 3 hours ago) and read 2040 times:

In response to Flyua's post, I can only say thank you. Receiving a compliment like that from a competing carrier's employees is the highest form of flattery. Hope I see you non-reving through Houston some time.

User currently offlineLadevale From , joined Dec 1969, posts, RR:
Reply 21, posted (13 years 6 months 1 day 3 hours ago) and read 2043 times:

Why is the success of CO's or UA's flight to HKG dependent only on the US point of origin, Newark or JFK? It should also be dependent on the traffic each hopes to generate from Chinese Nationals or HK residents, originating in HK. Aren't we forgetting that the flight serves two O&D markets? New York and Hong Kong!

At the moment, Cathay does not service the New York market with a non-stop flight. (It's flight to NY, I think , stops in Vancouver.) So, I suppose Continental stands as good a chance as United of capturing whatever O&D traffic Cathay currently does not serve by flying non-stop to New York.

But, one has to wonder what kind of traffic that will be, since a single flight a day from HK isn't going to be as appealing to a time-senstive traveler as the current thinking makes it out to be. Time-sensitive travelers often tend to be your high-yield passengers. And, from my research, these travellers are less impressed with direct flights as they are by the frequency of flights offered by a single airline and the connection opportunities on a single airline through a specific airport.

On the first count, both Cathay and United have an edge in Hong Kong over CO. On the second count, Cathay clearly has the advantage over both United and CO, since HK is its hub.

Now, let me explain why United and Cathay win on the first count.

CO is hoping their direct flight appeals to the time-sensitive traveler who wants to reduce the amount of time he or she spends traveling between New York and HK. Good enough. But, how attractive is that single flight a day to New York to the HK traveller if he or she does not intend to go to NY, but let's say the West Coast? Furthermore, how attractive is that flight if there is always the potential in the mind of that time-senstive traveller that he or she might be stuck in NY for a whole day if he or she should be unable to make the single return flight to Hong Kong? How attractive indeed if both UA and Cathay can still get him or her on the same day, and throughout the day, to HK from Los Angeles, San Francisco, or Vancouver, which he or she can reach from any point in the US via United or American (Cathay's alliance partner). (Note these considerations are as valid for the traveler originating in the US, especially from the West Coast, as they are for the traveler originating in HK.)

That brings us, of course, to the issue of connection opportunties. Though CO has worked out some deal with DragonAir, HK is still Cathay's hub. When Cathay begins non-stop flights to New York, it won't matter that it entered the market last, since it has a marketing edge with Chinese nationals and HK residents innured to its market dominance. When that happens, in fact, things will get much worse for the third player in this market, most likely Continental, not only because Cathay can leverage the connection opportunities it offers from HK to other parts of Asia on a single ticket, on a single fare, against the third player, but also because one assumes that Cathay will also offer this service with some type of cooperation with American (e.g., codeshare or frequent-flyer). Yes, American, one of CO chief competitors in the New York area, and a proven source of high-yield traffic in and out of the New York area.

In the long term, United can probably compete with Cathay in the HK market: First of all, because it has what some have called "brand recognition"; and second of all, because I foresee the HK Aviation Authority agreeing this year to some liberalized aviation agreement with the US that provides for code-sharing through HK. United with its Star Alliance partners has already planned to do so. American, of course, would codeshare with Cathay, China Eastern, and EVA through HK. For Cathay, codesharing with American would mean that it would have as big of a share of the O&D market in New York as it does in HK. The odd man out would be Continental.

Hence, I wouldn't be surprised to see Continental lobbying against a liberalized aviation agreement with HK on any terms, even if, and especially if, it allows for codesharing, because that would basically lock it out of the market, just as it was locked out of the Santiago, Chile market after the US government allowed AA to codeshare with Lan Chile. Mind you, when Continental pulled out of the Chile maket, it was by everyone's estimates the second largest US carrier in Latin America – mind you, bigger than United, which still flies to Santiago. Continental is nowhere near being that big, or having the brand recognition or marketing power that comes with that, in Asia.


User currently offlineSTT757 From United States of America, joined Mar 2000, 16860 posts, RR: 51
Reply 22, posted (13 years 6 months 1 day 1 hour ago) and read 2016 times:

A couple of things in CAL's favor are:

They are the largest carrier in the NYC area which when you inlcude Northern NJ,Southern Counties of NY and North Eastern PA encompasess over 20 Million+ people within an hours drive of EWR.

And yes this new flight is not conveinent to those West of the Mississippi,but two things to keep in mind are that:25% (a quarter) of the US population lives within 200 miles of NYC. And for all those who live West of the Mississipi,CAL and NW code share on each others flights. So CAL passengers can fly NW from say SFO,SEA,or LAX to HKG with a change in NRT.

The most important thing is to be the biggest airline in the biggest market,Hong Kong is a big City but it's not as large or as the NY tri-State area.

CAL has the largest piece of the NY tri-State area market and UAL has a small but lucrative piece,now throw in Cathy Pacific. They have no brand recongniton on the East coast,and no large corporate accounts like CAL does in the area.

CAL can feed their HKG departures easily from Washington DC,Philadelphia,Boston,or even as far as Florida. The EWR-HKG flight is scheduled so as to provide the best connections from other East coast cities.

So out of the three CAL,UAL,and Cathy CAL is the best positioned for success. Why? Biggest airline in the biggest market,best connections and feeder routes,and most logical aircraft utilization.

All they need are the new longer range 777s so they can increase their cargo capacity on the route.



Eastern Air lines flt # 701, EWR-MCO Boeing 757
User currently offlineToxtethogrady From United States of America, joined Dec 2000, 1289 posts, RR: 0
Reply 23, posted (13 years 6 months 1 day 1 hour ago) and read 2017 times:

Besides, United's still shaking off labor problems.

Eventually, though, CO will have to get to Hong Kong from Houston, but they'll need a little more range on the 777 to do it.


User currently offlineFlyua From United States of America, joined Mar 2001, 317 posts, RR: 6
Reply 24, posted (13 years 5 months 4 weeks 1 day 7 hours ago) and read 1975 times:

Hey, JetsetTX: I'll show respect when respect is due!

I am completely committed to my company -- United -- and love going to work everyday. The initial reason I chose to work for UA was the "glamour" (ha ha!) of working for the biggest global carrier, as well as the job security I hoped it would provide (yes, after this past summer, I have visions of Pan Am and Eastern!). The reason I love my job now, though, is the people with whom I work. They have such dedication and "heart!"

Over the past few years, though, I've watched with some envy as Continental's employees have turned around their company. When I interviewed with UA in 1995, a met a huge number of bitter, disillusioned CO people who had given up their seniority and (low!!) salaries to start over at UA. I really felt for them.... I hoped to never be in their shoes, and I was so happy not to be knocking on CO's door. NOW look at them! I remember talking recently with one CO Flight Attendant who had interviewed with and had been rejected by UA. I hope she's laughing all the way to Hong Kong on her 777!

"Republic's" posting of the press release quoting Gordon Bethune really got me mad. Whenever I hear your CEO speak, I get mad! Why? Because he ALWAYS tells it like it is. What can I say? Lately to those of us at United, the truth hurts. Nevertheless, I am confident that my colleagues and I will do whatever we can to see that United gives you at CO a run for your money. We may be down after our miserable summer, but we aren't out. Don't let down your guard and get too complacent at your Newark "Global Gateway!"

Cheers, "flyua."


User currently offlineNwa747-400 From United States of America, joined Sep 2000, 1337 posts, RR: 4
Reply 25, posted (13 years 5 months 4 weeks 1 day 7 hours ago) and read 1966 times:

Like Bethune said...UA is well known in HKG and that is exactly why people will try CO instead.

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