FlyerTalk Forums - View Single Post - 2nd daily UA IAH-NRT? (UA back to 1 flight Jan-31-15, ANA Starting 77W in June 2015)
Old Jun 3, 14, 3:34 pm
  #13  
spin88
 
Join Date: Feb 2008
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Originally Posted by EWR764 View Post
It's hard to make that comparison because UA SFO-NRT service is 744 and IAH-NRT is 772. The 777 will have considerably less fuel burn but slightly higher CASM owing to its smaller number of seats. However, I would have to believe a 772 on a 5767nm sector is probably approaching the CASM of a 744 on a 4447nm sector because CASM tends to decrease as you increase LOH. The factor that often won't increase commensurately is RASM over a longer haul unless you're discussing a city pair with a significant revenue premium for a nonstop service (IAH may have it).

With respect to your argument about IAH shunting flow over ORD/SFO, well, if that were the case, it would be a failing of UA's RM system to allocate traffic to its most profitable routing. I certainly wouldn't put it past UA's crack IT team, though!

What you're missing with the second IAH-NRT is that it is more competitively-timed to capture deep South America transit traffic that already has to pass through customs enroute whether it be at JFK, IAH, LAX, or DFW. The new flight may drive more lucrative new business to UA as NRT transit at now no longer requires lengthy layovers. I think this route is about driving more traffic in the SE/Florida/Latin America to NRT over IAH as it is a growing market, rather than an attempt to reallocate existing flow.
United currently runs either 747x2 or 747 and 772 ex-SFO. Its seasonal, but will become only one plane (I assume a 744) once HND starts. Flying a 744 is a better CASM than 772x2, and the question is not really what AC UAL flies, but what routings it puts those A/C on.

If, United has enough traffic to fill 772x2 from IAH with (a) O/D traffic and (2) traffic connecting on to central/south america, then adding a flight with higher CASM makes sense as they can get a yield premium. My point is that to fill the second plane, they need to discount those flights (or price them the same as ex-SFO). Running a couple of quick searches of places that have connection to SFO/LAX (both shower lower CASM flights) and also DEN/ORD (longer, but still shorter than ex-IAH) I get the same fares, or actually cheaper fares ex-IAH over the next few months. That said that United is allowing traffic to flow to the high CASM ex-IAH flight, or pushing it there with a slightly cheaper price.

That suggests that to me(at least at this point) the flight is not a flight that will increase yield overall.

That said, if they get more for the BF seats than from other gateways, it may make it all make sense.
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