spin88

I was think the same thing.... I have run the fuel burn numbers, and it costs about 1.5x as much in fuel per seat mile to run a ULH fight (7500sm+) as it does a flight of 5000sm. Although the B789/A359 are great A/C even with their better fuel burn those last 2000miles are really expensive to add. Further higher fuel costs really ramp up for some A/C (such as the 772/77W) which are currently running some flights at the edge of their range. See e.g. AA's 8119sm DFW-HKG flight.

If oil stays at 70+ vs the 45-50 it has been, a lot of longer routes will start to run in the red CASM wise. This would be particularly so for the J-light routes we are talking (vs say SIN or HKG)

I think its a combo of total international traffic and O/D traffic and how much paid J/F traffic there is. SFO can support flights from a huge number of airports, just on O/D, that say ATL or DFW or IAH can't. Really only five American cities (NYC, ORD, SFO, LAX, and now to some extent SEA - because it is 400 or 800 miles closer to asia than SFO/LAX) can support a large number of non-hub airline international flights. Frankly, with the film industry, finance, and some corporate HQ's, my guess is that BOM has more paid J traffic than does say DEL. DEL is served only because its the state carrier, and its the capital/hub for IA, and it is closer to SFO than is BOM (or BLR).

NYTA

Don't forget the amount of international business/tourism is key. Amsterdam has a population of less than 3m people, but the Dutch domestic market is so small that much business with Dutch companies is international, vs. larger countries where a much higher percentage of the business is domestic (Germany, for example). Hence the existence of KLM and their huge international network. I don't know much about the Indian market but suspect that there's a high percentage of demand from domestic business. Israel has such a small domestic market that a lot of business is cross border and a lot of Israelis vacation abroad since the domestic tourism market is expensive (it's almost always cheaper to fly to Greece for vacation than to drive to Eilat). Furthermore, Since Tel Aviv is the primary international airport in Israel (95%+ of all international flights) you need to include the population of the entire country (approaching 9m) rather than just the Tel Aviv metro area.

Lastly, you need to take GDP per capita into account - the GDP per capita for Israel (TLV) is $37,263 vs. for India where it's $1,709

katan

Which also goes towards the MNL suggestion I had above. A massive metro area, 4-6th largest in the world how you measure. But the GDP for those there is fairly low, reducing their purchasing power, especially for those awesome business tickets we think drives profitability. Lastly, if you know anything about Philippine immigration, you aren't exactly free to leave their country when you want to. You have to prove your "ability" to travel.

Also like the TLV example, CRK and MNL drive most of the population's ability to travel internationally. You almost have to look at the entire market, with the exception of CEB. And CEB is small and more tourism driven.

Kacee

If you do that in Asia, the number of places that will qualify is extremely limited and all are already served (Singapore, Hong Kong, Taipei, Seoul, Japan).

laxmillenial

spin88

China has a lower average GDP ($6900/person in 2016) but that masks major regional differences, just like we have in the US (.e.g. the per capita income in SF is $49,890; its is $18,100 in Alabama). Just looking at disposable income (https://www.stlouisfed.org/on-the-ec...tandards-china ) PEK/PVG have about 50,000y/per person in disposable income (that is roughly $7900/per capita); while the basically the rest of the Country has less than 20,000y/per capita. E.g. Xian, where UA's service pancaked, is in Shaanxi province, which has a per capital disposable income of around 17,000y ($2600/per capita). My guess is that the variation is even greater than these numbers given the propensity of the Chinese to fake economic numbers.

My point is that there are regions and cities in counties that are not as wealthy, that have larger middle/upper middle classes and substantial numbers of very wealthy people. KUL may get there, BKK was on the way there, but the country has stalled out due to bad governance/social unrest, DEL/BOM and probably now BLR are already there. MNL & SGN are nowhere close.

I have my strong doubts about how the US carriers will be able to compete long term with sub-standard hard and soft product and bad reputations for service against Asian carriers that often times have lower wage rates, but it seems that ULR flights w/o enough J demand (and with BKK an incumbent carrier with a better reputation for service) is not the way to do it.

I - in large part because the very different level of income - called both the Xian and Hangzough flights as flights that would not last. See e.g. https://www.flyertalk.com/forum/25478610-post78.html I took a fair amount of grief for this view (and I'm sure I deserve all the grief I get. ) with the counter argument being that well, UA knows what it is doing. My rearview mirror take is that UA's old Jeff-centric management had no clue what it was doing.

I am inclined to think that Kirby - which I sharply disagree with his views re service/product quality, and think he is stuck in the ULCC mindset of charging for water - does understand and can require real modeling of competitive posture and how it impacts demand. I doubt, particularly with higher fuel prices, that we see any more SFO, let along LAX to Asia ULR flights.

DA201

If oil stays at 70, these routes should be okay. It's when they start to creep towards 90/100 per barrel that problems arise. I am not sure how high oil will rise, but I don't think it will go up too much like it did 10 years ago because OPEC just doesn't have the power it once had.

I would take out SEA and replace it with IAD. MCO & MIA/FLL can support a large number of non-hub international flights as well if the planes are configured with a lot of E seats. You are spot on with DEL's advantage. It's geography/hub/capital are the reason for DEL-SFO instead of BOM-SFO.

Exactly my point regarding geography. When the domestic market is very small, international destinations are more appealing. AMS/TLV passengers are much more likely to be traveling abroad compared to SFO passengers. And of course there are plenty of factors missing. If route planning was a simply equation with a few variables, airlines would have a much easier time determining what routes to fly.

Kacee

I would tend to agree. My guess would be that UA was primarily focused on US based demand from its existing corporate customers.

PsiFighter37

I thought it might have to do with subsidies being provided from the Chinese side as well (more for SFO-XIY...SFO-HGH, in hindsight, seemed more like a placeholder until they got the second SFO-PVG slot).

spin88

I don't think SFO-SIN will go away, but I do think that oil at 70 vs 50 makes a BIG difference in the willingness to add ULH routes to cities outside of those (TYO, PVG, HKG, SIN, to a lesser degree PEK and ICN) with very high premium demand.

I might further add, that the US3 are at a real disadvantage in most asia markets as the US airports are not really set up for transit. For example, there is a lot of Asia to SA traffic, and visa versa, but a lot of it goes via Europe/ME and some via Australia and NZ. For those with a US visa, its not an issue, but you can't simply transit the US airports in the same way you can most overseas. I would think that UA would be interested in something like SFO-GRU (6472 miles) or SFO-SCL (5918 miles) over these ULR flights to Asia.

Re IAD unlike SFO/LAX/SEA - all of which get substantal traffic to both Asia and Europe and also to TLV, IAD has few flights to Asia. The US flag carriers certainly don't fly those routes. Same with MIA. Its a huge base for AA, but only for SA. MCO is just a tourist spot,and it does not support even a flight to NRT.

PsiFighter37

UA seems pretty committed to making IAH their Latin American hub...but having SFO-South America, or more routes out of EWR (EWR-SCL would be an obvious one, IMO) would be nice. Perhaps they need connecting traffic from the coasts to support IAH-South America...?

spin88

While I agree that is UA's plan (vs AA's which has been to adding flights on its own E.g. LAX-GRU on AA, LIM/SCL on partners) UA can't serve most of Asia from IAH, so it becomes two stop on UA (xxx-IAH-SFO-xxx) which is not competitive.

There may just be two little O/D traffic for these routes (LAX pulls from an area roughly twice the size of SFO) and that may counter-balance that LAX is another 350 miles from Asia, but the UA stratagy is different than AA's as to Asia-SA traffic.

adambrau

If you think DEL is out of the game with little high paid corporate traffic, Google the city of GURGAON. It was basically set up GE and hosts many large US companies for outsourcing. The suburb of Delhi, which boarders the Indira Gandhi Int'l Airport, is teaming with foreign expats. So I would say DEL is a great candidate for a new SFO nonstop.

laxmillenial

Aussienarelle

I find it interesting that all these international airlines have non-stop flights from SAN: AC, BA, WK (Edelweiss), JL and LH. I do fly these airlines as a non-stop is very attractive and they do not seem to have an issue filling up the planes. So if SEA is being considered for new routes, then hopefully UA will also consider SAN (speaking as someone who flies from SAN)