mcrw00

I'm skeptical that the coronavirus situation will have that much effect on UA's customer relationship efforts or stance toward its customers, either good or bad. This is because DL and AA will be facing roughly the same dropoff in loads and projected APAC revenue. You can certainly argue that UA will be somewhat harder hit than the others (especially AA) because of UA's heavier investment in China routes, but the fact remains that this is not a shock that's likely to send significant numbers of would-be UA pax to other carriers. For the most part, those pax just won't be traveling to China period. I don't have data to back this up, but intuitively I feel that since the loyalty program primarily exists to influence consumer behavior toward UA vs. DL/AA, something like this that shrinks the pool of available business for airlines across the board will have minimal effects.

That said, less business means less business, so I would not be surprised if certain inflight service items disappear around the margins.

311Hokie

I work for a Japanese company and frequently travel to Tokyo on business. I can confirm my company has stopped all travel to mainland China but has not closed travel to elsewhere in asia...yet.

Will be interesting to see how this unfolds over the next few weeks and months, especially with Tokyo olympics this summer.

JimInOhio

You’re right, a sizable amount of that TPAC traffic originates at a non- hub but we shouldn’t count that lost traffic twice. Whether it’s from DSM or ORD, it’s still one passenger making one trip.

Also, there’s the relative importance angle, too. Sure, flights to China are very important but they are a very small percentage of what UA/UAX puts up in the air each day.

spartacusmcfly

I think this is right. For example, immediately replace the 789s with 77Ws if they'll reach on SFO-DEL. That'll pull business from Air India xSFO.

I also agree with the sentiment that Kirby needs to grab a screwdriver to help accelerate the 789 conversions. There is so much business to be taken from SQ, AI, etc...

jsloan

... You're saying that people prefer AI's 7-across J on the 777 to UA's 6-across on the 789? The only reason people are flying AI is price.

As for SQ -- I've flown the SQ 359, and I've flown the UA 789, and I prefer the seat on the 789 by a huge margin. The SQ 359 seat is the least comfortable lie-flat business seat I've ever flown (in the lie-flat position, I mean). It's less comfortable than many angle-flat seats I've flown. People are not flying SQ because of the seat.

To answer the overall question, my answer is: nothing. I think nothing changes. Traffic to China was already softening -- they cut HGH and XIY, they dropped ORD-HKG and reduced frequency on EWR-HKG, etc. Growth in China has been slowing for a couple of years now, and UA has been reacting.

This isn't exactly peak travel season anyway. And, most of the trips that are being postponed now will eventually be made later.

spin88

I think we agree 110%. I think this is exactly what Delta did (focus on service/product rather than mileage redemption as the draw) but I also think they have kept the elite benefits worthwhile. I actually get upgraded periodically. The only real difference as to elite benefits is that United gives E+ at purchase to Gold, Delta only at PLT (and Delta gives free drinks in E+, while on UA you only get them if you are 1K+). Otherwise the benefits are very similar, with the exception of SDC, where UA is better.

As to redemption, UA used to be a lot better, Delta realized it had an issue, and has loosened up some (survey's like switch fly show this) meanwhile United has become next to impossible. It may be that I am SFO based, but Delta generally gives me more decent options, and at lower cost, than does UA.

I do think that what Delta has done has been a test of what better product and service will do. People are loyal to Delta not because Skymiles is so hot, but because the overall experience is better. MP used to make up for some of UA's issues, no longer does it counterbalance them, and if this and other threads are an indication, MP is now a competitive disadvantage with the new qualification rules and much higher reward costs even when there is limited availability.

xliioper

Delta raised summer TATL fares on Friday for many markets by $5 each way coach and $25 each way in business. The other carriers appear to have matched. Wonder if they are seeing increased demand from people who had planned to go to Asia for summer vacation and are changing to Europe instead.

Doppy

If United doesn't do something across the board, I wonder if they'll do some targeted promotions for historically China- or Asia-heavy elites. Even if on April 1 everything resumes as normal - both flights and travel - still a full quarter of travel will have been canceled or at least deferred.

At the increased qualification levels, 1/4 of the year's travel going to zero will mean a lot of people who might have re-qualified for whatever level will drop down, which isn't helpful for their loyalty going forward.

EWR764

Reallocate WB capacity to Latin/South America, Europe, seasonal markets and the domestic network to account for lost 737MAX capacity. When cleared, restart service in key slot-restricted markets with smaller equipment (EWR/SFO-PEK/PVG/HKG, 787s) and apply for dormancy where possible (ORD-PVG/PEK, SFO-PVG #2 , SFO-CTU). Roll back frequency on unrestricted routes like EWR-HKG, SFO-HKG #2. NRT might become more strategically important again as a connecting point to spool back to full-strength China service.

If China suspensions persist, this could be a great summer of domestic WB flying.

narvik

Wouldn't it be better for UA to just park the WBs up for three to four months?

EWR764

Not necessarily. UA has already dialed back domestic growth plans because of the 737MAX grounding. A long-term drawdown of China service could allow UA to reallocate some widebodies back into the domestic network and free airframes to cover flying United would prefer to be doing, but for the unavailability of the MAX fleet, during the summer peak.

I'm not talking about high-frequency utilization, but deploying 777s on, say, a SFO-OGG turn, or a 787 on LAX-ORD, could free up a 737 or A320 and add capacity on key routes. Similarly, replacing a domestic 777 with an international WB on a route like EWR-SFO can enable (as an example) a EWR-MCO-ORD-MCO-EWR rotation for a 777, freeing up capacity.

It would also allow some redundancy to improve OTP and system reliability, which suffered in 2019 primarily because of increased utilization without the MAX.

HNLbasedFlyer

Agreed. Having just booked a HNL-SFO flight 21 days out without a single aisle available in E+ on a 777 there is room for uplift to Hawaii. There must be room for other routes also. I think United could see lots of upside to Hawaii at the expense of Southwest and Hawaiian.

uastarflyer

The new elite qualify scheme promotes short segment based accrual, not ULH travel. So they will just say fly your 54 segments like we told you. UA doesn’t really care if their elite ranks drop dramatically, as long as it isn’t due to poaching.

Bear96

I am sure we would all like to see that, but that doesn't seem to be UA's plan, given they are looking for F/As to volunteer to take a few months off and are taking other measure to reduce the number of hours per month crew are flying, as discussed upthread.

I imagine a few of the WBs used for China will be re-allocated as you say but I doubt it makes financial sense to keep all of them in use and see the resulting drop in yield the excess capacity will inevitably lead to.

J.Edward

My guess is the larger issue UA - and the industry in general - is facing is a massive drop off in demand. Customers not buying tickets at all is a more serious problem then customers buying tickets, just not buying them with UA. The latter issue may be able to be addressed by tweaking the loyalty program but the former cannot.

I think UA would prefer the demand to come back ASAP which in turn would justify the flights returning.

A better way to think of this may be "if the virus was cured today how long would it take demand for travel to rebound - and for every week it's not, how many more weeks/months will demand take to rebound once it is cured?"

Anyways it seems like people are forecasting more domestic widebodies, potentially better loyalty promos, and more distressed inventory (read: awards and upgrades) for the short-term?