United's Transpacific Struggles
 

United is having real difficulty filling flights on many of its routes across the Pacific. Any insight why certain routes are doing so badly? 57% load factor on San Francisco-Sydney in Q1? 59% EWR-HND? 69% SFO-HND? 54% IAD-HND???

… because Q1 is traditionally the slowest travel period of the year?

A ton of capacity added to the markets this year. It will be adjusted.

Pacific travel continues to recover not as fast as UA anticipated and grew for? They were still up 44% in revenue vs. Q1 2023, but have grown their ASMs outpacing that demand. The YoY growth would still suggest they're on the right track even if they overshot capacity, especially when compared to EU/domestic YoY growth.
https://cimg4.ibsrv.net/gimg/www.fly...22d99342bf.png

Yet UA's load factors were still significantly lower than those of competitors.

Personally, I would enjoy that extra space while it lasts.

What's also interesting is that the flight cap on Chinese airlines' service to the U.S. is currently only a third of what it was pre-pandemic. If UA is struggling to fill aircraft now while not feeling the full competitive effect of mainland carriers in the transpacific market, what happens if/when the cap rises?

Did you just read the crankyflier article?

HND is a problem because the Japanese Yen is extremely weak so there is a lot less Japan originating traffic. Additionally, because it is slot controlled, there is no rationalization of capacity possible.

For the South Pacific, AA, DL, and UA all added significant amounts of capacity this past winter and all 3 have suffered. Delta previously planned for year round LAX-AKL and has already cut that to just winter seasonal. BNE has also been offering significant subsidies for international carriers and once that subsidy money dries up then you may see BNE routes getting cut as well.

UA's PVG load factor was at 76% which coupled with very high fares is not much cause for concern.

There's more to the story than load factors..but in terms of load factors, the more bullish the airline on TPAC recovery, the more their load factor took a hit. It's no surprise UA shows the worst load factor given they grew their capacity the most when the demand isn't fully there in TPAC markets yet, but they're also supplementing that growth with having both the largest cargo revenue among their competitors and continuing to grow their cargo operation more than competitors.

YoY
DL grew their pacific ASMs 36% for a 31% growth in passenger revenue and 2% decrease in yield.
AA grew their pacific ASMs 54% for a 47% growth in passenger revenue, and 6.5% decrease in yield, with a 4.7% decrease in load factor
UA grew their pacific ASMs 65.8% for a 44.3% growth in passenger revenue and 3.5% decrease in yield.

Of course the other piece of the story, UA grew their cargo revenue by 16.6% system wide (with multiple sources suggesting a large amount of their cargo activity is TPAC to justify these flights even with lower loads). DL decreased cargo revenue by 15%. AA increased cargo 14.7%.

I'm not thinking so much about travel beginning or ending in China as the competitive effect of Chinese airlines in terms of connecting traffic in East Asia and the larger region.

UA grew much more than its competitors on a larger base to start with. They will adjust capacity as they see fit. On the routes we fly, we are spending about 1.5 time what we were spending per pax in 2019. LFs are only a part of the equation.

Right or wrong, the cap is not going to rise. DL is already rolling back plans to restart LAX-PVG further increasing the number of flights any US airline could apply for since the US is not at its cap. An increase in the cap would benefit Chinese airlines much more since they have not fully deployed their WB fleets since the pandemic. I am not defending them, but realistically, why would DOT do that?

There are very good reasons not to select United if you have a choice.

...hence the 100% upgrade success.

Enjoy it while it lasts indeed!

UA management has not raised transpacific being an issue and I am certain analysts and institutional investors will be all over it if it becomes an issue.

Things may change, but UA is still predicting meeting earning and operational projections for the rest of the year.

Others have pointed out in another thread that cargo is doing well on transpac routes.

As a consumer, it does not concern me or I worry for UA. I just fly.