Air China Expands its U.S. Network – Services to Washington Starts in June; Houston becomes daily

by: Siva Vayali - March 26th, 2014   Filed under: Airlines, Airports 2 Comments

Air China (CA) has announced firm dates for its Beijing (PEK) – Washington Dulles (IAD) service. The airlines application has been approved by the U.S. Department of Transportation recently. The four-times weekly service will start on June 10, 2014 with Boeing 777-300 ER. In addition to the large O&D market offered by the Washington-Baltimore area, Air China would get ample connection opportunities using the route operated by its Star Alliance partner United Airlines (UA). A mid afternoon arrival at Washington is timed to connect passengers to destinations throughout the East Coast on United’s extensive route network from Dulles. United Airlines already operates a daily IAD-PEK service.

Houston service goes daily

Staring March 30, 2014, Air China will also increase its frequency on the Beijing – Houston (IAH) route from four times a week to daily. The expansion comes within eight months of launching the service to Houston, indicating strong demand.

Covering all bases

With these new and additional flights to Beijing, Air China will serve all Star Alliance hubs in North America, except Denver, either using its own metal or through an alliance partner.

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Together, Air China, United Airlines and Air Canada will command a 75% share in the important North America to Beijing market. With extensive route network from their hubs, the alliance can connect any two destinations between China and North America.

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Turkish Airlines Announces flights to Houston

by: Siva Vayali - June 19th, 2012   Filed under: Airlines, Airports Add Comment

Turkish Airlines (THY), one of the fastest growing airlines in the world, yesterday announced flights to Houston George Bush Intercontinental Airport (IAH) from its hub in Istanbul’s Atatürk International Airport (IST). Starting in April 2013, the airline will operate four services per week using Boeing 777 – 300 ER aircraft.

Houston is a logical expansion point for Turkish Airlines. The airlines is a member of Star Alliance and Houston is a major Star hub. Houston, being the energy capital of the United States, has strong business traffic and Turkish can tap that using its excellent connections to oil producing regions of Asia and the Gulf. It will compete head-to-head with other airlines operating in the region: Emirates and Qatar Airways (Turkish bills itself as more of an European carrier than a Middle Eastern one as its main base Istanbul is in Europe though the rest of the country lies in Asia).

Turkish Airlines already operates daily services to New York JFK (JFK), Washington Dulles (IAD), Chicago O’Hare (ORD), Los Angeles International (LAX) and Toronto Pearson International Airport (YYZ), the last four being major star hubs. By operating flights to all major Star hubs, Turkish can provide onward connections to almost all points in North America. By the way, United Airlines (UA) starts its Istanbul flight from Newark (EWR) hub on July 1, 2012. United will use a B767 – 300 on this route.

One thing is clear: US Flyers will have more options to travel to one of the fast growing economies in the world and beyond.

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Win for Southwest and a setback for United Airlines – Houston Approves International Flights from Hobby

by: Siva Vayali - May 30th, 2012   Filed under: Airlines Add Comment

In a major win for Southwest Airlines (WN) and a setback for United Airlines (UA), Houston City Council today overwhelmingly approved to start international flights from Hobby Airport (HOU). Beginning 2015, Southwest plans to start flights to Mexico, the Caribbean and  South American destinations, pending regulatory approvals.

Southwest welcomed the decision saying that it would bring in additional jobs and millions of dollars in economic impact to the city. United Continental Holdings, the parent of United Airlines said that it is disappointed in the decision.

United contends that allowing international flights from a secondary airport like Hobby would drain passengers from the city’s main international gateway, George Bush Intercontinental Airport (IAH), which is also the biggest hub for the combined entity of United Airlines and Continental Airlines. United already indicated that if international flights are allowed out of Hobby,  it has to retrench 10 percent of the workforce in Houston, drop the proposed Houston – Auckland flight and put the $700 million improvement at IAH on hold.

As always, both airlines brought out studies to bolster their arguments. The Houston Airport System, part of City of Houston, manages both airports and already approved the decision.

There are supporting facts to both United and Southwest. United has invested heavily in IAH over the years, building a respectable route system to Caribbean, Mexico and South America. Southwest would bring down the pricing power in the market, there by reducing United’s operating margins. United maintains its Latin American hub in IAH and does not want to jeopardize its growth (even though much smaller scale than the massive American Airlines (AA) hub in Miami (MIA)).

Southwest argument of additional revenue and passengers to the city also makes sense.

Eventually, United has to bring down its operating costs in line with that of Southwest to make money on those routes. Otherwise, United would end up losing the battle to Southwest as most travelers on these route are price conscious.

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American Airlines plans to firm up Qantas ties – A response to Delta’s tie-up with Virgin Australia?

by: Siva Vayali - May 16th, 2011   Filed under: Airlines, Airports Add Comment

American Airlines and Qantas today announced their intention to form a Joint Business Agreement on their services between the United States and Australia/New Zealand, within these regions and beyond to third countries. The irony is that American Airlines does not operate to Australia/New Zealand. So, this is not a revenue sharing agreement since AA does not generate anything.

Qantas B747 - Courtesy: Qantas

Qantas B747 - Courtesy: Qantas

American and Qantas are part of the Oneworld alliance and already place each others code on their respective schedules. So, what does this agreement bring to the table? The main reason behind this tie-up is the shift of Qantas’ services from San Francisco International Airport, where it has virtually no connection feed, to Dallas/Fort Worth International Airport, where American operates its biggest hub.

The idea makes sense on many fronts: Qantas had virtually no connecting traffic from San Francisco. It had to compete with United, which operates a major trans-pacific hub there with lots of feed from throughout the US and Canada. Shifting the route to DFW makes sense as it opens up the entire US and Canada to Qantas through American’s extensive network. This also gives Qantas a nice way to balance the US flights between a West Coast (Los Angeles) and a Midwest (Dallas/Fort Worth) destination offering better connections. For American, which does not have an aircraft that can stretch the DFW – Australia route nonstop, it offers a nice compromise by placing its code on Qantas’ Australian and New Zealand destinations. Qantas will operate only four services a week and hence it is a decent start. American might consider operating its own metal on this route (or from Chicago?) when it gets B787 dreamliner (expected in 2014).

It is interesting to note that this proposal comes in the wake of Delta Air Lines and Virgin Australia gaining approval from the US Department of Transportation for their alliance. Delta, which is expanding its presence in Los Angeles, already operates the Los Angeles – Sydney route. V Australia, which is the international arm of Virgin Australia, operates flights from Los Angeles to Sydney, Melbourne and Brisbane with connections throughout Australia and New Zealand.

So the competition in the US – Australia air service market is heating up. Qantas and United Airlines are the largest operators in this sector with Delta trying to gain some market share. With the Joint Business Agreement with American Airlines, Qantas, which is the largest player in the sector, is trying to protect its turf. United Airlines, the second biggest player in the sector, has Air New Zealand as the Star Alliance partner. United also has plans to start the Houston – Auckland route when it gets the B787. With Delta, finally getting approval for its alliance with a re-invigorated Virgin Australia, the battle lines are drawn.

Let the games begin!!!

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