28 | TRAVEL PROCUREMENT | AUGUST 2016 www.businesstravelnews.com/procurement
United’s Transpacific Plans
United Airlines began direct service between San Francisco and Singapore in June, re- starting the first nonstop flights between North America and Singapore since Singapore Airlines discontinued its U.S. flights in 2013. The
new route is part of United’s expansion in transpacific
service from its San Francisco hub, vice president of
Atlantic and Pacific sales Marcel Fuchs told Travel Procurement in Singapore following that inaugural flight.
Travel Procurement: What are United’s immediate
plans for expansion from San Francisco?
Fuchs: This is the third of five inaugurals this summer out of
San Francisco. We started with Tel Aviv. We’ve flown that
for two months and made the decision to go daily. It’s had
a terrific start and combines the two tech cities—Tel Aviv,
which is strong in the IT sector, with Silicon Valley. We
added Xi’an [in central China] earlier in May, which was
really exciting to fly. We already had started Chengdu [in
southwestern China] in May 2014. Now, we’re on our third
with Singapore, and we’ll do Auckland [New Zealand] July
1 and Hangzhou [along the East China Sea] on July 13. All
of these five show the importance of our San Francisco hub.
It’s our 12th [transpacific] route out of San Francisco, and
seven of the 12 are on the Dreamliner, which shows you the
workhorse the 787 has become. It’s a phenomenal airplane
for us, and we’ve never been able to do that before. With the
mix in terms of 48 BusinessFirst [seats], 204 Economy and
an Economy Plus section with 88, it’s the right size airplane.
Is overcapacity on these routes a concern?
With the Singapore market, we’re actually not adding
capacity. We’ve been flying [there through] Hong Kong
and Tokyo for many years. We’re simply switching over
one of the two one-stops. The market acceptance has been
phenomenal, and we’re really excited about the growth in
San Francisco. Many of the corporate clients have told us
it’s the most-wanted next nonstop they had on the wish
list from us. After years of planning, we get to do it. We
are really excited about that portfolio.
Do you expect your marketshare will increase?
There’s no reason why Singapore nonstop shouldn’t perform on the same level as other transpacific flights. About a
third of the bookings come from Singapore—it’s a relatively
small market—and two-thirds are coming from the U.S.
There are about 750 [American Chamber of Commerce]
members here, which is a pretty good size, and about 3,500
American companies are registered in Singapore and many
have regional offices here, as well. I’m very confident this
market will do well, shaving off at least four hours and pro-
viding about 36 new one-stop cities.
Did United add the other new destinations you
mentioned with corporate travel in mind?
Less so. The magic is the right mix. Xi’an is a more leisure-focused destination. Hangzhou: We expect a stronger corporate sector, and it complements nicely what we do out of
Shanghai. Auckland is a tourist market, but of course it has
some corporate segments, as well. We’ve recently announced
the joint venture with Air New Zealand, starting July 1.
They fly to Houston, which complements our offering and
will help us quickly get market entry. We recently cemented
our relationship with Air China, deepened it, and signed a
multiyear agreement. At this point of time, it’s codesharing
and frequent-flyer [reciprocation] and many of the customer-facing portions. Together, we are well positioned to capture
the alliance marketshare. Chinese carriers have been growing
more than the U.S. carriers, mostly because U.S. carriers have
maxed out the Tier One cities. There are also access issues,
and we’re working to try to resolve that.
Are low-cost carriers becoming more of a factor?
We’re seeing a very strong entry from carriers like Norwegian on the transatlantic portion. Transpacific: Frankly, we
haven’t seen that infiltration in terms that corporate business would be impacted. Transpacific is already a super-competitive market, and more Chinese carriers are flying it.
So how does Tokyo fit into your strategy, considering you pulled the Tokyo-Singapore connection?
We initially had service beyond Tokyo to Singapore, to
Bangkok, to Manila and to Jakarta, for which we can now
effectively use ANA. If you look at the figures we used to
carry, we’ve doubled that on ANA. Even so, Tokyo will
remain important for us, just with the fact that we’ll more
often use the ANA relationship. We still have some, like
Incheon in Seoul [South Korea], which we do in addition
to the nonstop because the demand is so big.