United Airlines, Australia’s largest 787-9 year-round operator, uses new type to improve product and efficiency

5 April, 2017

United Airlines is maintaining its position as the largest 787-9 year-round operator in the Australia market despite expansion from Vietnam Airlines.

United has been using the 787-9 on all 21 of its weekly Australia flights for just over a year, following the Mar-2016 switch to 787-9s on the Los Angeles and San Francisco to Sydney routes. United has been deploying the 787-9 on its other Australia route – Los Angeles to Melbourne – since it was launched in Oct-2014.

Vietnam Airlines began deploying the 787-9 on its daily Ho Chi Minh to Melbourne and Sydney in late 2016. Vietnam Airlines launched three weekly 787-9 flights from Hanoi to Sydney on 29-Mar-2017, giving it 17 weekly flights to Australia – all with the 787-9. At the launch event in Sydney, Vietnam Airlines claimed it was the largest 787-9 international operator in Australia.

However, based on current schedules, United still has four more weekly 787-9 flights to Australia than Vietnam Airlines. Forward schedules show United plans to continue to maintain its current Australia schedule with 21 weekly 787-9 flights while Vietnam Airlines plans to maintain its newly enhanced Australia schedule of 17 weekly 787-9 flights.

United Airlines is maintaining its position as the largest 787-9 year-round operator in the Australia market despite expansion from Vietnam Airlines.

Air New Zealand during certain times of the year also operates more 787-9 flights to Australia than any other airline. Air New Zealand’s current schedule (for the week commencing 3-Apr-2017) has 28 weekly 787-9 flights to Australia, including 14 on Auckland-Sydney, nine on Auckland-Perth, two on Melbourne-Sydney, two on Christchurch-Perth and one on Rarotonga-Sydney.

However, several of these only operate during the peak Easter season. In May-2017, Air NZ reverts to 17 weekly 787-9 flights to Australia, including seven on Auckland-Sydney, six on Auckland-Perth, three on Melbourne-Sydney and one on Rarotonga-Sydney.

Scoot also has as many 787-9 flights to Australia as Vietnam Airlines during certain periods of the year. Scoot currently has nine weekly 787-9 flights and 14 weekly 787-8 flights to Australia however its Jul-2017 schedule includes 14 weekly 787-9 flights and nine weekly 787-8 flights.

Air New Zealand was the first airline to operate the 787-9 to Australia, launching 787-9 services from Auckland to Perth in Sep-2014. Air New Zealand was the 787-9 launch customer and Auckland-Perth was its first regular 787 route.

United became the second airline to operate the 787-9 to Australia in late Oct-2014, when it launched six weekly nonstop flights on the Los Angeles-Melbourne route. Los Angeles-Melbourne was United’s first regular 787-9 route. Scoot became the third airline to operate the 787-9 to Australia, in early 2015.

United added a seventh frequency on the Los Angeles-Melbourne route in Mar-2015, making it a daily service. For more than a decade, United served Melbourne as a tag from Sydney, offering a one-stop product from Melbourne to both Los Angeles and San Francisco. Prior to that it tagged Melbourne with Auckland.

In the Australian market, United has traditionally only operated nonstop flights from Los Angeles and San Francisco to Sydney. Both routes were operated for several years with 747-400s until late Mar-2014, when they were both down-gauged to 777-200s. In late Mar-2016 United began using the 787-9 on both routes, which is slightly smaller than the 777-200 but much more efficient.

Even with both its Sydney routes now using the 252-seat 787-9, United has slightly more capacity to Australia than it had when it was using the 374-seat 747-400. United’s three daily 787-9 flights generate 5,292 weekly one-way seats, a 0.5% increase compared to 5,236 weekly seats in early 2014 (when it last had two daily 747-400 flights). Its Sydney capacity is down 33% but this reduction is more than offset by the new nonstop capacity from Melbourne.

United Airlines one-way weekly capacity from Sydney: Sep-2011 to Sep-2017

Source: CAPA – Centre for Aviation & OAG

United’s share of the Australia-US market has declined due to expansion from Qantas and the late 2015 launch of services on the Los Angeles-Sydney route from American Airlines. However, United’s performance has likely improved due to the lower operating costs of the more efficient 787-9. The 787-9 also has enabled United to improve its product in the Australian market, particularly in Melbourne as nonstop services were introduced.

United’s 747-400 and 777-200 fleet are extremely outdated. United has been in the process of phasing out its ageing 747-400 fleet, which has an average age of more than 20 years, and plans to retire its last 747 by the end of 2017. The economy cabin of United’s 747-400 still has an ancient IFE system with overhead monitors rather than seatback screens.

United’s 777-200s have an average age of nearly 20 years. United was the launch customer of the original 777 and only operated the 777-200/777-200ER until Dec-2016, when it took delivery of its first 777-300ER. In future, United could potentially use the 777-300ER to up-gauge one or two of its Sydney routes from the 787-9. For now, United is using the 777-300ER on just one long haul route, San Francisco-Hong Kong, and has no plans to use the type to Australia.

In 2016, United carried 454,000 passengers to and from Australia with an average load factor of 83%, based on BITRE data. United’s Australia traffic has been relatively flat the last several years. However, its load factor has improved by 3.7ppts since 2013, the last full year it used the 747-400 on its Australia routes.

United Airlines annual passenger traffic to/from Australia and seat load factor: 2006 to 2016

Source: CAPA – Centre for Aviation and BITRE

United currently accounts for approximately a 14% share of Australia-US seat capacity compared to 47% for market leading Qantas, based on CAPA and OAG data. United is the second largest airline in the market, slightly ahead of Virgin Australia. Virgin Australia has a 13% share of Australia-US seat capacity, followed by Hawaiian with 8%, Jetstar with 7%, American with 6% and Delta with 5%. Hawaiian and Jetstar only link Australia with Honolulu while the other five competitors operate nonstop services to the continental US.