Aviation, tourism and energy writer for the Business Herald

United Airlines has high-end hopes

United Airlines wants to tap into the high-end leisure market on its San Francisco-Auckland route which it hopes could be one of the most successful in its network.

The airline has returned to New Zealand after a gap of 13 years and is using Boeing 787 Dreamliner which offers lie-flat seats in its 36-passenger business-class cabin.

United's senior vice-president of worldwide sales, Dave Hilfman, said business class bookings were important for any carrier.

"This market is quite famous for high-value leisure travel - you have people who have high discretionary income on both sides of the Pacific and people will pay for luxury," he said after the arrival of the inaugural service yesterday.

"We're delighted that we've seen that market stimulated. Candidly I think we have more to do there."

United profit margins are lower than rival US carriers but last month the airline unveiled plans to find US$3.1 billion ($4.3 billion) in savings and extra revenue during the next two years.

It has a revenue-sharing joint venture with Air New Zealand which has for the past four years had to itself direct flying between this country and the mainland US.

Rival carrier and Qantas ally American Airlines started flying the Auckland-Los Angeles route last week, services it launched with promotional fares of less than $800 return.

United has not marketed low fares, although Hilfman said there would be promotional pricing when required.

"I think every airline has to make its own decision. You look at the marketplace and see where you want to be competitive," he said.

"We watch what our competitors do and evaluate it from the New Zealand point of sale and the US point of sale then set our pricing based on what we think is going to be attractive to the consumer and positive from an economic point of view for us."

Dave Hilfman says the New Zealand market is famous for high-end leisure travel.
Dave Hilfman says the New Zealand market is famous for high-end leisure travel.

In addition to United and American Airlines starting flying across the Pacific, Air NZ has also expanded its operations into the United States, launching services to Houston last year. Fiji Airways had also started twice-weekly services to San Francisco via Nadi.

Auckland Airport chief executive Adrian Littlewood says despite the capacity increases it is estimated the US market is 30 per cent underserved.

Up to 30 million Americans were considering New Zealand as a destination for a holiday, he said.

There was plenty of opportunity for the route to grow and expand in the future, said Littlewood.

Hilfman said ticket prices, product and advertising and marketing needed to be right to succeed in a competitive environment.

Under anti-trust immunity United and Air NZ were able to share commercial strategies.

"When you have these joint ventures you get the opportunity to discuss price, scheduling - what keeps everyone on their toes is competition from many other good carriers.

"We need to stay very focused on what they're doing and because of additional capacity brought in that makes us have to be competitive."

Hilfman said bookings so far had met expectations.

"We have extremely high hopes that this will be one of our most successful markets over the long haul."

The airline is flying three times a week until the end of October, when it will move up to daily services. Aircraft types on the route would also be reviewed.

United last flew to Auckland in 2003 but pulled out of NZ amid financial woes which hit the US airline industry hard after the 2001 terror attacks.

United Airlines

5000 flights a day to 336 airports in six continents

1.5 million flights a year carrying 140 million passengers

86,000 staff

- NZ Herald

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