United Pushes for U.S. Dominance, Expands Routes as Travel Demand Soars
United Airlines entered 2022 with the goal of making its biggest-ever transatlantic expansion in effort to establish the airline as the dominant U.S. carrier.
In a sizable bet that transatlantic leisure travel rebounds by summer, United has revived daily flights to Japan, Germany and Switzerland — which were interrupted by the pandemic — and rolled out non-stop service to underserved destinations in Europe, India and the Middle East.
United aspires to be known as America’s flag carrier, an unofficial designation given to national standard bearers like British Airways, Air France and Air China, said Scott Kirby, United’s CEO.
“Our international long haul wide-body fleet is almost as big as all of the other U.S. airlines’ (wide-body fleets) combined,” Kirby said in a recent earnings call. “We fly to places that no one else flies.”
In fact, United plans to fly eight of the 10 longest routes this year operated by U.S. airlines, assuming the COVID-19 and subsequent travel restrictions allow.
United began adding long-haul routes in October, just as the world again clamped down on tourism to counter the delta variant and a month before the fast-spreading omicron variant disrupted holiday travel.
United, which uses Newark Liberty International Airport as one its seven continental hubs, has placed an emphasis on leisure travel at a time lucrative business-class ticket sales still lag well behind pre-pandemic levels.
There is evidence of pent up vacation travel demand in new data from Google, which reports a sharp increase in online searches for overseas flights and travel packages, with adventure journeys leading the way.
TUI Group, the vacation package giant, told Aviation Week bookings to the United Kingdom soared almost immediately after Britain authorities this month scaled back coronavirus testing requirements for travelers.
United has increased flights from U.S. gateways to European cities, including Berlin, Dublin, Rome, Munich, and Milan. It also revived a total of seven international routes that were suspended when the pandemic hit.
This month, United resumed direct non-stop service from San Francisco to Singapore, which is the airline’s longest route by distance.
The Singapore flight’s top mileage status will cease in March, when United adds even longer flights from Houston to Sydney and San Francisco to Bangalore, India, the latter reaching 7,500 nautical miles. The service connects Silicon Valley with the technology capital of India, home to multinational tech companies with a presence in both cities.
United had planned to launch the Bangalore route in 2021, but was delayed by the pandemic.
COVID-19 has caused wild swings in travel for the better part of a year as both travelers and airlines make last-minute decisions about travel.
United last week announced it was forced to cut flights after 3,000 workers – about 4% of its workforce – are currently positive for COVID-19. Kirby said Tuesday in a memo to employees that none of the workers died.
“Just as an example, in one day alone at Newark, nearly one-third of our workforce called out sick,” Kirby said in the memo.
To mitigate the staffing issues, United last month began offering its pilots triple pay through the end of this month.
Even so, Wall Street investors appear to remain optimistic of a travel rebound in 2022.
Analysts at MKM Partners are especially bullish, predicting in an investor note last week that U.S. airline industry capacity this year will reach 2019 levels thanks to growing demand for international travel.
Shares of United and other major air carriers – American Airlines, Delta, JetBlue and Southwest – all had modest rallies last week even though 2,300 flights were canceled on Monday, according to flight-tracking website FlightAware.
United reports fourth-quarter and full-year 2021 earnings Wednesday. The airline reported lower than expected earning last quarter and Wall Street analysts expect it to take a coronavirus hit in the fourth-quarter.
United has said it expects sales for the last three months of 2021 would be down 25% to 30% from the same period two years ago.
More than 13,000 flight cancellations between Christmas Eve and New Year’s Day, rising fuel prices and virus-induced staffing shortages are expected to hurt the airline industry’s bottom line at the end of 2021.
Until omicron’s onset, however, United assumed that a rebound in travel demand and increased revenue from international traffic would help the company return a profit in 2022.
George E. Jordan writes a weekly column on business and development in New Jersey. He may be reached at [email protected].
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