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Thursday, 10 September, 2020, 10 : 30 AM [IST]

India, Africa & Hawaii on United Airlines’ radar for expansion in 2021

United Airlines is setting its sights on Africa and India, regions that have long been minor players in its network as it tries to expand as profitably as possible during the coronavirus pandemic, Leslie Josephs reports in CNBC.

The Chicago-based airline on Wednesday said next spring it will launch three weekly nonstop flights from Washington Dulles International Airport to Accra, Ghana, and Lagos, Nigeria, a bid for travellers visiting friends and family. It had discontinued a Houston-to-Lagos route, at the time its only Africa flight, in 2016 in the wake of the oil bust. United will also add a daily nonstop flight from Newark, New Jersey, to Johannesburg, adding to the South Africa service it launched with a Cape Town flight last December as it chases leisure travellers.

“We are looking to places where we have low share that has more upside for the future United and our travellers,” Andrew Nocella, Chief Commercial Officer, United Airlines said in an interview. 

The airline is also planning to add daily service to Bengaluru, India, from San Francisco next summer, a move that aims to capture business travellers between the two major tech hubs. That sets it up for a battle with American Airlines, which is planning to launch a flight from Seattle to Bangalore this winter. United will also add daily nonstop flights between Chicago and New Delhi late this year.

“Benglauru has been one of the most requested destinations at United over the last few years,” said Nocella, adding that United could expand service beyond a once-daily flight there later on.

The new flights’ success hinges on how the pandemic develops and a web of travel advisories and restrictions. Dozens of countries remain off limits for U.S. citizens, including most of Europe. 

“We all know that Covid will some day come to an end and we know that borders will reopen, so we’re looking toward the future,” Nocella said. “This is the time to do it.”

The pandemic has quickly remade airlines’ networks and reshaped traveller behaviour. United and its rivals that enjoyed robust international networks before the pandemic have focused more of their service within the U.S. In October 2019, international flights accounted for 44% of United’s capacity and that share will drop to 35% this October, a spokesman said.

As part of that domestic push, United will add more service to Hawaii with nonstop flights between Chicago to Kona and between Newark and Maui next summer.

Another major change in consumer behaviour is that travellers are booking closer to departure, Nocella said. “We think the vast majority of travellers are waiting a bit longer” to make holiday reservations “but we expect them to be strong.”

And facing a dearth of business travel, United’s customers are skewing younger than before the pandemic, he added.

Earlier Wednesday, United said its capacity in the third quarter of 2020 would likely be down 70% from last year, slightly more than the 65% decline it previously forecast.  United expects its third-quarter passenger revenue to be 85% lower compared with 2019, worse than a previous estimate of an 83% drop.

CEO Scott Kirby has said he expects demand to plateau at 50% of 2019 levels until there is a coronavirus vaccine. (Source: CNBC)

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