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TheStreet Open House

For United and the Boeing 787, Chengdu Is Just the Start in China

Stocks in this article: APPLBALCCDALUAL

SAN FRANCISCO ( TheStreet) -- A planned route from San Francisco to Chengdu, the fourth biggest city in China, shows that United (UAL) may be getting its act together for what could be unprecedented international expansion.

The world's biggest airline has paid a price for a bungled merger with Continental and for being early to take delivery of the Boeing (BA) 787, which arrived late and then was grounded for three months by the Federal Aviation Administration. Merger mess-ups caused some passengers to defect to Delta (DAL).

But now, it is the planned merger between American (AAMRQ) and US Airways (LCC) that faces problems, starting with the opposition of the Department of Justice, which will delay it and could prevent it. The 787 grounding ended in April and airlines are announcing the sort of ambitious new routes that embody the dream in Dreamliner -- the chance to open global markets that cannot initially be served with predecessor aircraft.

Perhaps no 787 route is more ambitious than Chengdu, which has never before had non-stop flights to the U.S. Last week, United applied to the U.S. Department of Transportation to fly 216-seat Boeing 787-8 thrice weekly between San Francisco and Chengdu starting in June 2014.

"Mergers can be distracting and we're happy to be mostly through ours," said Brian Znotins, United's vice president of network, in an interview. Additionally, he said, "Our 787s are up and flying, and this route is enabled by this airplane." Previously, only bigger airplane had sufficient range for the flight, but they provided too much capacity for a new route. The 787-8 has a range of 7,650 to 8,200 miles; SFO-CTU is about 7,000 miles, a 14-hour flight.

China offers many possibilities, Znotins said, and United is just getting started. "We're looking deep into China, looking at what the next best destination in China is," he said. "China is full of cities of 6 to 10 million people. With this airplane, we can be a first mover." Delta's 787 order has been deferred to 2020, while deliveries to American are scheduled to begin next year.

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