This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

United Upgrades San Francisco Hub as Boeing 787 Chengdu Flight Looms

SAN FRANCISCO (TheStreet) -- The best Asian hub in the U.S. will get better next week, when United (UAL - Get Report) opens a new boarding area in its dedicated terminal at San Francisco International Airport, where one of the most ambitious efforts in recent U.S. aviation history -- a San Francisco to Chengdu flight -- will take off in five months.

At San Francisco, United operates the largest hub on the West Coast with nearly 300 daily departures, including eight daily non-stops to seven cities in Asia -- making it the largest single airline Asia hub in the U.S. -- as well as 260 daily departures to 70 domestic cities. This year, the carrier will begin service to two more Asian cities, Taipei and Chengdu, in March and June, respectively.

The Chengdu flight is a symbol of the vast possibilities ahead for U.S. commercial aviation, using the Boeing (BA - Get Report) 787, a new airplane with unique capabilities, serving a destination with no non-stop U.S. service, and taking advantage of a hub system that at its best aggregates passengers at levels that enable the opening of new air travel frontiers.

The boarding area improvements, which cost $138 million, will add a newly renovated Boarding Area E in Terminal 3, which is wholly dedicated to United flights. Boarding Area F has 21 gates; Boarding Area E, which will re-open on Jan. 28, will add 10 more. By May, United will have moved most of the operations it has in Terminal 1 to Terminal 3. The upgrade is part of a long-term $5 billion improvement project at SFO.

"The terminal and the new boarding area reinforce our commitment to the San Francisco market and to keeping SFO as the leading Pacific gateway in the U.S.," said Brian Znotins, United vice president for networks, in an interview.

Asian growth has been a focus of U.S. aviation for years, but the focus has intensified given two recent developments. The merger between US Airways and American (AAL) completed the post-deregulation consolidation into an industry with three global carriers, coinciding with three global alliances with three major European carriers.

Additionally, Delta (DAL) has begun a push to establish its Asia hub in Seattle, as the three carriers maneuver to stake out positions at the big three West Coast airports: LAX, SFO and Seattle. In this pursuit, United starts with a huge lead.

"If you take a clean sheet of paper and build hubs from scratch, and you want a Pacific gateway, it's hard to think of a better gateway than SFO," Znotins said. "It's geographically well-situated. It has a strong corporate presence, a lot of local travel, regional GDP growth and (multiple) demographic and economic factors" including a sizable Asian population."

Among the demographic advantages, he said, San Francisco leads all Western gateways in terms of its propensity for international travel. Each San Francisco resident makes 0.38 international trips annually; the rate in Los Angeles is two-thirds of that and the rate in Seattle is half of that.

In a sense, the competitive situation on the West Coast parallels the situation in the New York area. In both cases, United operates the best hub, although the carrier has been held back in recent years by repeated failures in its efforts to integrate United and Continental following a 2010 merger. Nearly every quarter since then, the airline has declared a turning point, but the hope has repeatedly dashed. United reported earnings on Thursday.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
BA $150.62 -1.40%
UAL $67.35 -1.20%
AAPL $125.04 -1.10%
FB $82.66 -0.64%
GOOG $551.68 -0.06%


DOW 17,861.84 -114.47 -0.64%
S&P 500 2,078.32 -7.92 -0.38%
NASDAQ 4,927.1470 -20.2940 -0.41%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs