NEW YORK (TheStreet) -- United (UAL - Get Report) may have its problems but it also has some unique assets -- including the best West Coast hub and the most Boeing (BA - Get Report) 787s of any U.S. carrier -- and it is putting them together.

United said Thursday that next year it will add 787 flights from San Francisco to three new destinations --- Auckland, New Zealand; Tel Aviv, Israel; and Xi'an, China.

The Xi'an route is the first ever between mainland U.S. and a northwest China city with an area population of 8.5 million. It underscores the success of the SFO-Chengdu route that United opened last year.

The Tel Aviv announcement comes weeks after American (AAL) announced plans to cancel its Philadelphia-Tel Aviv route, its only Israel service. And Auckland represents United's effort to boost service on a route already served by a partner.

Once the flights begin, San Francisco will become the biggest 787 hub in the U.S., with 787 Dreamliner service to nine cities, also including Chengdu, Houston, Osaka, Shanghai (pending government approval), Taipei and Tokyo Haneda.

On some routes, like SFO to Chengdu and Xi'an, the 787 is probably the only aircraft that makes sense. They are new routes to distant destinations where it takes time to build traffic. Before the 787, only planes with too much capacity for the routes could fly them, because they were the only planes that could carry enough fuel.

On other routes, while United could use a Boeing 777, the 787 represents a revenue play because the aircraft itself continues to lure passengers with advantages including higher cabin pressure, higher humidity and reduced noise, which make flights such as the 14-hour Chengdu trip far less grueling, while technological improvements enable the airplane to fly higher, faster and more efficiently than predecessors.

United has aggregated 787s in San Francisco because the flights "are the longest stage length flights in our system and the airplane will benefit you the most where you fly the longest flights, which offer the greatest fuel burn savings, and also {because} the West Coast is really competitive, so we are offering our best airplane product on the most competitive routes," said Brian Znotins, United vice president of network.

SFO-Xi'an is scheduled to operate three times a week, in the summer only, starting May 8, 2016. The flight "is a reflection of our continued China strategy -- the growth of secondary points," Znotins said. "We're looking forward to other destinations. We have a demand model mapped out, (determining) when each of these cities of 6 to 10 million people is ready for service. 2016 is the right time for Xi'an."


SFO-Chengdu, which started on June 9, 2014, with thrice-weekly service, will operate daily this summer, then return to three times a week in the fall. For now, Xi'an is summer only; Znotins said the route has less business demand than Chengdu, and appeals more to visiting friends and relatives and to tourists drawn by the opportunity to view the famous 2,300-year-old Terracotta sculptures that were discovered in 1974.

SFO-Tel Aviv will have three weekly flights starting March 30, 2016. Znotins said both cities have large technology communities. "Over the last year we have heard more from the tech community in San Francisco about Tel Aviv than we have heard for any other service, and looking at the economics, we thought this would be right," he said.

Another advantage is that United "carries a lot of SFO origin and destination passengers to Tel Aviv over Newark," Znotins said. "Newark-Tel Aviv is pretty full, and we can fly SFO passengers nonstop and add capacity (on the Newark flight)," he said.

American said in August that it would cancel Philadelphia-Tel Aviv in January year due to continuing losses. That leaves United and Delta, which flies from John F. Kennedy International Airport, as the only U.S. carriers offering Israel service: an El Al LAX-Tel Aviv flight is the only West Coast non-stop.

SFO-Auckland will begin July 1, 2016, with three weekly flights and will expand to daily in October. "We've had success in Australia, we have a long-standing partnership with Air New Zealand and we wanted to strengthen it," Znotins said. "They have a great product (but) we believe there are passengers in the U.S. who like United and this way we can offer the best schedule by far."

Air New Zealand applauded the move. "The United States is New Zealand's third largest tourism source market, contributing almost a billion dollars to our economy in the past financial year," said CEO Christopher Luxon in a prepared statement.

"To have a partner carrier with a network like United Airlines promoting destination New Zealand and attracting visitors through its immense sales and distribution channels will provide a significant boost to inbound tourism," Luxon said.

United currently has 22 787s in its fleet and expects to take delivery of three more by the end of 2015. From San Francisco, the carrier operates about 280 daily flights to about 90 destinations.

 

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.