Boeing 787 Plus United SFO Hub Creates New Frontiers in Asia, Study Says
United Boeing 787-9

Editors' Pick: Originally published March 21.

United Airlines' (UAL) intent to start San Francisco-Singapore service June 1 with a Boeing  (BA) 787-9 is an important symbol of a new frontier in aviation, one where new airplanes will enable longer flights that will bypass Tokyo Narita, according to a new survey by OAG Aviation.

"The continued introduction of the Boeing 787 and the Airbus A350 will revolutionize long-haul travel and the sectors flown by major airlines around the world," said John Grant, the OAG senior analyst who compiled the study.

"The aircraft allow longer services that will allow thinner routes that will bypass existing major hubs around the globe."

United and Boeing are ahead of the curve, he said, because United substantially leads its U.S. competitors in building U.S.-Asia traffic and Boeing substantially leads Airbus in delivering its newest most technologically advance widebody aircraft.

Boeing has delivered about 380 Dreamliners, including 28 to United and 15 to American (AAL)  -- which are helping American's Pacific growth -- while Airbus has delivered 16 A350s including seven to launch customer Qatar Airways.

From San Francisco, United offers 10 daily non-stop flights to nine cities in Asia. Four routes -- Chengdu, added in 2014; Xi'an, added in May; and Singapore and Hangzhou -- are enabled by the 787.

At 8,446 miles, SFO-Singapore will be the third-longest route in the world as well as the longest flown by a 787. The flight will take 16 hours and 20 minutes westbound and 15 hours and 30 minutes eastbound.

Hangzhou, to be added in July, is a 787 route not because of distance but because it would not draw enough passengers to fill a bigger aircraft. The 787 is big enough to carry sufficient fuel but small enough for "thinner" routes. Hangzhou is only 102 miles from Shanghai, which has abundant trans-Pacific service. "It cannot be done with another airplane," Grant said. "Another airplane is too big."

Looking ahead, the 787 and the A350 could enable Chinese carriers to launch West Coast flights from Guangzhou, Nanjing, Wuhan, Chengdu and Changsha, and possibly even from other secondary cities such as Kunming, Xi'an and Fuzhou, Grant said. Seattle could also gain flights to secondary cities, perhaps on hub carrier Delta or its Chinese partners.

Seattle "is typically closer to Asia than Los Angeles by {621 miles} or more which gives it a unique advantage for potential non-stop services to places such as Kuala Lumpur, Jakarta and Chennai which are just beyond the unrestricted range -- or on the edge of it -- of the new A350-900s and B787-900s," he said.

At one time, Singapore Airlines flew non-stop from Singapore to both Newark and Los Angeles with an Airbus A340. Both flights were discontinued in 2013, partially because the four-engine aircraft was a gas guzzler. Singapore has said it will restart Singapore-Newark in 2018 with an A350. At 9,534 miles, the flight will be the longest in the world.

From the West Coast, United has by far the most trans-Pacific capacity, with 22,506 seats or 50% of the total, based on statistics compiled by OAG for the first week of March. But Asian carriers currently operate 71% of the seats in the West Coast-Asia market, OAG said.

Taiwan-based EVA Airways is second, with 13,596 seats and flights to the three key West Coast airports: Los Angeles International, San Francisco International and Seattle-Tacoma International. Hong Kong-based Cathay Pacific is third at 12,034 seats; it flies to LAX and SFO.

Delta is fourth with 12,034 seats from LAX, SEA and Portland. American is 14th with 4,893 seats from LAX.

Both American and Delta recently announced new flights. American will add LAX-Hong Kong in September using a Boeing 777-300ER, while Delta will add LAX-Beijing in December using a 777-200ER.

As for airports, LAX has about half of the capacity, while San Francisco has 37% and Seattle has 10%. Three other West Coast airports -- Portland International, San Diego International and San Jose International -- have 1% each.

Tokyo Narita has lost ground both because an increasing number of U.S. passengers no longer connect there and because flights to Tokyo Haneda have increased. But Grant said, "It will bounce back with other intra-Asian traffic."

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

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