No, there's not some giant recovery taking place. Global airline are still in severe trouble. But United Airlines is betting it can make some money in China — if only the government lets it back in.
United Airlines wants to resume passengers flights to China as soon as next month but is waiting on governments in Beijing and Washington, D.C. to allow it, an executive told employees Thursday during a virtual town hall meeting.
In early February, United suspended flights to its four China destinations — Shanghai, Chengdu, Beijing and Hong Kong — just before the Trump Administration banned many foreign nationals from visiting the United States, if they recently had visited China. Since then, the Chinese government has placed strict limits on incoming flights from foreign airlines, capping them at one flight per week.
“We are working with Washington, D.C. and China to figure out when we can reinstate passenger flights,” Chief Commercial Officer Andrew Nocella told employees. “We are ready to go. We are ready to get all the necessary regulatory approvals to make that happen.”
Overall, Nocella said, United’s international business is struggling, and the carrier plans to be judicious in resuming long-haul flights, with many not returning until September or later, depending on demand.
But United sees some opportunity in China it does not see elsewhere. If the China flights return, they will join London, Sydney, Frankfurt, Tel Aviv, Sao Paulo and Tokyo as short-term cornerstones of the airline’s long-haul network.
Importance of China
Under normal circumstances, United is the largest U.S. carrier to China, and the country is of strategic importance to the airline. Many corporate customers in the San Francisco area, such as Apple, Oracle, Google, Facebook, and Cisco, rely on United for its flights to Asia, and may need access to factories and offices abroad even during a pandemic.
Last year, United told employees Apple spent $150 million with the airline, including $35 million on just one route — San Francisco to Shanghai. At the time, Apple’s second most popular route was San Francisco-Hong Kong.
To serve these customers, United had targeted next month for the resumption of some San Francisco-China service. It is now selling San Francisco to Beijing and Shanghai beginning on June 20, but Nocella said the airline may not make its deadline.
“We are going to have to make the decision very soon to pull it off the schedule because we don’t have the rights to fly to China in June,” he said. “But we still have high hopes for July.”
The airline continues to fly cargo from China, Nocella said. It operates four flights per day to Chinese airports, via Tokyo-Narita, he said.
Photo credit: United Airlines want to return to China. But it is not clear when that will happen. 275539