United has suspended Hong Kong flights from Chicago which follows a number of American Airlines discontinued flights from the windy city. Why can’t US carriers make Asia work from Chicago?
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United Suspends Hong Kong from Chicago
This week, United announced the suspension of Hong Kong flights from Chicago. Despite concerns that this shift may be in relation to the protests, United wouldn’t cancel such a stalwart route for a temporary problem. That’s not to say that those with discretionary plans won’t change them from Hong Kong for the time being, but protests didn’t spell the demise of the route. While most of United’s Pacific expansion was the result of purchased routes (planes and hired staff) from Pan Am in 1985 as the carrier struggled with labor unions. I only wish American would have sold their routes to United as Doug Parker and his team struggle to do anything right.
The loss of the Hong Kong route is particularly disappointing due to its historic nature. The route, added in 1996, was initially operated by a 747-400 was at one time the longest flight in the world at 7,788 nautical miles. United operates a 777-200ER on the route until September 9th, 2019 ending a 23-year run.
American Cancelled Nearly All Asia Flights from Chicago
American Airlines, who also operates a hub in Chicago, last year cut flights to Shanghai, Beijing and reduced Tokyo flights to thrice weekly. American has a joint venture operation with Japan Airlines who also serve Chicago. If it weren’t for that business relationship with route covenants, I wouldn’t be surprised if American left Asia altogether from Chicago.
American has found better luck operating from Dallas where they added flights to Seoul, Hong Kong, Shanghai and Beijing over the last couple of years while withdrawing from Asian markets from Chicago including Delhi.
Foreign Carriers Can Make It Work
Plenty of foreign carriers are able to make Chicago routes work. Currently, Cathay Pacific, Asiana, China Eastern, Eva, Korean, and Japan Airlines all fly to east Asia, with Turkish, Emirates, Royal Jordanian, Qatar, Etihad flying to west Asia/Middle East.
Some of those carriers have subsidies directly from the government. That would help to overcome any route shortfall. But US carriers are not without their own subsidies, they just take different forms. There is plenty to argue about on that topic, but this isn’t that post.
Origin and Destination Traffic
Many of those utilize connecting traffic with their alliance partners United and American to other points within the US. But presumably connecting traffic works both ways with US travelers traveling for business and leisure to points beyond those partner cities and from points other than Chicago.
The answer, I believe, is in Origin and Destination traffic (O&D.) Passengers that are flying solely from Chicago to major cities in Asia choose Asian airlines. It’s not hard to figure out why. Cathay Pacific has one of the best business class products flying, so much so that American Airlines licensed the seat for their 777-300ER flagship aircraft. United Polaris, which competed with Cathay on the route from Chicago, didn’t offer their true Polaris product and if they had, that product still lags behind Cathay.
Asian carriers have legendary service as well. It’s not just a matter of quality flight attendant service from the US carriers – many of the most experienced fly the longest international routes. It’s extras like catering, things the carriers like American and United choose not to invest in the same regard as the foreign carriers. Look no further than American’s horrendous attempt at “gnocchi” on the Hong Kong-Dallas route that was so bad I gave up on American Airlines and matched to United.
Conclusion
United can serve their Hong Kong based customers from better O&D markets like San Francisco and Newark, with San Francisco being the best possible point for nearly any connection (aside from Seattle or Anchorage.) American has more O&D traffic from Dallas and owns Dallas-Fort Worth with over 94% of traffic and adding more; connecting in Chicago was a distraction that lost the company money. But it is surprising that US carriers can’t seem to make Asia work from the windy city.
What do you think? Why can foreign carriers make Chicago work while US carriers struggle? Do you think it will change in the future? Should foreign carriers step up to fill in the void?
Kyle, you may indeed be correct for a segment of the O/D customers from ORD, but there is another I would argue larger group of customers who do not have the choice to switch to the Asian carriers. Business flyers whose companies have corporate contracts are not likely going to be able to fly CX, unless it is a code share with AA. Same is true for UA customers and NH.
As an example, my company has a contract with UA and now I will need to schlep from IND to SFO to pick-up the HKG flight as we do not have a contract with CX,
It may also be true that there were not heavy freight demands between HKG and ORD, which might have been used by UA to off-set their passenger ticket losses.
Sad to see both AA and UA move so many Asia flights out of ORD, but I respect that these must be profitable lines for them, otherwise they have no choice but to discontinue them.
Shorter to connect in EWR vs. SFO (as much as EWR sucks, at least there’s a Polaris lounge), and you spend less time in domestic Y or F
Agree with Mike a bit. We have a contract with American which is great for London but we have no South American flights and barely anything to Asia. Annoying.
I’d skip United but I do like American even more than jal which has no storage.
I think you answered your own question. One, UA and AA have foreign carrier competition at ORD. AA largely doesn’t at DFW to Asia, except to Tokyo, which has a crazy amount of demand to support both JL and AA. Your choice if you live in Dallas is to either take the nonstop on AA, or a connection on a better carrier. We know which option is going to win that battle. Two, you have UA and AA cannibalizing each other at ORD, whereas AA rules DFW with an iron fist when it comes to international routes (hence why both award and revenue tickets remain frustratingly expensive here vs. domestic, where fares have cratered since the mid-2000s).
I think this has a whole lot more to do with the double daily from SFO, but I think ORD has its problems also. Asiana is discontinuing it’s ICN-ORD (which was never even daily year round) flight and also going double daily to JFK, so it’s just not American carriers pulling out. My guess yields out of SFO and the ability to offer a late night departure won out over keeping the ORD flight.
Agreed, sizing up those routes with 77Ws also is a factor.
I think that this article misses the point. Yes,US carriers in Chicago may not be able to compete in the Asian market, but they excel in other markets, such as Washington Dulles. IAD has a ton of O&D and connecting traffic through Asia. For me, I was almost always required to be on US metal for most of the trip with foreign carriers allowed only certain routes or when US metal isn’t available. Contracts play a huge role in the viability of these routes.
Contracts with US carriers would allow routings through SFO, EWR and IAD without issue. Dulles also has Asian competition on direct flights from foreign carriers, yet United can hold their own at that hub, the same situation occurs at SFO. That leaves two explanations, O&D and a market that knows the product is inferior and has a choice. I honestly lean more on the first than the second.
I don’t know if the hard & soft product is up to snuff, but I was looking at ORD->ICN flights recently in Business class and China Eastern is absolutely blowing away everybody on price, like sub-$2000. But even carriers like ANA will get you there with 1 stop for over $1,000 less than the US carriers.
Originating out of Denver, and loyal to United, I actually don’t mind heading even further out to Newark then connecting to Asia since it’s cheaper than going to SFO (higher demand?) so my company is OK with it and I rack up way more miles…
I flew China eastern with my family from Syd to Ord with a stopover in Shanghai. Was 1/3 the price of anyone else. Biz seats were great but soft product soooooo bad. And I’m someone who puts priority on hard product to the extreme. Food was inedible. Horrible. Makes two long flights with 3 kids pretty tough. Why can’t all flights have a simple snack menu with ramen. I don’t even mind if it’s $.70 ramen noodles off the shelf. Lounge in Shanghai a disaster. If they could fix some tiny things would flybthem more. For eg I have to fly from Auckland to Ord at the end of the year and with the flying blue bonus they were the best option. But I couldn’t pull the trigger 🙁
oh yeah. last time on a domestic route i took shanghai airlines(affliate of CE), and we had a 30 hour delay lol
I’m surprised the US3 didn’t try to find a way to blame the ME3 for the large amount of “suck,” between the US3 and JAL/ANA/CX, etc. Not a peep when they cannot blame their mediocrity on the gulf.
No surprise, Chicago is a declining city by every metric. ORD used to be necessary when limited range of then existing aircraft made it a necessary stop, but those days are over.