Wednesday, April 11, 2012

United continues international network shifts and drops flights to Accra in Ghana

United is moving international capacity around its largest hubs in what appears to be an effort to maximize its network now that a crucial passenger service system cutover is complete. The IT system cutover allows United and Continental, whose merger is now complete, to fully utilize the combined networks and properly cross-fleet to operate optimal-sized aircraft in United's markets. One of the more prominent changes is the elimination of flights to Accra from United's Washington Dulles hub, which was the carrier's first point in Africa when the route was launched in 2010. Other changes include the seasonal elimination of flights from Washington to Moscow and from Newark to Rome.
The changes will support an overall revised capacity forecast for United this year. The carrier has refined its 2012 capacity guidance from an overall decrease of 0.5% to 1.5%, compared with a previous estimate of between growth of 0.5% and a drop of 0.5%. United's international capacity is now projected to grow this year by 0.3% to 1.3%, but some of that will be driven by new long-haul flights from Washington Dulles to Doha beginning in May, followed by Dulles to Manchester and Dublin.
United has just introduced flights from its Newark hub, which was a legacy Continental stronghold, to Buenos Aires. The new service is in essence a route transfer from United's Washington Dulles hub. Flights to Buenos Aires from Continental's legacy Houston hub, which is the carrier's gateway from Latin America, are remaining intact.
US DoT data show for 2011 United's load factor on the Washington-Buenos Aires pairing was roughly 70.5%, while the Houston flights recorded loads of 79%. The New York market is much larger than the Washington, DC metro market, so United saw an opportunity to increase passenger flows by moving the flights to Newark. It has a broader international footprint from Newark, which allows a wider breadth of passengers from Europe to connect to the Buenos Aires flights.
Feed to and from Latin America is becoming increasingly important to United and all US carriers operating to and from the region, since its performance has remained consistent while traffic to other regions has suffered due to economic uncertainty. IATA's figures show traffic growth to Latin America of 7.6% in January and 13.3% in February, though the association did warn February traffic levels where somewhat inflated due to the Brazilian carnival holiday occurring a month earlier in 2012.
United has said that Latin America was its best performing entity during the fourth quarter and full year 2011. United earlier reported that passenger unit revenue grew in Latin America by 11.7% year-over-year for 4Q2011 and 17.6% for the full year.