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United Airlines reduces frequency on Australian routes amid capacity concerns

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United Airlines reduces frequency on Australian routes amid capacity concerns
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Gary Leff Chief Financial Officer | View from the Wing

Fifteen months ago, United Airlines announced significant growth plans for routes to Australia and New Zealand, becoming the largest airline serving Australia and surpassing Qantas. However, as noted by aviation watchdog JonNYC, the airline is now scaling back its operations.

".. IAH-SYD reduced from 7x to 3x weekly in November and December," tweeted JonNYC (@xJonNYC) on July 26, 2024.

United's current route network to Australia includes flights from Los Angeles and San Francisco to Sydney, Melbourne, and Brisbane, as well as from Houston to Sydney. The seasonal second flight between San Francisco and Sydney will operate only for two months at three days a week instead of daily. Additionally, a smaller aircraft will be used for the San Francisco to Melbourne route, and there will be fewer flights from Los Angeles to Melbourne leading into peak season. Houston to Sydney will also see reduced frequencies.

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United benefits from domestic feed provided by Virgin Australia, which controls about one-third of Australia's domestic flying compared to Qantas' two-thirds share. Historically, the Australian market has been strong for U.S. airlines during winter but weaker in summer; however, post-Covid trends have shown strong summer demand as well.

Despite this demand, there has been an overcapacity issue—particularly to Brisbane—which invested heavily in subsidizing new services from United, American Airlines, and Delta Air Lines. As these subsidies expire, further cuts are anticipated.

The Chicago-based carrier remains larger than its rivals in terms of service to Australia but is opting for smaller planes or less frequent flights on several routes. This strategy aims to reduce available seats while hoping to fill remaining aircraft at higher fares.

Interestingly, United has not made reasonable award seats available on underperforming routes, especially in premium cabins. Securing a premium cabin award seat to Australia remains challenging.

American Airlines previously released reasonably-priced redemption seats if passengers avoided non-stop flights or booked shortly after travel dates were loaded into their schedule; however, this practice has ceased. Delta rarely offers reasonably-priced long-haul redemptions. Similarly, Air Canada's flights to Australia are costly and Qantas primarily releases premium cabin saver inventory only to its own members rather than partner frequent flyer programs.

The difficulty in obtaining discounted premium seats suggests that flights might be performing well despite insufficient demand sustaining all operations—a potential indication of revenue management issues rather than just scheduling problems.

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