DOHA, Qatar — United Airlines has no intention of relinquishing its new leadership in the US-Europe market, even as the carrier returns more widebody to Asia, chief commercial officer Andrew Nocella said during a wide-ranging interview.
“We’re the biggest transatlantic at this point, and I think that’s a permanent change,” Nocella said at IATA’s annual general meeting here in late June.
United is scheduled to fly nearly 3.7 million seats between the U.S. and Europe this June, July and August, according to Cirium data, nearly 300,000 seats above Delta and 900,000 seats ahead of American. By comparison, in the summer of 2019, Delta flew 600,000 more seats in Europe than United, and American flew 19,000 more.
Nocella said United does not see the change as a tactical shift as it expects demand to grow in Asia, where it has long been the US market leader. Rather, it is a long-term strategic move.
United’s decision not to retire widebody in 2020, while American and Delta retired some, was made with that long game in mind, he said. As a result, even with its rise in Europe, where United is flying roughly 13% more destinations this summer than in 2019, the carrier still has 20 ground wide bodies that can be deployed to places like Japan, mainland China and Hong Kong a request for return should be made after travel restrictions to those countries are lifted.
“We swung for the fences and I think we made it home.” — Andrew Nocella on United’s decision to put more seats in the transatlantic market than Delta and American.
“As the industry turned right from that perspective, we thought to ourselves, let’s get ready for a rebound and let’s turn left,” Nocella said, referring to the retirements. “And we were really confident that when the border restrictions were eased, that demand would close after two years of no travel, and that would be a great opportunity for a permanent change in the composition of who flies across the Atlantic at what relative size. and we took advantage of it. We jumped for the fences, and I think we got home.”
United added a number of routes to Europe this summer, including those to leisure destinations such as the Canary Islands, Mallorca and the Azores, which are not very popular in the US market.
Nocella said all of the carrier’s new lines are performing well, and he predicted that all will be back on the schedule next year along with some new ones.
In the US, fewer regional routes
The chief commercial officer also offered insight into United’s domestic network, which is currently about 1,000 fewer daily departures than it was in 2018 and 2019.
Nocella explained that most of these reductions were made to regional operations. Under the carrier’s long-term United Next fleet plan, it had already planned to reduce regional operations, but the ongoing pilot shortage has forced it to accelerate the pace of reductions.
United’s core network has not been affected by the pilot shortage, Nocella said, and is similar to its pre-pandemic shape, albeit with a somewhat greater emphasis on leisure routes compared to 2019.
Supply reductions from United Express’ regional markets are not hurting core operations, Nocella added.
“We’re very successfully, financially, working our way around that, but we know that’s difficult for the communities that we’ve traditionally served with a certain number of flights and a certain number of seats, and now we are no longer able to do this,” he said.
Demand for air travel remains strong
On the demand front, there have been some early indications that high fares and broader inflation in the market are starting to dampen traveler enthusiasm.
For example, Hopper reported that budget domestic ticket prices fell for the first time this year in the month between mid-May and mid-June, with round trips dropping by an average of $20. The latest ARC data shows that the agency’s channel ticket sales were flat last month on a one-year to three-year basis. Leisure agencies sold 1.2% more tickets in the week ending July 3 than in 2019, up from 6.2% on 2019 for the week ending June 5.
Nocella, however, said demand for United remains strong.
“We’re anticipating a very strong July and August and we’re not reporting any bumps in the road,” he said.
He added that while he understands the fare levels are painful, the base fares are actually the same as 2014, adjusted for inflation.
“We’re pretty adamant that while rates are higher, they’re higher to cover the price of fuel, which everybody has seen, and that’s not reducing demand at this point,” Nocella said.