In United’s 2Q Earnings call, United President Scott Kirby reported that the Pacific had been its worst-performing operation in the quarter, and the only region with a negative PRASM year-on-year. Fast-forward less than two weeks and United is now ending San Francisco – Hangzhou service (3 times weekly) on October 14, which Routes Online reported. Back in mid-2016 United launched San Francisco – Hangzhou nonstop service to deepen its Chinese secondary market reach. I talked a little bit about this in this post.
Originally, the Hangzhou route was an alternative to additonal San Francisco – Shanghai service that United wanted. Unable to bank additional slots at Pudong, Hangzhou seemed like the viable option, as its nearby and could possibly absorb some traffic from Pudong. Since then, however, United has secured additional slots and service to Shanghai from San Francisco, making the Hangzhou route redundant. The route was under-performing, and Juneyao Airlines entering into the picture as a Star Alliance connecting partner surely made it even more difficult to justify the route. The rest is history… with Brian Sumers of Skift reporting the following last week:
I'm told @united is cancelling SFO-Hangzhou in October. Prior management was bullish on secondary China, but it's a tough market. Someday…
— Brian Sumers (@BrianSumers) July 29, 2017
I don’t enjoy seeing service cuts, ever. Mainly, there will be customers who are impacted, and secondly it usually points to poor performance from the airline’s perspective. Neither is good. However, it’s way better to ax a route that isn’t doing well and avoid losing more money. Exactly what Jeff Smisek didn’t do for ‘unknown reasons’ in that Newark – Columbia route, and look at the mess that he created for himself and United employees and flyers. We’re still impacted from it years later.
It’s interesting that just last month, the Hemispheres magazine published a Hangzhou feature article (also published at The United Hub) only to cut the route months later. This tells me the decision was made rather recently. The question is with Hangzhou being no more, where does leave United’s other secondary China service to Xi’an and Chengdu?
***Featured photo by Scott Turner for Hemispheres magazine