Trans-Pacific route still hurting airlines
United Airlines worldwide chief executive Jeff Smisek has confirmed that the four carriers battling it out over the Pacific are scratching around to make money on the route.
But United Airlines says it is committed to the Australian market and will upgrade some of its onboard products to stay competitive.
Smisek says there are too many seats and (low) fares make it difficult to achieve a profit.
“This market is clearly unstable, there’s far too much capacity for anybody to make money on this route today,” Smisek said in an interview with Business Spectator in Sydney.
United operates the route alongside Qantas and more recent entrants, V Australia and Delta Air Lines.
And it could get tougher for United should the US regulator change its draft advice and approve an alliance between Virgin Blue and Delta on the route.
The two airlines’ have launched an appeal for antitrust immunity which would allow a Delta-Virgin Blue alliance to co-operate on pricing, revenue management and marketing on trans-Pacific routes.
The Australian government has approved plans for the proposed alliance.
Ian Jarrett
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