With new Brisbane route, United underscores importance of its new partner, Virgin Australia
Among U.S. carriers, United Airlines has a long history in Australia, and on Friday, it will start a new chapter.
The airline begins service to its third Australian destination, Brisbane Airport (BNE), which serves the capital of Australia's Queensland state. The thrice-weekly service from San Francisco International Airport (SFO) on a Boeing 787-9 Dreamliner will operate year-round.
In addition, Friday marks the return of United's service from Houston's George Bush Intercontinental Airport (IAH) to Sydney Airport (SYD) as well as service from Los Angeles International Airport (LAX) to Melbourne Airport (MEL). Both routes operated prior to the onset of the COVID-19 pandemic and are resuming now. The Houston route, the longest in United's network, will operate thrice weekly until Dec. 15, when it moves to daily service; this is more service than the route offered immediately before the pandemic. The Los Angeles route will also fly thrice weekly through the beginning of December and then become daily. Both routes are operated by the 787-9 Dreamliner.
"United offering nonstop service to Sydney, Australia is worthy of celebration as we are the only airline operating out George Bush Intercontinental Airport to do so," Phil Griffith, United's VP of Houston, said in a statement. "We anticipate a busy holiday travel season for both domestic and international travel and are proud to build upon our industry-leading global network to offer our customers the widest range of destinations and most convenient travel options."
Patrick Quayle, United's senior vice president of global network planning and alliances, told TPG in an interview that demand for Australia has been strong as the country reopened this year.
To capitalize on that, United will be flying its largest Australia schedule ever by next month.
However, United's surge in Australia service is also the story of a new partnership that the airline is particularly proud of: Virgin Australia. Australia's second-largest airline — which is recovering from a COVID-related bankruptcy filing — began partnering with United this year, after exiting a close partnership with Delta Air Lines that lasted for more than a decade and had evolved into a joint venture. That tie-up ended abruptly as Virgin reorganized under bankruptcy protection.
United first entered the Australia market in 1986 when it purchased the Pacific operations of struggling Pan Am for just $750 million — which, to this day, is widely viewed in the industry as a steal for United. Overnight, United, which was primarily a domestic carrier, became a major transpacific player. United's SFO hub became a major Pacific gateway, with its LAX hub also supporting a significant amount of transpacific service.
United's new partnership with Virgin Australia is actually the second partnership the Chicago-based carrier has had with Brisbane-based Virgin. Following the 2002 liquidation of fellow Star Alliance member Ansett Australia, United launched a codeshare partnership with Virgin Blue — the original name for Virgin Australia. However, in the past decade, Virgin had focused on its tie-up with Delta, leaving United without an Australian partner.
"We had the broadest network without a partner," Quayle said.
Instead, United has worked closely with Star Alliance member Air New Zealand, which in the past decade has launched service to key United hubs in Houston and Chicago's O'Hare International Airport (ORD). (That airline also launched service to New York's John F. Kennedy International Airport, which was a key market for United, but now the airline is suspending service at JFK.)
More: United's new partnership with Virgin Australia begins May 23
Meanwhile, Qantas and American Airlines were both founding members of Oneworld in 1998. In the years since, that relationship has only strengthened. The two airlines are now members of an immunized joint venture, meaning they are allowed to coordinate on fares and schedules, and they can split revenues on service between the U.S. and Australia.
Qantas, in fact, briefly launched flights on the SFO-BNE route in February 2020, but suspended them shortly thereafter due to the onset of the COVID-19 pandemic. (Qantas does serve LAX from BNE — allowing for connections via American's hub in California.) In that context, United's new Brisbane route can be seen as a move to keep the Qantas service from returning — staking a claim and defending the carrier's SFO hub. Whatever the motivation, Quayle said it's the feed on both ends of the route that makes this new route so important for United.
"These two really strong brands can feed each other and the networks can feed each other," he said. "And that's what you're seeing is actually the maturity that comes when you have the feed on both ends."
By December, United will be the largest single carrier between the U.S. and Australia, according to Cirium, an aviation data firm. (although, when you combine the American-Qantas joint venture, it knocks United to second place).
As Virgin bulks up again following the pandemic — and United supports it with its largest Australia schedule ever — one question remains: How much market share can United siphon away from the dominant players in the market, Qantas and American?
TPG will be on board Friday's inaugural flight between San Francisco and Brisbane, so stay tuned for more coverage of the festivities.
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