Did you know the three major U.S. airlines -- United, Delta and American - compete head-to-head on almost no long-haul international routes?
I can think of only two -- Los Angeles to London Heathrow and Los Angeles to Tokyo. I'm of course not including the New York market, where the three essentially compete on a bunch of routes. But United's departures leave from Newark, while Delta and American fly from New York John F. Kennedy, so technically there's no overlap.
Now, the big three will compete on one more route. This summer, Delta will join United and American in flying from Los Angeles to Shanghai. You might think two U.S. carriers, as well as China Eastern, would be enough. But in a conference call to discuss earnings this month, Delta executives said they think there's room for a new entrant.
One major reason? Americans and Chinese nationals can now receive 10-year visas, a considerable improvement over the previous standard one-year visa. That makes it far easier for travelers to move seamlessly between the two countries. And when the policy shift was announced late last year by the Obama administration, it came as a bit of a surprise to airlines.
"The one thing that’s happened in the last few months is the extension of the Chinese Visa program," Delta Chief Revenue Officer Glen Hauenstein said. "That was unexpected and so we’ve seen a significant increase from China."
It's not just Shanghai traffic that excites Delta. Another SkyTeam member, China Eastern, has a hub in Shanghai, meaning Delta passengers can connect to just about every important city in China through the airport.
"With the China Visa extensions we see a huge increase in demand and with the opportunity that’s presenting itself in China with our partner China Eastern we really saw this as a onetime opportunity that was not in the normal course of our business, Hauenstein said.
I keep expecting more U.S. airlines to use the new visa rules to open up new nonstop routes from the U.S. to China. There is now precisely one route flown by a U.S. carrier to a mainland China city other than Beijing and Shanghai. That's United's flight from San Francisco to Chengdu.
Receiving government approval to fly such routes is difficult, but not impossible, so I continue to think we will eventually see more service beyond Beijing and Shanghai. Perhaps American will start one from Los Angeles, once it starts flying its Boeing 787s? It has signaled it wants to do more Asia flying from L.A.
What do you think?