The New United Boosts Mexico and China, Adds Frequent Flier Reciprocity

Continental, Mergers/Finance, United

Yesterday, the new United continued tweaking its offerings with three announcements on Mexico, China, and frequent flier reciprocity. While I’m sure there are going to be a few big announcements over the next few months, I imagine we’ll see a lot more small ones like these as the two airlines march toward one. I’m certainly not planning to write about these things every time they happen, but I thought yesterday’s were particularly interesting.

More Mexico
One of the announcements was a compilation of a bunch of moves being made in Mexico, some done before the merger and some new. Here’s what’sUnited Expands Mexico happening.

  • LAX to Leon daily on a Continental 737-500
  • Cancun to Austin, San Antonio, and Raleigh/Durham Saturday-only during winter season on Continental 737-700s
  • LAX to Mexico City goes from daily to three times daily on United
  • Chicago to Mexico City goes from Saturday-only to twice daily on United
  • San Francisco to Mexico City goes from daily to twice daily on United
  • Denver to Mexico City new daily service during the winter holiday season

One of these stands out like a sore thumb. I mean, Raleigh/Durham to Cancun? Delta is already flying that as a Saturday-only service, so is there really enough demand for two? There has to be something behind the scenes there. But the rest make a lot of sense on the surface.

All the Mexico City flying is a result of the perfect storm. When Mexicana shut down, it left a vacuum for more flights between Mexico and the US. But then the FAA declared Mexico a Category 2 country which meant that Mexican carriers could no longer add service until the country fixes the problem. That left huge opportunity for US carriers, and most of them have been beefing up service to fill the void.

I also really like the LAX-Leon flight. I could never figure out why United refused to look at more LAX-Mexico flying, but if anyone can do it, it’s Continental. This has to be the brainchild of the Continental guys, and I imagine we’ll see more like it. At least, I hope that’s the case.

Fighting American in Shanghai
Glad to see the stiff competition between United and American hasn’t disappeared with the Continental merger. It’s just moved to China. For years, China Eastern has been the only airline flying LAX to Shanghai nonstop. American has had its code on that flight for a long time as well. But now China Eastern is going to join SkyTeamUnited American Fight and Delta will be the airline’s US-based partner. So American had to decide what to do. It apparently saw enough opportunity on the route to apply for service on its own. The DOT approved the application almost instantly.

But now, United isn’t happy about that and has applied for service itself. Great, what a waste. There was nothing stopping United from asking for this before, but it’s like the little kid that wants what his brother has. This flight would not only divert connections from the current San Francisco flight, but it would also flood the market with a lot of seats, if approved. (Is there even another frequency available in the bilateral agreement?) Either way, I don’t like this move.

Economy Plus for All
Lastly, OnePass and MileagePlus got even closer by implementing further reciprocal benefits for elite members in both programs. As of now, Continental elites can sit in Economy Plus on United and United elites can sit in the preferred seats on Continental. They can also get upgrades on either airline. In other words, it really doesn’t matter which program you’re in at this point. The benefits are virtually identical, though the final merger into a single program won’t come until next year sometime.

[Original photos via Rep Gingrey and Flickr user *clairity*]

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26 comments on “The New United Boosts Mexico and China, Adds Frequent Flier Reciprocity

  1. A couple of thoughts…

    1. DL/UA fighting it out for broke college students on the CUN routes seems silly.
    2. DEN-MEX on a seasonal basis seems odd. MEX isn’t really much of a sun&fun destination…
    3. Three carriers on LAX-PVG might seem like a lot now, but I think it’s just the start. Just based on where the world is heading, LAX-PVG seems poised to become the JFK-LHR of this century…

    1. #2 – It’s VERY seasonal – I mean, just for a few weeks over the Christmas/New Year holiday. So in that sense, I think it makes a lot of sense. If demand is enough, maybe it’ll stick around longer.

      #3 – You may be right that it’s just the start, but United didn’t seem to be interested until American applied for the service. That tells me that this isn’t based on expected demand.

    1. Chicago has the second largest Mexican population in the US behind LA, so my question is more about why United hadn’t done this before. I imagine the Mexicana failure was just the push it needed to step things up. Mexicana, by the way, had 2 flights a day.

  2. Any mention of the fate of E+, whether the CO airplanes will be reconfigured? You have to assume that E+ either ends up on all airplanes or is eliminated for consistency. I would think E+ would rule because it is a differenciator and provides opportunity for ancillary revenue, especially on long-haul flights. I think a lot of frequent fliers are drawn by the E+, I am. I would be upset if my aircraft was switched on a TATL and my E+ reservation was no more.

    1. Like you I am curious about the E+ future, but I am also wondering how they are going to harmonize the First/Business/E+/E- and Business/E- of the two fleets. And more pointedly after my HNL-SFO-DEN flight yesterday when they are going to update the UA aircraft to the mid-2000’s instead of the early 1990’s. Delta is offering up some tough competition on domestic long-hauls and the 777’s flying HNL-SFO/LAX and the 767’s flying SFO-DEN should embarrass the new UA when compared to the DL A330’s (with international business class seats) and 757’s (with AVOD). I can’t wait to hear what they are going to do with aircraft interior.

    2. I would think the best thing they could do with E+ is to keep it and add at least 1 free bag, free DirecTV, and free food (CAL just started their BOB program 2 days ago) to make it a true EconomyPLUS and not just extra legroom.

  3. As far as upgrades are concerned, it still matters which program you are in. Top tier in CO still clears after UA’s top tier and continues that way down the tier status… and vice versa.

  4. I also thought RDU-CUN was odd and I didn’t even know DL did it on Saturdays at the time. Now it really seems odd since RDU isn’t really a big UA or CO market…is it?

    Same for UA now wanting L.A. – Shanghai right after AA gets the OK which did seem fast didn’t it.

    What I don’t understand is why Mexico is permitting U.S. carriers to start any new service they want, if Mexican carriers can’t. And how much of that CO L.A. – Leon service will be full of UA connecting traffic. I would think a lot so why not just use UA aircraft to fly it. But with the CO/UA codeshares people don’t know who they are flying on anyway until it all becomes one, so I guess it doesn’t matter.

    So Brett did you and your brother always want what the other had, is that where that line came from……LOL

    1. As has been mentioned, there are limits allowed in the bilateral agreement so unless Mexico wants to scrap the bilateral, it’s just going along with what’s allowed today.

      As for Leon, it’s Continental because it’s a great utilization move. The airplane is basically utilization flying out of Leon. Instead of spending the night there, it comes to LA and turns around, ready for its morning flight.

      Lv Leon 925p Arr LAX 1044p
      Lv LAX 1155p Arr Leon 505a

      And no, my parents always treated us equally so there was no fighting along those lines. (I just beat him up because it was fun and I was older.)

  5. “Is there even another frequency available in the bilateral agreement?”

    According to the DOT docket, there were 21 weekly US-China frequencies available after the DOT granted 7 to AA for LAX-PVG.

    1. Thanks Alex. Also got an email from someone saying that another 14 weekly frequencies will be available starting next year, so there is plenty of room now.

  6. I’m not surprised by DEN-MEX because Mexicana was the only one flying this.

    On the other hand, I’m wondering if the double-daily ORD-MEX is to discourage a Southwest/Volaris partnership from starting a MDW-MEX route. I think the new United knows that Southwest (after the AirTran buy) will increase Mexico with Volaris, so is this just United defending (Continental’s) well earned market share?

    I’m interested in what the new United wants to do on the East Coast and when they’re going to fix their crappy terminal at Dulles and finally move all the *A partners under one roof.

    1. It could be a defense against Southwest/Volaris, but I doubt it. (That seems more likely in Cancun since Southwest/AirTran will already fly there.) Volaris is just starting to touch Mexico City (versus its original Toluca base near the city). And there’s no guarantee that Mexican airlines will be allowed to add flights anytime soon. I think this is just being opportunistic.

  7. On RDU-CUN, my guess is that it’s a pre-emptive strike at SWA/AirTran. United wants to stake out some teritory before SWA announces its intents.

  8. Shane, check out the press release. It says “United First (R), United Business (R) and United Economy (R)”, and does not mention Economy Plus. Either they included E+ within their definition of United Economy or they have decided to drop it altogether. And if I were UA, I would have applied for LAX-Shanghai and LAX-Beijing ages ago. LA is one of the largest O&D markets in the country.

  9. @David SF Eastbay – it isn’t that Mexico is allowing US carriers to start any new service they want, it’s that there are a lot of route authorities sitting around unused under the current agreement…most city-pairs are allowed 2 US and 2 Mexican carriers (I believe some routes are allowed three), and a lot of routes only have 1 US carrier currently flying them.

    I wouldn’t be surprised if AUS-CUN isn’t, at least in part, a preemptive strike at JetBlue.

    Speaking of Mexico and gaps caused by the Mexicana shutdown, I wonder if UA has considered FAT-GDL?

    1. AUS and SAT – Cancun are probably just a lot of demand from the local area (being a local and a frequent flier…) and at SAT they are about to have a nice new terminal that CO has said is going to get better with new prez club and all. My hopes for that terminal are that they consolodate United/CO and US Air there, and that allows JetBlue (and maybe Alaska) to move into SAT. That would be great for me… Of course, I just flew US Air and the lady at the gate said they are staying at the stepchild part of terminal 1 where they have been since they vacated the old terminal B.

      My observation from flying CO and UA regularly now for a while is that CO has more vision. One reason they could have decided to step up now and challenge on those routes is that now they have CO execs running the show. New exec, little bit of vision, “hey, why aren’t we doing that? Get cracking…”

  10. Nice altho unnecessary aircraft detail on the new Mexico routes …-500s,-700s, etc etc, but WHEN do these routes start up? Reminder: All journalism is WHO, WHAT, WHERE & WHEN! Opinions and speculation about airline decisions are optional …

    1. All of that information is in the press release linked in Cranky’s post. This is closer to an opinion column than a news article. No sense in Cranky just parroting United/Continental’s press release, IMHO. How the merger and other circumstances makes these routes possible is what I find interesting about Cranky’s column.

    2. Really? Not only is Alex right that Cranky writes primarily opinion pieces, but this is a blog for airline and aviation dorks. We care about the make/model/variant of aircraft on the route for all kinds of aviation dorkiness reasons.

    3. Clearly not a regular to the site. This isn’t a new site; it’s an analysis site. Cranky doesn’t report the news, he takes the news and gives his opinion on what it might mean, how it might affect the industry, etc.

      And, as already mentioned, most of us frequenting Cranky are here for the dork/geek factor, which includes silly details like the type of aircraft, how the meal looked, etc.

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