Why the Oceanic rush to Texas? An explanation

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In light of Qantas dropping its San Francisco route in favour of Dallas, and Continental’s announcement last year it will fly from Houston to Auckland, I suspect it is not going to be long before there is speculation on what is special in Texas, besides the Tex-Mex.

I’ll let United-Continental chief executive Jeff Smisek explain, as he told the National Aviation Press Club last month:

“How many Kiwis live in Houston who want to fly to Auckland on a daily basis?”

“Three?”

His rhetorical question’s answer is captured in the above photo, but illustrates his point about hub-to-hub flying.

SYDDFWAKLIAH.gifHouston is one of United-Continental’s hubs and Auckland is the hub for fellow Star Alliance carrier Air New Zealand. Once you bring in feeder traffic on both ends and consider the economic advantage of the 787, without which Smisek says the carrier cannot make the route profitable, Houston to Auckland makes sense.

The route’s importance is not about Houston by itself but the fact Houston is a hub. The route could easily be in a different city or state if that’s where a suitable hub is (aircraft performance permitting, of course).

United-Continental does have hubs at Los Angeles and San Francisco, but those are already Air New Zealand destinations. Houston offers the opportunity to grow new traffic rather than mainly steal from Air New Zealand.

You can extrapolate that logic to Qantas’s Sydney-Dallas route. Sydney is a Qantas hub, Dallas is oneworld partner American Airlines’ largest hub, and the 747-400ER gives the route the necessary legs. Flying to Dallas, as opposed to keeping the SFO route or adding another LAX route, generates more connection opportunities. There are hints Qantas may operate a 787 on the route once the aircraft join the fleet.

So, sorry Texas. Oceania loves you for your hubs.

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