Africa: Why United Airlines is flying to Cape Town shows how millennials are influencing Aviation

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When he was in his early 30s and working at American Airlines, Patrick Quayle visited Cape Town, South Africa, for an adventure-filled vacation. When he left, he vowed he’d try to add Cape Town if he ever chose routes for an airline.

Quayle, now 40, recently got his chance. He’s vice president for international planning at United Airlines, deciding where it will fly and when. Starting in December, United will fly three times per week from Newark to Cape Town, though only during the Southern Hemisphere summer.

United is the first U.S. airline to fly to Cape Town.

As Quayle becomes more comfortable on the job — he joined about two years ago from American — he is looking for new leisure-focused routes that might attract younger vacationers who seek options beyond usual hotspots in Western Europe and North America.

Airlines need considerable demand to make an international route viable, so Quayle may never launch a new flight to that remote fishing village in South America or tiny mountain town in Africa. But on the margins, Quayle wants United’s network to include more cities he and his friends want to visit. And they’re seeking options beyond Rome, Honolulu, and Orlando.

Last year, he added Papeete, Tahiti, from San Francisco, a route that attracts vacationers who want to go farther afield than Hawaii. He has also added flights to a few cities that attract both business and vacation travelers, including Tel Aviv and Auckland, a gateway to popular New Zealand markets.

“We are millennials and we are looking to have different travel experiences than our parents,” Quayle said. “As a result of that, the network has to evolve and look different.”

Quayle is not the only airline executive trying to tap into this trend. Many millennials are nearly 40, with steady jobs and enough money to explore the world. Some can afford business class, and those who cannot are often splurging for premium economy, making millennials an important business segment.

At United, Quayle said, passengers pay about twice as much for premium economy as economy, even though the seats do not take up twice the room. Singapore Airlines has also had success selling its premium economy to “mature millennials,” said Sek Eng Lee, regional vice president for the Americas.
”It’s people who are in their 30s,” he said in an interview. “These are people who already have stable jobs and disposable income and they have aspirations to see more of the world. They are discerning. They don’t mind paying a little more for a nice travel experience.”

SINGAPORE’S EXPERIENCE
Lee has some interesting anecdotal evidence suggesting changes in travel trends.

For about a decade, ending in 2013, Singapore flew nonstop from Los Angeles and New York to Singapore. Mostly, the airline marketed the flights for business travelers, promising they could save valuable time and arrive more refreshed. But some leisure travelers flew the routes too, often connecting in Singapore to visit places like Bangkok and Bali.

In 2016, Singapore again started flying nonstop to the United States, from San Francisco, and last year, it resumed flying from Los Angeles and New York.

That’s good for business and leisure travelers seeking a nonstop flight, but it also allows Singapore to compete for one-stop connections from Los Angeles, San Francisco, and New York to tourist markets across Southeast Asia.

The traffic flows are a little different now than six years ago, Lee said.

After arriving at Changi Airport, travelers are transferring to flights to places like Siem Reap, Cambodia, or Chiang Mai, Thailand, or Kota Kinabalu, Malaysia. They’re also going to Da Nang, Vietnam, a place Lee called a “very Instagrammable location.”

“We are seeing people going to places off the beaten track,” Lee said. “We fly to numerous points in Asia, and it really caters well to these new emerging groups — customers who are exploring far-flung places where their parents have not been before. It is a very encouraging trend for us.”

UNITED’S GROWTH
As much as Quayle likes trying destinations that will interest younger travelers seeking to push boundaries, it’s still a niche business.

Like planners at other carriers, he spends the bulk of his time evaluating more traditional routes. In the past two years, he has added flights to business destinations like Singapore, Seoul, and Frankfurt, as well as more traditional vacation spots such as Naples, Italy.

But over time, Quayle said, United’s network could evolve further, giving United a competitive advantage.

“London Heathrow and Tokyo and Hong Kong and Frankfurt are core business routes,” he said. “The same people who fly those are also looking for something different. We can offer them something that isn’t on the shelf at the other carriers.”

Given its size, United always will have major capacity to Hawaii, Florida, and Western European capitals. But Quayle said he’s confident he can find more routes millennials will like.

“We can tap into this growing segment,” he said. “It is not necessarily about how many times you can go to Disney World, but it is about creating special, unique moments.”

Samuel Engel, senior vice president and head of the aviation group at ICF, a consulting firm, said he understands United’s strategy, but said he doubts it is responding to any massive change in passenger demand.

Instead, he said, United is probably looking to expand to new markets because of changes in the U.S. domestic environment.

Some routes, he said, will work, while others may not and could be cut.
“When yields soften at home, carriers go hunting abroad,” Engel said. “We have seen this through multiple cycles. And when capacity abroad gets saturated, the capacity shifts back.”

By Brian Sumers
Source: skift.com

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