Why United Airlines won’t be adding new flights to India

23 Dec 2015 by Tom Otley
In December, United announced it was withdrawing from its Washington Dulles – Dubai service (see news, December 2015). The day before the announcement, Brian Znotins – United’s Vice President – Network provided an interesting internal perspective on how United views the “unfair” competition it receives from Emirates, Etihad and Qatar Airways, referred to as the Middle East Three  or ME3. Specifically, he detailed why as a result of that competition, it won’t be expanding its India services beyond its daily Delhi and Mumbai flights. Here’s what Brian Znotins had to say “As a route planner working for this airline for 15 years I was around when we started services to both India and China. "When we launched our first India services I think most global economic experts would have been said that they were the two hottest economies in the world and you should expect travel demand to expand with those hot economies. "So when we first envisaged our Delhi service and then Mumbai, we saw down the road, “Well look at the economic growth the road” and we could see a time when we would have service to Bangalore, Hyderabad, multiple services on Chicago to Delhi, Chicago to Mumbai. And all that ended up being true for China -  multiple trips to Beijing and Shanghai and new secondary services from San Francisco. But it’s like we put India into a time warp. It got those two services initially and nothing since. And that’s because the Middle East carriers have really ramped up and based on their subsidies they are able to offer fares through their hubs that are very low. "And we can take a non-stop premium on direct flights up to a point, but with connecting fares being so low we’ve been able to maintain our services on those two Indian routes, but there’s no business case to be made for expanding growing India service despite the growing demand in those markets because it doesn’t make sense. We’d rather dedicate the planes to new services to China. India is too impacted by the Middle Eastern Carriers to warrant a growth case there.” [Note that in the case of China it’s a large back haul to go to China via the Middle East for U.S passengers.] This opinion that Emirates, Etihad and Qatar Airways are subsidised carriers engaged in “unfair” competition has become a familiar refrain from the U.S carriers (see other stories on this topic here and here). Indeed United’s previous Chief Executive, Jeff Smisek said that Open Skies has been “terribly abused” by the ME3, and earlier this year United, Delta and American formed the Partnership for Open & Fair Skies coalition calling on Washington to enforce the Open Skies agreement, which they claim is weighted in favour of Gulf carriers (see news, June 17).  It asks the US government to put a temporary block on new US-bound services by Qatar Airways, Etihad Airways and Emirates. Znotins says that, “In the Open Skies agreement we expect both sides to benefit, and at the moment only one side is getting any benefit from it.” I asked him why he believes so strongly that the carriers are being subsidised. His answer was in two parts. Firstly, it was that he “trusted the forensic accountants know what they are doing”, but secondly he said the following: “When you look at [the ME3’s] flight levels they clearly offer too much capacity in the market than what the market demands. Ultimately from a network planning point of view, it’s about matching supply and demand. If you offer too much supply into the market, the service will fail since you get price degredation to the point it is not sustainable. In their routes they offer services that in our forecasting models that would be unviable. If we were them, and flying their routes and their route network on their costs, that route would not be viable. So it’s pretty compelling to me. That they are subsidised.” Tom Otley To read more about this, click here  
Loading comments...

Search Flight

See a whole year of Reward Seat Availability on one page at

Business Traveller UK September 2023 edition
Business Traveller UK September 2023 edition
Be up-to-date
Magazine Subscription
To see our latest subscription offers for Business Traveller editions worldwide, click on the Subscribe & Save link below