Fast-Growing Destinations : Airlines Vie for Popular Pacific and Asia Routes

Soon, the international airlines of the world may be divided into two categories: those that already fly to the Pacific and Asia, and those desperately wanting to fly there.

While many seem obsessed with American travel to Europe, Pacific and Asia are quietly becoming the fastest-growing travel destinations in the world. And competition among these destinations for travelers from the United States is heating up.

A few years ago, an airline ticket to the South Pacific or to Asia was an expensive proposition. Flights were infrequent, and choice of airlines was limited.

Now, airlines like UTA sell discount seats to Tahiti, and Air New Zealand, Continental and Qantas promote cheap packages throughout the South Pacific. Travel between the United States and Asia is on the threshold of an explosion of discount fares.

Los Angeles to Tokyo

For example, eight airlines currently fly the Los Angeles-Tokyo route, with a total of 56 flights per week.

But that, apparently, is just the beginning. Six additional airlines, including American, Continental and Eastern, are also competing for the route. Delta is lobbying hard for the Portland-Tokyo route.

Continental Airlines just announced it will start nonstop service from Los Angeles to Tahiti, and from New York to Honolulu, with the flights continuing on to Sydney and Melbourne, Australia.

All this is occurring as many international airlines are eagerly entering the North American-Asia market. Last October, Canadian Pacific Airlines started nonstop service three times a week to Hong Kong from Vancouver, quickly expanding to five times a week. In April, CP Air inaugurated nonstop service between Vancouver and Shanghai.

“We see so much expansion in the Pacific and Asia,” CP Air spokesman Peter Golding said, “that we’re now looking at flying to such destinations as Korea, Bangkok, Taipei and Singapore.”

When Cathay Pacific, the Hong Kong-based international airline, began its Vancouver-Hong Kong service in 1984, it anticipated slow traffic growth. But traffic increased dramatically. And on July 1, the airline introduced one-stop U.S.-Hong Kong service five times a week from San Francisco.

‘Solid Increases’

“We look at the potentials for practically every country in the Pacific basin as showing 10-year curves of solid increases,” said Colin Marshall, chief executive of British Airways.

That may explain why United Airlines was so happy to part with $750 million earlier this year when it bought Pan American’s Pacific division. “We couldn’t be happier with the new routes,” United spokesman Chuck Novak said, “because it gives us the opportunity to promote travel to the Pacific and Asia in all 50 U.S. states.”

In Hong Kong, United’s arrival meant its operations quadrupled overnight. About 150 Pan Am employees were absorbed by United, and work quickly began on refurbishing, repainting and, in many cases, re-configuring the Pan Am planes that United acquired.

“There is a lot of work to be done,” said Ben Lau, United’s regional sales manager for Southeast Asia, “but we want to make things right as we enter the Pacific market. Otherwise, people will say that we just changed the bottle and not the wine.”

The interior cabin work on United’s planes includes everything from replacing seats, carpets and galleys to ripping out the 8-millimeter in-flight entertainment systems and replacing them with state-of-the-art video units.

A Formidable Task

Marketing United to 13 destinations in the Pacific and Asia was another formidable task, since United must compete with nine government-owned and subsidized airlines in the region. However, the airline’s Mileage Plus frequent-traveler program has helped attract passengers. (Foreign airlines are moving quickly to establish or revamp frequent-flyer programs.)

Other carriers in the Pacific and Asia are looking carefully at United’s entry. Singapore Airlines has increased service to the United States, and Japan Airlines is re-evaluating its schedules.

“On a service level, we are not worried,” said Chatrachai Bunya-Ananta, executive vice president of Thai Airways International.

But he does admit that Thai is looking carefully at revamping its marketing strategy to appeal to more Americans. “The demographics are changing,” he said. “Now, younger people from America are more interested in coming here.”

Thai has begun offering heavily discounted promotional fares. (One offers air fare and 10 days in Thailand with hotels for only $999 round-trip from Seattle.)

“But the one thing that hasn’t died,” he reported, “is the American habit of demanding to visit 21 places in 22 days. Americans want value for their dollars, but we hope they will understand that this is not the way to see our country appropriately. They need to take the time to comprehend the cultural differences.”

On the Welcome Wagon

Still, he welcomes United. “I’m looking forward to United and their visibility in the U.S. They will do a lot to promote this area and bring it to the attention of Americans.”

In the last few weeks, two additional Asian airlines have begun service to the United States.

All Nippon Airways, which controls 55% of domestic air travel in Japan, just inaugurated service between Tokyo and Washington as well as Los Angeles and Tokyo.

“We don’t have a recognizable name in America yet,” said Koji Yamashita, ANA’s regional manager for the Western United States. “But we’re facing a growth factor in the Pacific of 75%. That’s amazing. Especially when you compare it to the trans-Atlantic, European routes.”

ANA, which hopes to extend its service with flights to San Francisco and New York, is offering some very low air fares to Tokyo from the United States. Until October, if you purchase your ticket one month in advance and stay at least 14 days, a round-trip ticket from Los Angeles to Japan will run $927. From Washington, the fare is $1,305. Starting in late October, the fares on the same routes drop to $851 and $1,229 respectively. The airline also owns 18 hotels throughout Japan and will soon announce low cost air-land combinations.

Promotional Fares

Right on the tail of ANA to Asia is Malaysian Airlines System (MAS). The airline wasted no time in announcing attractive promotional fares to coincide with the inauguration of service to Los Angeles late last month.

The airline commenced its twice-weekly flights to Tokyo and Kuala Lumpur on July 31, using new Boeing 747-300 stretched-upper-deck (SUD) aircraft.

“We’ve been planning this move for two years,” said Rashid Khan, vice president of MAS. “The biggest potential travel market is in the Pacific Rim, and we feel that Malaysia will play a very big part in this high-growth area.”

Not surprisingly, MAS has been heavily promoting seven new Golden Holiday air-and-land packages to Asia from their first U.S. gateway, Los Angeles.

A special 10-day tour, with stops in Kuala Lumpur, Penang and Singapore, costs only $1,090, including hotels, transfers and sightseeing. A 15-day package, with stops in Kuala Lumpur, Penang, Bangkok and Singapore costs $1,495.

Heavy Discounting

Already, there is heavy discounting on many U.S.-Pacific and U.S.-Asia routes. The new Continental flight from New York to Sydney, for example, costs $1,298 round-trip. The ticket requires no advance purchase, there is no minimum or maximum stay, and seats are not limited. And the ticket provides for free stopovers in Tahiti, Auckland, Honolulu and Fiji.

The discounts to Asia and the Pacific are continuing. In fact, when American recently petitioned for a Dallas-Los Angeles-Tokyo route, it advised the U.S. Department of Transportation that if awarded the route it would “participate vigorously in below-tariff discounting.”

With that marketing attitude, U.S. travelers who want to discover the Pacific and Asia may be able to save enough money on air fares to enjoy the destinations once they get there.