SFO International Gateway Forum China Market Development December 4, 2014
United at San Francisco
United is proud to be the leading airline serving San Francisco #1 in daily flights, destinations served 80+ non-stop destinations 20+ international non-stop destinations Over 200 daily departures Expanded global access via partners 3
San Francisco is United s primary gateway hub to Asia United provides non-stop service from San Francisco to 10 airports in 9 cities in the Asia / Pacific region Airport City, Country CTU Chengdu, China PEK ICN CTU PVG KIX HKG TPE TYO HKG ICN KIX PEK Hong Kong Seoul, S. Korea Osaka, Japan Beijing, China PVG Shanghai, China TPE Taipei, Taiwan TYO/HND Tokyo (Haneda airport), Japan United route from SFO SYD TYO/NRT SYD Tokyo (Narita airport), Japan Sydney, Australia 4
United s San Francisco hub is the industry s leading gateway to the Asia / Pacific region Largest Pacific Gateway Hubs (Includes Joint Venture Services) SEA Delta Hub 6 destinations 6 daily flights SFO LAX United Hub 9 destinations 10 daily flights United Hub 5 destinations 6 daily flights 5
China Market Trends
Asia / Pacific is one of the largest sources of inbound air travel to San Francisco, and is growing 20% Offshore Point-of-Sale To San Francisco (Inbound Travel) 15% Latin Mexico 3 Year CAGR 10% 5% Caribbean Asia/Pacific Atlantic 0% (5%) Canada 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Daily Passengers Each Way 7
China is the largest inbound market with the highest growth rate 35% 30% Offshore Point-of-Sale To San Francisco (Inbound Travel, Top 20 Source Countries) China 3 Year CAGR 25% 20% 15% 10% 5% 0% (5%) (10%) Brazil Hong Kong Mexico South Korea France Singapore Taiwan Denmark Switzerland Australia Netherlands Italy Philippines Spain India Japan Germany United Kingdom Canada 0 100 200 300 400 500 600 700 800 900 Passengers Daily Each Way 8
China s economy continues to grow Real GDP Growth 2011-2015 (Percent Change From Previous Period) 8.2 5.4 3.0 1.7 2.4 World Advanced Economies Emerging Markets US China 9
Inbound travel from China is increasing Point-of-Sale Split: China POS vs. US POS (For Air Travel Between San Francisco and China) China inbound demand greater than SFO outbound 103% 113% 122% 73% 56% SFO outbound demand greater than China inbound 2010 2011 2012 2013 YEJul14 10
Demand for air travel from China is developing at varying rates across the country Most Populous Cities in China Propensity to Travel US Air Travel Rank 11 10 9 8 7 6 5 4 3 2 1 Low propensity to travel Tianjin Chongqing Beijing Shanghai Nanjing Shenzhen Wuhan Shenyang Guangzhou Chengdu High propensity to travel 1 2 3 4 5 6 7 8 9 10 11 Population Rank 11
Air Service Development
The US industry has been slower to develop service to China than the European industry 10 8 6 4 2 0 Chinese destinations served by EU carriers WUH SHE XMN HGH NKG CTU CAN PVG PEK 3 2 1 0 Chinese destinations served by US carriers 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 CTU PVG PEK 13
From the US, United has been the pioneer in developing service to China Number of Nonstop Routes to China 10 9 American United Delta LAXPVG SFOCTU 8 EWRPVG 7 IADPEK 6 5 4 SFOPVG SFOPEK ORDPEK SFOPEK ORDPVG EWRPEK 3 2 1 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 14
United is well established within China Over 30 sales professionals based in China Sales offices located in four major cities Relationship with over 500 major agencies across all provinces 15
United offers unparalleled service from China to San Francisco Beijing (PEK) Daily 747-400 2,618 weekly inbound seats Shanghai (PVG) Daily 747-400 2,618 weekly inbound seats Chengdu (CTU) 3x weekly 787-8 657 weekly inbound seats United offers nearly 5,900 weekly inbound seats from China 16
United carries the most China-originating inbound traffic to the San Francisco market Share of China SFO Traffic United 34% Air China China Eastern 19% 24% Cathay Pacific 6% Remainder 17% United flies over 1,700 inbound passengers from China to the local San Francisco market every week 17
Air China partnership extends reach beyond gateways Beijing Chengdu Shanghai Gateway city Air China operated / United marketed flight In cooperation with Air China, United markets and sells flights to 27 Chinese markets beyond Beijing, Shanghai, and Chengdu 18
United s San Francisco hub provides an unrivaled platform for service to Asia / Pacific Hub Connectivity Schedule depth supports service breadth Fleet Flexibility Fly the right plane in the right market High Demand, Trunk Routes 35+ Markets Connecting To Asia Bank New, Developing Routes 19
Continued investment in overall travel experience New Terminals New United Clubs Wi-Fi Personal Device Entertainment Food and Beverage Enhancements 20
United plans to expand service to China from San Francisco in summer 2015 PVG SFO Pending government approvals 21
Community partnership is vital to maintain momentum Maintain and promote an attractive market Remain cost conscious Support your hub airline! 22
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