Rising In The West
Business Traveler|November 2016

North America’s Pacific Coast hubs are getting stronger as network focus shifts to Asia

Kathryn B. Creedy
Rising In The West

North American West Coast hubs have seen a lot of development in the last few years as airlines build back their networks. Beyond merely recovering from the Great Recession, carriers are emerging as profitable companies with healthy balance sheets and eyes solidly locked on the future of the trans-Pacific markets.

But the hows and whys of these West Coast hubs also contribute to a greater understanding of the changes in the industry wrought by the growth of the Asian economic tigers. These changes inform the debate on industry competitiveness, the impact on other US hubs such as Dallas Fort Worth and Chicago, and especially the importance of fifth freedom rights (the ability to carry passengers from Asian points to interior destinations) in tomorrow’s trans-Pacific market.

“Given that Asia is where the growth is, there is plenty to go around,” notes Bill Swelbar, executive vice president of transportation industry analysts InterVISTAS. “It makes good sense that the transoceanic carriers are building/ augmenting those gateways with points behind to ensure success not only to the primary Asian markets but also the secondary and tertiary market opportunities that will present themselves as aircraft designed to begin nonstop service to those points are delivered.”

But there is another factor. The emergence of mega carriers from the Middle East, compounded by industry restructuring and the recession, has eroded the competitive fundamentals for US carriers just as it has for the dominant European players.

“The carriers from the Middle East in particular are aggressive in winning traffic to Southeast Asia and Singapore and other important points away from the US carriers,” says Swelbar, adding that building the West Coast gateways “will enable better service to important traffic points and thwart the loss of Southeast Asia traffic over time.”

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