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Trouble in the Desert? Etihad Reduces San Francisco

San Francisco (SFO) has proven to be a lucrative market for many airlines, primarily because of it’s proximity to Silicon Valley – a passenger segment that has a high purchasing power and the need to travel globally frequently.

It’s one of those head scratchers that Qatar Airways still doesn’t fly to the city, but Emirates is well entrenched in the market with two daily flights (one of which is an A380) with great connectivity through to Dubai to India, an important market from SFO. Etihad was at an immediate disadvantage given EK’s marketshare and first mover advantage but the market is so important that EY went ahead and introduced flights. And there was space for them too.

But it seems as though things aren’t working out so well for the airline. 

Etihad currently serves SFO daily with their 777-200LR aircraft (a rather small long haul aircraft by their standards) – well, not for much longer. EY will reduce flights to 3x weekly on the same type of aircraft effective February 2017. Granted, February is the slowest month for airlines in terms of load factors, but still this move does not bode well for the flight.

Etihad flies their 777 to San Francisco

Etihad flies their 777 to San Francisco

So there are a few takeaways from this (bit) surprising move from Etihad:

  • Is this a result of Air India’s new non-stop flights from India, with their announced intention to double flights given their popularity? (A massive chunk of EY’s passengers from SFO are India bound)
  • Will Emirates take advantage and double down on SFO, or will Qatar make a move and start flights of their own?
  • Etihad partners with American Airlines on many of their North American flights – will the aircraft freed up from the reduction of SFO mean possibly starting a new flight to an AA hub?

Another thing to keep in mind is that United now has non-stop flights from San Francisco to Singapore and codeshares extensively with Star Alliance partner Singapore Airlines (SQ) on their flights to India. Hell, SQ is even starting their own flights nonstop to SFO on their shiny brand new Airbus A350-900 aircraft.

There are possibly many reasons as to why Etihad is reducing frequencies to SFO – it’s very odd for one of the Middle East big three to operate non-daily flights. Frequency is key for these guys because their focus is to move as many people as possibly and do it efficiently. It also makes EY less attractive to the lucrative business traveler market because of the issue of flexibility now comes to mind.

oneworld elites in SFO, given AA’s limited operations there will be gutted – as they could earn and redeem AA miles on Etihad – but the silver lining is that oneworld airline Qatar Airways might see this as an opportunity to pounce on and start new flights into the city. Fingers crossed. 

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