United Airlines joins Qantas and Air New Zealand on Texas route. Complicates Air NZ-United JV

United Airlines' planned new Houston-Sydney nonstop 787-9 flight from 18-Jan-2018, offers United's response to recent waves of expansion in the Australia-US market from Qantas/American Airlines and then Virgin Australia (with JV partner Delta).

United's 1Q2018 size in Australia will expand 26% as a result, driving 8% growth in the market from all nonstop airlines. This potentially sets 2018 to achieve record growth - that could be further bolstered if a resubmitted American-Qantas JV is approved.

United's new flight - its second longest after Los Angeles to Singapore - follows Qantas' and Air New Zealand's links with Texas, in Dallas and Houston respectively. United serves 53 domestic US airports from Houston that it does not serve at Los Angeles and San Francisco from its existing Australian gateways. Although United will be the third operator from the American south to Australia/NZ, it is the first with a strong US point of sale in Texas.

For Air New Zealand, United's growth into Australia complicates the pair's JV. The JV excludes Australia, but Australia-US is an important transfer market for Air New Zealand, so part of Air New Zealand's business is undermined by greater US-Australia nonstop links. In the past too, spare end-to-end capacity in the Sydney market has encouraged cheap pricing for New Zealand origin traffic willing to backhaul over Sydney.