Wilax From United States of America, joined Jun 2002, 465 posts, RR: 3 Posted (12 years 7 months 4 days 15 hours ago) and read 5470 times:
If one plans to start or expand a hub-and-spoke airline, one must choose a base airport. That choice involves a central location to your planned route structure, a city with some good O&D traffic potential, and hopefully not much competition for your target markets. In the US, there are not many choices that are not already occupied by two or three major airlines. This poses the question: big city, many airlines, or small town, be the big fish.
If you look at some major US cities, you will find usually two major hub operations going on; ORD-UA,AA, PHX-HP,WN, LGA-US,DL, DFW-AA,DL. Even the dominated hubs, like ATL, Airtran flourishes, as does Frontier at DEN.
N670UW From United States of America, joined Jul 2003, 1618 posts, RR: 7
Reply 2, posted (12 years 7 months 4 days 15 hours ago) and read 5397 times:
I would say a lot depends on a city's geographical location and O&D traffic. In my mind, an airport like CVG can't support two major hubs (I hear the DL hub there is only 20% O&D). ORD can because, a) Chicago is the country's third-largest metro area (great O&D) and b) Chicago is centrally located to allow for a great deal of connections). I question whether an airport like EWR could support two major hub operations, with EWR's poor geographical location (for domestic connecting traffic anyway). EWR, I would think, relies heavily on NYC O&D and international connections.
DL and US do not hub at LGA. I guess you could call them "focus cities."
Elwood64151 From United States of America, joined Feb 2002, 2477 posts, RR: 5
Reply 3, posted (12 years 7 months 4 days 14 hours ago) and read 5359 times:
I don't think there is a "magic number". I believe it depends partly on the population of the city in question, partly on the relative income of the people in that city (DTW could never support a second major 200-flight-per-day hub, but ATL and DEN already do, and IAH probably could).
O & D traffic is important, but it's not the be-all and end-all of the business. A smaller airline will require fairly significant O & D traffic to remain profitable (look at F9), but a larger airline can make money on majority connecting traffic (look at DL in CVG).
In any event, the cities that can support dual-hubs will change over time. In 1960, Denver could barely have supported a hub. Now it supports two. MEM was a major connecting point for domestic air travel fifty years ago. Now it supports a single hub.
Those who fail to learn history are doomed to repeat it in summer school.
Jsnww81 From United States of America, joined Jan 2002, 2430 posts, RR: 14
Reply 4, posted (12 years 7 months 4 days 13 hours ago) and read 5259 times:
Even back when hubs were the 'end-all be-all' of air travel in the US, two airlines seemed to be about all the big cities could handle.
Frontier, United and Continental all hubbed at Denver Stapleton in the 1980s (even TWA gave it a go between 1978 and the early 1980s.) UA and CO were the more successful... Frontier never really got the critical mass it needed to be more than just a feeder for the big guys. Passengers could take Frontier from smaller cities (Grand Junction, Casper, Omaha, Billings) and connect to United or Continental flights to the big cities. Most of the travel agencies in Denver were loyal to United, which didn't help either. Ultimately, Frontier collapsed, and most of its fleet and Stapleton gates were absorbed by Continental.
Braniff, Delta and American had a similar go-around at Dallas/Fort Worth in the late 1970s and early 1980s. Braniff was the big dog at DFW before Deregulation, but American and Delta had more of the lucrative east-west routes that make DFW such an excellent hub. Braniff's DFW routes were mostly north-south, except for a few flights to New York, Washington and the Pacific Northwest. Although BN basically had an entire terminal and one whole side of the airport to itself, they expanded too rapidly and couldn't make the hub concept work. American came out the victor, and Delta quickly snapped up the extra capacity when BN went under. The 'new' Braniff initially tried hubbing at DFW, but eventually retreated to the less-threatening Kansas City in the mid-1980s.
Those are the big three-airline hubs I always think of. Some cities have served as major focus points for several airlines (Miami was a big base for Eastern, National and Pan Am, for instance, and Delta had a sizeable presence there; United, American, TWA and Continental all had decent-sized ops at LAX as well, but nothing I'd consider a hub.) Two airlines seems to be the magic number for a hub - although today ORD and DFW are the only true two-carrier hubs in the US.
NCLusa From , joined Dec 1969, posts, RR:
Reply 6, posted (12 years 7 months 4 days 13 hours ago) and read 5210 times:
BTW, are there any airports that serves as a hub for more than two airlines anymore?
LHR serves as hub for BA, VS and bmi. technically, it might not be a "true" hub for bmi, as there trans-continental services are offered from MAN and not LHR, but they offer connections from LHR for the Star Alliance carriers, as well as VS....
StevenUhl777 From , joined Dec 1969, posts, RR:
Reply 9, posted (12 years 7 months 4 days 12 hours ago) and read 5087 times:
All very valid replies...no arguments.
Purely from an economics standpoint...it's based on the market conditions in that particular city. Costs play a role, too...a startup may avoid the likes of ORD, SFO, LAX, etc. and opt for a nearby smaller airport with lower fees and market it as a less-hassle gateway. Some small airline in Texas chose that route about 30 years ago...can't seem to remember their name, though....
Coronado990 From United States of America, joined Oct 2003, 1675 posts, RR: 2
Reply 10, posted (12 years 7 months 4 days ago) and read 5025 times:
I'd like to see all these "big" city hubs go and give the mid-size cities a chance. MCI, IND, ICT, TUL, SDF would make good choices (and plz return CMH, RDU & BNA to hub statues). It would make more sense to have the big cities be the end of the spokes where there is a ton of O & D and the mid-size cities can act a hub facilities. Otherwise the smaller cities must ALWAYS connect thru a major crowded hub to get where they are going. It should be the other way around where a medium sized city, augmented with connecting traffic, can now support some non-stops where before they could not. Chicago needs their airport to serve their own people not someone from Sioux Falls to Syracuse.
And an airline should not depend on one or two hubs. Such as AA downsizing STL. DUMB, DUMB, DUMB!!! Things would be a lot less hectic when things go wrong such as weather problems when you can distribute your passengers more than one way. Otherwise you have to put them on rivals to get around a problem. AA was smart in making "rolling" banks at ORD and I truly thought STL was going to pick up the connecting traffic from the west to the Northeast. MCI and STL make perfect hubs. There seems to be no commitment. Go with the safe bet.
My favorite hubs are MEM, CVG, PIT, CLE, CLT and SLC for instance (MKE, hang in there). These cities would never have the non-stops they have now if it was not for connecting passengers. Chicago will always have non-stops everywhere because of their size. I guess the rich get richer and the big get bigger. What a shame!
BTW...WA used LAX as a hub with timed banks and was continued by DL for a short while. Also, I don't think WN likes to call PHX a "hub" but a "focus city".
ConcordeBoy From , joined Dec 1969, posts, RR:
Reply 11, posted (12 years 7 months 3 days 22 hours ago) and read 4877 times:
It would make more sense to have the big cities be the end of the spokes where there is a ton of O & D and the mid-size cities can act a hub facilities
Sorry bub, but you have no idea as to what you're talking about
O&D is generally of much higher yield to an airline than transfer pax. The point of a hub is to run a flight based on O&D and fill any remaining seats with lower-yielding transfer. This particularly applies to intercontinental flights. The more O&D, the more successful the hub*.
*there are exceptions. MCO and LAS generate enormous amounts of O&D, but it's mostly low-yielding leisure traffic; which is why these airports have had difficultly maintaining much in terms of intercontinental traffic despite respectively being the current 20th and 12th busiest airports in the world!
Gr8slvrflt From United States of America, joined Jan 2002, 1646 posts, RR: 10
Reply 14, posted (12 years 7 months 3 days 22 hours ago) and read 4726 times:
I can remember when Atlanta had Delta, Eastern, and Republic (Southern).
Don't forget Piedmont and ASA; they all had hub operations in Atlanta at the same time (late 70s, early 80s). Eventually Republic and Piedmont decided to stop feeding the big boys and retreated to their own, exclusive fortresses (Memphis and Charlotte). Of, course ASA became a Delta Connection partner and Eastern went away. If you include TWA, Eastern Metro, Air Atlanta, Comair, ValuJet and AirTran, and possibly Capital/United (who all had or have hub operations here), Atlanta is the all time King of Hubs!
I work for Southwest, but the views expressed are my own and do not necessarily represent those of Southwest.
Acidradio From United States of America, joined Mar 2001, 1880 posts, RR: 10
Reply 16, posted (12 years 7 months 3 days 21 hours ago) and read 4655 times:
AIRLINERS.NET CREW FORUM MODERATOR
If you go to a smaller city, chances are that you will be more likely to get incentives, subsidies and tax breaks from the local government to keep your operation there and provide jobs. Your costs stay lower that way (hopefully), you can make it your own fortress hub (by undercutting everyone else who even dares to look at you and your city) and all the while essentially have a local government pay money to create a monopoly FOR YOU.