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How Does An Airline Establish A HUB  
User currently offlineFL370 From United States of America, joined Apr 2006, 252 posts, RR: 0
Posted (7 years 11 months 1 week 1 day 2 hours ago) and read 3491 times:

when an airline is started up, they have to have a headquaters in most cases the HUB is near the headquaters. for example UA has a hub in SFO, LAX, DEN, ORD, IAD. how do they get all those gates? and if the airport denies them, what would they do next? for UA in ORD and DEN, they have an entire terminal to themselves, wouldn''t that anger other airlines trying to get gates at that airport?

what are some key steps in finding an airport and than clasify that aiport as their hub?




fl370

19 replies: All unread, jump to last
 
User currently onlineStitch From United States of America, joined Jul 2005, 31393 posts, RR: 85
Reply 1, posted (7 years 11 months 1 week 1 day 2 hours ago) and read 3482 times:
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I imagine hubs build over time, as more and more traffic is concentrated to that airport and the airline expands it's operations to accomodate them. That being said, hubs are not accidental. Airlines deliberately choose "focus cities" where they concentrate their connecting operations in and these eventually can grow into hubs.

The airport authorities most likely are in favor of hubs, because it is a guaranteed and stable source of income for them. As such, the airports are more willing to dedicate large numbers of gates - and even entire concourses and terminals - to airlines wishing to hub there.


User currently offlineSkyexramper From , joined Dec 1969, posts, RR:
Reply 2, posted (7 years 11 months 1 week 1 day 1 hour ago) and read 3437 times:

Find a bunch of gates, airplanes and people then create a bunch of flights that are routed through that airport.

User currently offlinePanAm747 From United States of America, joined Feb 2004, 4242 posts, RR: 8
Reply 3, posted (7 years 11 months 1 week 1 day 1 hour ago) and read 3434 times:

For the "legacy" airlines, the modern hub structure came about where there were already significant routes.

http://www.airchive.com

If you look here and see some of the older route maps, you will see for example that United has always had significant operations in California (especially the central valley), Denver, and Chicago. American, Continental, and Braniff all were big in Texas, and Northwest in the former "Northwest Territories" of the United States, meaning west of the Appalachians, north of the Ohio River, and east of the Mississippi.

The hub system didn't really start, however, until after the airline deregulation act of 1978. Braniff is considered to have started it by way of concentrating all of their services at the new DFW airport. Other airlines followed suit, and very quickly everybody signed long-term agreements at specific airports in which to funnel all their traffic.

JetBlue is an airline that took over domestic services from PA and TW when they scaled back from JFK - they determined there was a market, and went with it.

This may be a bit of an oversimplification on my part - each airline has its own unique story - but it's a start. Best of luck in your research!!



Pan Am:The World's Most Experienced Airline - P(oor) S(ailor's) A(irline): San Diego's Hometown Airline-Catch Our Smile!
User currently offlineSteeler83 From United States of America, joined Feb 2006, 9268 posts, RR: 21
Reply 4, posted (7 years 11 months 1 week 1 day ago) and read 3363 times:

Quoting PanAm747 (Reply 3):
http://www.airchive.com

It says "forbidden access???"



Do not bring stranger girt into your room. The stranger girt is dangerous, it will hurt your life.
User currently offlineDtwclipper From , joined Dec 1969, posts, RR:
Reply 5, posted (7 years 11 months 1 week 1 day ago) and read 3340 times:

Quoting PanAm747 (Reply 3):
If you look here and see some of the older route maps, you will see for example that United has always had significant operations in California (especially the central valley), Denver, and Chicago. American, Continental, and Braniff all were big in Texas, and Northwest in the former "Northwest Territories" of the United States, meaning west of the Appalachians, north of the Ohio River, and east of the Mississippi.

CO's Texas operation is the result of them being taken over by Texas International (Texas Air Corporation). Prior to that, CO was HQ'd in LA and Denver.

Quoting PanAm747 (Reply 3):
JetBlue is an airline that took over domestic services from PA and TW

This is a bit of a stretch. Neither PA or TW really had a domestic hub at JFK. Both airlines fed their respective international operations, and really did not serve the domestic market out of JFK save for their NY-CA flights.


User currently offlinePanAm747 From United States of America, joined Feb 2004, 4242 posts, RR: 8
Reply 6, posted (7 years 11 months 1 week 23 hours ago) and read 3302 times:

Quote:
This is a bit of a stretch. Neither PA or TW really had a domestic hub at JFK. Both airlines fed their respective international operations, and really did not serve the domestic market out of JFK save for their NY-CA flights.

True, but it was the main way to get a non-stop or one-stop to New York. I should have said, "JetBlue determined that in the late 1990's/early 2000's a market DEVELOPED for O&D travel to JFK".



Pan Am:The World's Most Experienced Airline - P(oor) S(ailor's) A(irline): San Diego's Hometown Airline-Catch Our Smile!
User currently offlineAADC10 From United States of America, joined Nov 2004, 2103 posts, RR: 0
Reply 7, posted (7 years 11 months 1 week 22 hours ago) and read 3238 times:

According to an old UA employee handbook, UA's largest hubs were established by default under the regulation era, including ORD (MDW), DEN and SFO. The old mail carrier routes that they had established passed through those cities. LAX (BUR) was only labeled a hub in the 1990s but has been a key destination for UA since the 1930s. Only at IAD did UA deliberately set out to establish a hub. Even then UA had some history there, after the acquisition of Washington D.C. based Capital Airlines in 1961.

IAD was a real backwater airport until UA started building their hub. Zone restrictions forced transcons to use the the remote IAD but most shorter O&D flights favored DCA.

Quoting FL370 (Thread starter):
how do they get all those gates?

Airports are financed by airline and passenger fees and leases. Every time an airport or major terminal addition is built, they are constructed with prospective tenants in mind. At every one of UA's hubs, they were a major carrier in that city before the airport or major terminal addition was built. Even at IAD, "temporary" Terminal C/D was built in part to accommodate UA's buildup there. The same is true of most other hubs. Only a few have been created after deregulation and they tend to be the smallest hubs.


User currently offlineIsitsafenow From United States of America, joined Feb 2004, 4984 posts, RR: 23
Reply 8, posted (7 years 11 months 1 week 22 hours ago) and read 3213 times:

To establish a hub, I would say you need...
1. a market(pax)
2. geographic local
3. parallel runways
4. a bunch of unused gates or cut a deal with the city to add gates
safe



If two people agree on EVERYTHING, then one isn't necessary.
User currently offlineAirzim From Zimbabwe, joined Jun 2001, 1238 posts, RR: 1
Reply 9, posted (7 years 11 months 1 week 21 hours ago) and read 3181 times:

Quoting AADC10 (Reply 7):
IAD was a real backwater airport until UA started building their hub. Zone restrictions forced transcons to use the the remote IAD but most shorter O&D flights favored DCA.

True but New York Air did have a hub at Dulles prior to United establishing one there. If memory serves, United and Continental had an agreement that Continental would pull New York Air out of Dulles, while at the same time United scaled back their Cleveland hub. Resulting in a swap since UA needed an East Coast hub, and CO was looking for a Midwest one. Not sure if it's true though.

Interestingly enough, Southwest doesn't have any 'hubs' in the traditional sense. They do have large focus cities, where many point-to-point markets converge. And while they may act as a hub, it certainly isn't called one.

I still beg to differ about JFK being a hub for jetBlue. How many pax really connect through JFK on B6?


User currently onlineViscount724 From Switzerland, joined Oct 2006, 25988 posts, RR: 22
Reply 10, posted (7 years 11 months 1 week 19 hours ago) and read 3103 times:

Quoting Steeler83 (Reply 4):
Quoting PanAm747 (Reply 3):
http://www.airchive.com

It says "forbidden access???"

Same problem here. I hope it's a temporary glitch as airchive.com is an excellent site if you're interested in airline trivia, old timetables, brochures, advertising etc. I just sent an e-mail to the person who maintains the site as have communicated with him a few times in the past when I have occasionally spotted errors etc. He has always responded promptly.


User currently offlineFlyibaby From United States of America, joined Aug 2004, 1017 posts, RR: 6
Reply 11, posted (7 years 11 months 1 week 19 hours ago) and read 3084 times:

Quoting Airzim (Reply 9):
I still beg to differ about JFK being a hub for jetBlue. How many pax really connect through JFK on B6?

It frankly doesn't matter how many passengers connect, in fact airlines actually want around 65-70% of the passengers to be O&D as it is more profitable. Fact is, that passengers are able to connect to other flights thru JFK thus making use of the hub/spoke system. Do you think all the passengers from BUF, ROC, BVT all want to go to JFK? Chances are no...alot probably are headed down to FLL.


User currently offlineJRadier From Netherlands, joined Sep 2004, 4722 posts, RR: 50
Reply 12, posted (7 years 11 months 1 week 19 hours ago) and read 3040 times:

Quoting Isitsafenow (Reply 8):
To establish a hub, I would say you need...
1. a market(pax)

Not really, look at KL/AMS but even more so EK/DXB and SQ/SIN who are relying on transfer passengers.



For once you have tasted flight you will walk the earth with your eyes turned skywards, for there you have been and ther
User currently offlineGunsontheroof From United States of America, joined Jan 2006, 3509 posts, RR: 9
Reply 13, posted (7 years 11 months 1 week 18 hours ago) and read 3030 times:

Quoting JRadier (Reply 12):

Not really, look at KL/AMS but even more so EK/DXB and SQ/SIN who are relying on transfer passengers.

You're saying that AMS, DXB and SIN aren't lucrative markets for airlines? I'd disagree...Of course they'd have much less service without hub ops, but that's true of any hub in the world.



Next Flight: 9/17 BFI-BFI
User currently offlineJRadier From Netherlands, joined Sep 2004, 4722 posts, RR: 50
Reply 14, posted (7 years 11 months 1 week 18 hours ago) and read 3013 times:

Quoting Gunsontheroof (Reply 13):

You're saying that AMS, DXB and SIN aren't lucrative markets for airlines? I'd disagree...Of course they'd have much less service without hub ops, but that's true of any hub in the world.

Not especially, no. Without hubs there, there would be a lot less traffic. For example, a recent North America bound KLM flight I was on. 10 people booked in business class, 228 in economy. Of those people only 1/19 got on in AMS, the rest was all connecting traffic.



For once you have tasted flight you will walk the earth with your eyes turned skywards, for there you have been and ther
User currently offlineSteeler83 From United States of America, joined Feb 2006, 9268 posts, RR: 21
Reply 15, posted (7 years 11 months 1 week 18 hours ago) and read 3008 times:

Quoting Isitsafenow (Reply 8):
4. a bunch of unused gates or cut a deal with the city to add gates

Or whoever is in charge of that given airport. It's not always the cities themselves that run airports. But I think you know that. I didn't know that before joining here though  Smile

Quoting Flyibaby (Reply 11):
Do you think all the passengers from BUF, ROC, BVT all want to go to JFK? Chances are no...alot probably are headed down to FLL.

And how about if they want to connect out west like travel to LAS, BUR, OAK... Although I believe WN could offer just as good a connection opportunity through LAS, MDW, BWI or other airports of the type... I know that WN serves Buffalo, not sure about the other markets though...



Do not bring stranger girt into your room. The stranger girt is dangerous, it will hurt your life.
User currently offline2travel2know From Panama, joined Apr 2005, 3580 posts, RR: 4
Reply 16, posted (7 years 11 months 1 week 18 hours ago) and read 2952 times:

Quoting Isitsafenow (Reply 8):
To establish a hub, I would say you need...
1. a market(pax)
2. geographic local
3. parallel runways
4. a bunch of unused gates or cut a deal with the city to add gates
safe

PTY is a hub, but PTY O/D pax in most of their routes are very low. So depending on #2 and adding "progressive airline management" one doesn't necesarily needs lots of pax.



I don't work for COPA Airlines!
User currently offlineJcavinato From United States of America, joined Jan 2005, 520 posts, RR: 0
Reply 17, posted (7 years 11 months 1 week 16 hours ago) and read 2907 times:

In the mid-70s I was teaching transportation economics and management at the University of Georgia. I invited some Delta execs to come speak to my classes and student club. Their presentation was about how Delta has a hub in Atlanta. Passengers can go from Dallas to New York through their hub in Atlanta. They talked about how they marketed end-to-end point markets in local newspapers and judiciously scheduled inbound and outbound flights at Atlanta to make it all work.

This was before the 1978 first steps into deregulation, but they had it figured out ahead of many other carriers.

In the back of my mind I always thought their use of the term hub became the industry wide term later on.


User currently offlinePlanespotting From United States of America, joined Apr 2004, 3539 posts, RR: 5
Reply 18, posted (7 years 11 months 1 week 16 hours ago) and read 2890 times:

You just have to remember that airlines and the current system of airlines didn't start up just over night...there was no "airline-big-bang" where one day there were no airlines and no hubs and then the next there were airlines and hubs, which seems to be the way you're interpreting it.


Do you like movies about gladiators?
User currently offlineJcavinato From United States of America, joined Jan 2005, 520 posts, RR: 0
Reply 19, posted (7 years 11 months 1 week 16 hours ago) and read 2856 times:

Planespotting, you're right. It was an evolution and incremental moves. In the mid and late 70s Eastern had what everyone today would call a hub in Atlanta as well. I'm not sure who copied whom, but in today's world they would be called hubs.

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