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Effect Of Airline Foldings On Hub Cities  
User currently offlineSoxfan From United States of America, joined Mar 2008, 863 posts, RR: 0
Posted (5 years 10 months 4 weeks 8 hours ago) and read 3967 times:

Hi Everyone,

I've read several threads denouncing United and US Airways for a series of decisions (i.e. charging for drinks, transatlantic BOB, etc.) and some have called for them to go out of business. My question is, if the airlines WERE to go out of business, how bad an effect would this have on their hub cities? With UA, I'm assuming that Denver and possibly San Francisco and Washington IAD would be the hubs most affected (detrimentally). Los Angeles and Chicago (and possibly San Francisco) might not be as hurt because of the large presence of American Airlines. With US, Philadelphia would be affected the most, as I believe US is its predominant carrier. Also, how much of an effect would it have on large focus cities such as Boston and New York (JFK and LaGuardia)? With almost all major US airlines trying to reduce capacity, could other airlines be able to step in and fill the gap, and if so, which ones?

Thanks for your thoughts and comments!

Soxfan  Smile


Pilot: "Request push, which way should we face?" JFK Ground: "You better face the front, sir, or you'll scare the pax!"
34 replies: All unread, showing first 25:
 
User currently onlineOzarkD9S From United States of America, joined Oct 2001, 4976 posts, RR: 21
Reply 1, posted (5 years 10 months 3 weeks 6 days 11 hours ago) and read 3792 times:

In the case of a UA collapse I would guess that SFO and IAD would be the two airports other legacies would be salivating over. As you stated, AA's presence at ORD would be scare off any of the other legacies from building a hub there. And looking at the remaining legacies, only US or CO would consider and ORD hub complimentary to their existing network. LAX would most likely see the remaining large players increase service where possible, tho LAWA might see an opportunity to consolidate northside operators to the southside and get the reconfiguration of the terminal complex going.

In the case of a US collapse, PHL would most likely see a quick build up from WN to scare off anyone else. CLT might be of interest to AA, CO or UA, or they might see it as one of those mid-sized hubs that they've already downsized and have no intention of wasting resources rebuilding. The facilities and slots at DCA and LGA, and the gates at BOS would probably start a feeding frenzy the likes that haven't been seen since the cherry-picking of Eastern and Pan Am.



Next Up: STL-LGA-RIC-ATL-STL
User currently offlineA330323X From United States of America, joined Oct 2003, 3039 posts, RR: 44
Reply 2, posted (5 years 10 months 3 weeks 6 days 11 hours ago) and read 3767 times:



Quoting OzarkD9S (Reply 1):
CLT might be of interest to AA, CO or UA, or they might see it as one of those mid-sized hubs that they've already downsized and have no intention of wasting resources rebuilding.

CLT isn't a mid-sized hub and certainly hasn't been downsized at all. It's US's largest hub by far (not PHL) and one of the largest in the country.



I'm the expert on here on two things, neither of which I care about much anymore.
User currently offlineCubsrule From United States of America, joined May 2004, 22681 posts, RR: 20
Reply 3, posted (5 years 10 months 3 weeks 6 days 9 hours ago) and read 3704 times:



Quoting OzarkD9S (Reply 1):
CLT might be of interest to AA, CO or UA, or they might see it as one of those mid-sized hubs that they've already downsized and have no intention of wasting resources rebuilding.

I wonder if CLT is too close to IAD for UA to be interested. I can see it filling a role for CO or AA, though.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineA330323X From United States of America, joined Oct 2003, 3039 posts, RR: 44
Reply 4, posted (5 years 10 months 3 weeks 6 days 9 hours ago) and read 3706 times:

Quoting Cubsrule (Reply 3):
I wonder if CLT is too close to IAD for UA to be interested.

UA certainly loved CLT when they tried to buy US back in the day.  

They were even going to add CLT-AUA/AUS/BGI/PDX/SAT/SJC/SMF/SNA, most of which US has since added itself.

[Edited 2008-08-20 16:25:25]


I'm the expert on here on two things, neither of which I care about much anymore.
User currently onlineOzarkD9S From United States of America, joined Oct 2001, 4976 posts, RR: 21
Reply 5, posted (5 years 10 months 3 weeks 5 days 20 hours ago) and read 3531 times:



Quoting A330323X (Reply 2):


CLT isn't a mid-sized hub and certainly hasn't been downsized at all. It's US's largest hub by far (not PHL) and one of the largest in the country.

I wasn't implying that US had downsized CLT. I meant that OTHER carriers might not see CLT as a potential hub due to the local market's size being roughly similar to PIT/STL etc...hubs that have been downsized already.



Next Up: STL-LGA-RIC-ATL-STL
User currently offlineAWACSooner From United States of America, joined Jan 2008, 1878 posts, RR: 1
Reply 6, posted (5 years 10 months 3 weeks 5 days 19 hours ago) and read 3515 times:

As far as their hub cities are concerned, WN would be the first to make a MASSIVE move into all those cities, probably followed by the likes of B6, DL and AA. Remember what WN did at MDW when Midway Airlines (mk. I) went under?

User currently offlineAtlanta From United States of America, joined Jun 2008, 473 posts, RR: 1
Reply 7, posted (5 years 10 months 3 weeks 5 days 18 hours ago) and read 3445 times:



Quoting OzarkD9S (Reply 1):
The facilities and slots at DCA and LGA, and the gates at BOS

I could see the LaGuardia slots being retired due to congestion, and I'm sure DL would snap up the shuttle routes and would love to have the shuttle to themselves...

Atlanta



Welcome To The New Delta- The World's Largest Airline
User currently offlineCubsrule From United States of America, joined May 2004, 22681 posts, RR: 20
Reply 8, posted (5 years 10 months 3 weeks 3 days 17 hours ago) and read 3300 times:



Quoting OzarkD9S (Reply 5):

I wasn't implying that US had downsized CLT. I meant that OTHER carriers might not see CLT as a potential hub due to the local market's size being roughly similar to PIT/STL etc...hubs that have been downsized already.

OTOH, PIT and STL are arguably located in better-served regions of the country and CLT is growing, something neither Pittsburgh nor St. Louis is really doing.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineCXA330300 From South Africa, joined May 2004, 1560 posts, RR: 2
Reply 9, posted (5 years 10 months 3 weeks 3 days 16 hours ago) and read 3278 times:

Perhaps we might see an AS expansion at SFO in the case of a UA collapse-and F9 will probably be in a lot better shape for DEN.

As for the collapse of US, perhaps CO might go into Phoenix?



The sky is the limit as long as you can stay there
User currently offlinePanAm747 From United States of America, joined Feb 2004, 4242 posts, RR: 9
Reply 10, posted (5 years 10 months 3 weeks 3 days 16 hours ago) and read 3262 times:

The main reason for choosing a location for a hub city is that there be a large amount of O&D traffic. Unfortunately, some cities simply do not have enough anymore to sustain a truly profitable hub.

Las Vegas, Pittsburgh, Cincinnati, Memphis, St Louis, Nashville, and the Raleigh-Durham area can support large numbers of flights at their airports; however, a true hub at these locations cannot be sustained. Places like the Twin Cities not only survive but actually thrive and expand due to unique geographical locations AND a diverse economic base with many major companies headquartered in the area. The Twin Cities are the 16th largest metro area and St Louis is the 18th, however, the economic base of the cities are completely different, which partially explains why St Louis is no longer a hub for any airline. Yes, I know AA considers it one, but the level of service isn't anywhere near what constitutes a true hub.

In many cases airlines such as Air Tran and Southwest will step in and fill the void. It is quite possible that CVG and MEM may see new service if and when DL/NW scales back service even further.



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 offlineCubsrule From United States of America, joined May 2004, 22681 posts, RR: 20
Reply 11, posted (5 years 10 months 3 weeks 3 days 16 hours ago) and read 3234 times:



Quoting PanAm747 (Reply 10):
The Twin Cities are the 16th largest metro area and St Louis is the 18th, however, the economic base of the cities are completely different, which partially explains why St Louis is no longer a hub for any airline. Yes, I know AA considers it one, but the level of service isn't anywhere near what constitutes a true hub.

...but if STL had the competitive environment MSP has, couldn't it be a true hub?

And what is a true hub, anyway?



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineStarAlliance38 From United States of America, joined Jan 2008, 1445 posts, RR: 3
Reply 12, posted (5 years 10 months 3 weeks 3 days 15 hours ago) and read 3195 times:



Quoting A330323X (Reply 4):
UA certainly loved CLT when they tried to buy US back in the day.

Who doesn't love CLT Big grin



Roar, lion, roar
User currently offlineLoneStarMike From United States of America, joined Jul 2000, 3811 posts, RR: 34
Reply 13, posted (5 years 10 months 3 weeks 3 days 15 hours ago) and read 3164 times:



Quoting PanAm747 (Reply 10):
The main reason for choosing a location for a hub city is that there be a large amount of O&D traffic. Unfortunately, some cities simply do not have enough anymore to sustain a truly profitable hub.

Las Vegas, Pittsburgh, Cincinnati, Memphis, St Louis, Nashville, and the Raleigh-Durham area can support large numbers of flights at their airports; however, a true hub at these locations cannot be sustained.

So are you saying that LAS doesn't have a large amount of O&D traffic? I always thought they did.

LoneStarMike


User currently offlineMKE22 From United States of America, joined Nov 2007, 1129 posts, RR: 2
Reply 14, posted (5 years 10 months 3 weeks 3 days 14 hours ago) and read 3133 times:



Quoting OzarkD9S (Reply 1):
CLT might be of interest to AA, CO or UA,

I'd say most likely UA. AA already has MIA, and CO has IAH. Why would those 2 want another Southeast hub? I'd say maybe AA would have interest, but probably not CO IMO.



If Your not pissed, your not trying
User currently offlineTheSonntag From Germany, joined Jun 2005, 3473 posts, RR: 29
Reply 15, posted (5 years 10 months 3 weeks 3 days 14 hours ago) and read 3125 times:

Well, if LH went bust, this would be a catastrophic disaster for FRA and the German economy. I guess the situation is a little bit different in the US, but certainly it wouldn't be good. The key factor is, how fast could the competition fill the gap. In the US, this is possible, because the internal market is so large. In Europe, where most countries still have their own legacy carrier, this is more difficult, as traffic rights for international flights are harder to get.

Aliatlia is a good example. The airline is in bad state for many years already, but it still exists, especially because of huge subsidies by the government, which intervened to avoid such a situation.


User currently offlineBmacleod From Canada, joined Aug 2001, 2231 posts, RR: 0
Reply 16, posted (5 years 10 months 3 weeks 3 days 14 hours ago) and read 3116 times:

UA shuts down:

IAD DEN SFO - UA has most of traffic. CO would be very attracted to DEN. AA or DL might take root in IAD. AS would fight hard for a SFO hub....

US Air shuts down:

PHL - another opportunity for AA. Too close to EWR for CO...

CLT - CO might take a grab here but DL would be very interested as well.



The engine is the heart of an airplane, but the pilot is its soul.
User currently offlineAdam T. From United States of America, joined Jun 2000, 957 posts, RR: 6
Reply 17, posted (5 years 10 months 3 weeks 3 days 14 hours ago) and read 3100 times:

I've thought about this as well and I am one that does believe that UA and US are pretty much putting the final nails in their coffin. I also believe that DL and NW will merge, so keeping all of that in mind this is my opinion:

UA-
ORD- I think AA would be the dominant carrier overnight but I honestly don't see DL or CO leaving ORD for AA's to have all to themselves. I could see CO taking over the UA operations at ORD, though probably not quite as strong as UA's operations have been there.
DEN- I see CO taking this, though with a reduced capacity than UA currently serves, expect Frontier to possibly grow more.
SFO -DL, CO, and AA will duke it out for SFO. I think AA will have a stronger chance at getting LAX though so ultimately I see it between DL and CO.
LAX- DL and AA will battle this one out....I don't see CO building up anything at LAX.
IAD - Because EWR is so close I don't see CO in this mix at all.....its between DL and AA.

US-
CLT - Continental's without a doubt in my mind - it will serve a gap in the southeast that neither EWR, CLE, or IAH has been able to serve, plus CO gets even more north to south traffic along the east coast. Plus, CLT is already set up as a Star Alliance gateway (well sort of).
PHL - who knows? It's nestled in between NYC and Washington DC, I think DL would probably have a strong operation there but no large massive hub that we've seen with US. PHL though shouldn't be completely ignored because it is such a large area and its European routes are profitable from what I hear.
PHX- Southwest will eat PHX up with other legacies increasing service. AA may add it as a focus city but that's about it.
DCA/LGA/BOS - Like someone else said, all carriers will be in a bidding war for US' operations at these airports.

I think Southwest and JetBlue will also play a role in filling in the slots, maybe even one of them starting a new hub.


User currently offlineLAXdude1023 From India, joined Sep 2006, 7481 posts, RR: 25
Reply 18, posted (5 years 10 months 3 weeks 3 days 14 hours ago) and read 3098 times:



Quoting MKE22 (Reply 14):
I'd say most likely UA. AA already has MIA, and CO has IAH. Why would those 2 want another Southeast hub? I'd say maybe AA would have interest, but probably not CO IMO.

I wouldnt call MIA a Southeast hub. MIA's locale makes it perfect for International connections, but horrible for domestic connections. DFW works pretty well, but its not East enough to serve as a true Southeast hub. CLT would be great in AA's network. CLT is going to be fine even if US goes under, someone will want it. Dont know if the same can be said for their other hubs. PHL has good local traffic to Europe, so someone will be flying the gaps that US leaves if they go under, but as a hub, im not too sure.



Stewed...Lewd...Crude...Irreverent...Belligerent
User currently offlineMAH4546 From Sweden, joined Jan 2001, 32578 posts, RR: 72
Reply 19, posted (5 years 10 months 3 weeks 3 days 14 hours ago) and read 3086 times:



Quoting MKE22 (Reply 14):

I'd say most likely UA. AA already has MIA, and CO has IAH. Why would those 2 want another Southeast hub? I'd say maybe AA would have interest, but probably not CO IMO.

MIA isn't a Southeast hub.

AA would love CLT.



a.
User currently offlineSLCUT2777 From United States of America, joined Dec 2005, 4019 posts, RR: 11
Reply 20, posted (5 years 10 months 3 weeks 3 days 14 hours ago) and read 3086 times:



Quoting Bmacleod (Reply 16):
UA shuts down:

IAD DEN SFO - UA has most of traffic. CO would be very attracted to DEN. AA or DL might take root in IAD. AS would fight hard for a SFO hub....

US Air shuts down:

PHL - another opportunity for AA. Too close to EWR for CO...

CLT - CO might take a grab here but DL would be very interested as well.

CO would no doubt be interested in DEN, but likewise I think DL would look at making a move since DEN is a much larger local market than SLC. DEN has actually wanted DL to move the SLC hub there since the DIA facility was being planned. I don't think DL would be interested at all in CLT if US went kaput. Much too close to ATL.



DELTA Air Lines; The Only Way To Fly from Salt Lake City; Let the Western Heritage always be with Delta!
User currently offlineCubsrule From United States of America, joined May 2004, 22681 posts, RR: 20
Reply 21, posted (5 years 10 months 3 weeks 3 days 14 hours ago) and read 3061 times:



Quoting SLCUT2777 (Reply 20):
CO would no doubt be interested in DEN, but likewise I think DL would look at making a move since DEN is a much larger local market than SLC.

Is bigger and more competitive better? That's a tough question... DL wouldn't be able to get the stranglehold it has in SLC in DEN.

Quoting SLCUT2777 (Reply 20):
I don't think DL would be interested at all in CLT if US went kaput. Much too close to ATL.

 checkmark 



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineEghansen From , joined Dec 1969, posts, RR:
Reply 22, posted (5 years 10 months 3 weeks 3 days 13 hours ago) and read 2994 times:



Quoting SLCUT2777 (Reply 20):
I think DL would look at making a move since DEN is a much larger local market than SLC

It is possible they would move, but it is not that simple. If you move a hub, you have to move crew bases and mechanics. That means hundreds to thousands of employees will have to sell their homes and move themselves. You also have problems with exit clauses on leases for terminal space at SLC. If DL moved to DEN, they could end up paying for leased space for years that they would not be using.

Quoting Bmacleod (Reply 16):
UA shuts down:

IAD - look for major expansion by jetBlue

ORD - Both jetBlue and Virgin America would probably push for expansion here. Of course, American would benefit the most.

DEN - F9 and WN would be the biggest winners here. CO would never want to go back into Denver if they have to compete with WN. It would be financial suicide.

SFO - Virgin America would push to take over United's terminal and buy its trans-pacific flights.

LAX - Virgin America and possibly jetBlue would expand here. Virgin would start trans-pacific service.

One has to remember that if United fails, Lufthansa will be the dominent member of Star Alliance. Their strategic investment in jetBlue is insurance for them against UA's continued decline.

One also has to remember that Virgin America is only an airline as far as the FAA is concerned. The whole thing is part of the Virgin Group. As the Virgin Group has made clear with their consolidation of Virgin America and V Australia as an integrated operation at LAX's terminal 3, Virgin Group operates as one global airline.


User currently offlineAdam T. From United States of America, joined Jun 2000, 957 posts, RR: 6
Reply 23, posted (5 years 10 months 3 weeks 3 days 12 hours ago) and read 2981 times:

Eghansen.....you make some great points and I wondered if the back of my mind how much a role JetBlue and Virgin America would play in a collapse of UA and or US. I agree with your points that Lufthansa would help JetBlue take over some of UA's operations where the Virgin Group would help push Virgin America into becoming a larger carrier in the USA.

User currently offlineLAXdude1023 From India, joined Sep 2006, 7481 posts, RR: 25
Reply 24, posted (5 years 10 months 3 weeks 3 days 12 hours ago) and read 2955 times:



Quoting Adam T. (Reply 23):
Virgin Group would help push Virgin America into becoming a larger carrier in the USA.

 rotfl   rotfl 

Thatll be the day!


Quoting Cubsrule (Reply 21):
Is bigger and more competitive better? That's a tough question... DL wouldn't be able to get the stranglehold it has in SLC in DEN.

DL would be foolish to leave SLC for DEN. DEN is a blood bath right now, why on earth would DL want to be a part of that?



Stewed...Lewd...Crude...Irreverent...Belligerent
25 Adam T. : LOL....well I didn't say it would be that big a carrier, but hey it could become bigger, who knows?
26 Jbernie : So other than obvious who would try to fill in the blanks in regards to traffic at the various hubs should an airline fail, what would be the economic
27 Eghansen : Virgin Group is certainly a big company ($20 billion in revenues). It also seems clear to me that Virgin Group has its eye on the Pacific market. Oth
28 LH121GLA : They have their finger in too many pies to be doing that!
29 Lightsaber : I notice in this discussion the airlines that have been the most aggressive in their expansions have been ignored. If US or UA goes under, do not expe
30 ElBandGeek : It seems CO is putting themselves in a position where they could easily snatch up any of UA's operations they want in the unfortunate event of their d
31 MasseyBrown : CO's costs are not that much lower than UA's and they are further limited in the size of RJ they can employ. CO would risk their own bankruptcy tryin
32 DeltAirlines : I think CLT will be able to maintain some form of a hub simply due to its geographic position. The Southeast is one of the fastest growing areas of t
33 Jbernie : Out of curiosity is there any value in IAD for Government contracts? At least to make it a minor hub or something? Would the community (aka politicia
34 A330323X : I don't know why people insist on believing this. NW leases to US a whopping 24 out of the 400 slots US uses at DCA.
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