Tom in NO
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Hubs: Which Airline Will Blink First?

Thu May 29, 2003 12:19 am

A Wall Street article out today discusses the current state of airline hubs, the fact there aren't enough connecting passengers to support the more than 30 hubs, and wonders which airline will be the first to "blink", and shut down a hub.

WSJ seems to think that the most likely candidates are US at PIT, CO at CLE, NW at MEM, DL at DFW, possibly even AA at STL.

The article can be seen at http://archives.californiaaviation.org/airport/msg26350.html.

Tom in NO (at MSY)
"The criminal ineptitude makes you furious"-Bruce Springsteen, after seeing firsthand the damage from Hurricane Katrina
 
prosa
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RE: Hubs: Which Airline Will Blink First?

Thu May 29, 2003 12:25 am

It's funny how the article said "even" AA's hub at STL when it listed candidates for closing. That made it sound as if STL would be the least likely to go. In fact, I would consider it among the very top candidates, as (1) it's an "inherited" hub; (2) it's too close to ORD and maybe DFW; and (3) AA has shown a willingness to close hubs when necessary, i.e. BNA and RDU.
"Let me think about it" = the coward's way of saying "no"
 
jrlander
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RE: Hubs: Which Airline Will Blink First?

Thu May 29, 2003 12:33 am

I can see DL closing the DFW hub if the relationship between Delta, Northwest and CO gets closer. However, the SE has a whole lot of loyal DL frequent flyers in a huge number of small and medium size markets. These people fly from airports which are often not served by AirTran or SW. They use the DFW hub to connect to flights to the west. My hometown of Jackson is one such place. Delta has long been the dominant carrier there, even with SW service. Flying to ATL or CVG to connect to the west is not convenient. However, they will happily take a DL RJ to DFW. Recently JAN got 2 more RJ flights as part of the restructuring of DFW.

Now, if the relationship between CO and DL were to grow and (who knows what will happen in the next few years) eventually merge (they certainly have talked about it before), then certainly shutting down DFW in favor of the CO dominance of IAH would make perfect sense. DL customers would happily connect through IAH instead. This could even happen without a merger, a sort of dual hub of cooperating carriers could emerge. Customers could fly to IAH on either a CO or DL regional jet, and then transfer to either a CO or DL plane in Houston. But DL needs a hub there for all of that traffic.

Why would they not fly AA, one might ask. Well, AA has no other service to many of the cities like JAN other than DFW. If you want to go to the East, you have to go to DFW. If you want to go to AA hubs of STL, ORD or MIA, you have to connect through DFW. This is why Delta maintians so much dominance of a market like JAN. It servers ATL, CVG, and DFW providing a huge amount of connecting traffic. Even for international service, DL provides many more connections in those three hubs than AA has to offer at DFW alone. JAN isn't the only city in the South like this. Shreveport, Montgomery, Mobile are others. Than there are the host of small cities which DL servers from both directions with DCI. Meridian, Gulfport, Alexandria, etc.... There are lot of people who fly in all of these cities and no one else provides the service.
 
JohnJ
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RE: Hubs: Which Airline Will Blink First?

Thu May 29, 2003 12:40 am

"That same quandary perplexes other airlines. Others in the industry point to
Continental Airlines' Cleveland operation, Northwest Airlines' Memphis hub,
Delta Air Lines' Dallas operation, even American Airlines' St. Louis hub as
operations that are excessive in this economic environment -- and probably
for many years to come."

The NW Memphis hub consistently comes up in any discussion about airlines closing their hubs. MEM apparently does have a major weakness in the O&D traffic area, but I would think that a decision by NW to close this hub would be far-reaching in their route network. Their other two North American hubs, DTW and MSP, are along the northern fringe of the U.S. It would seem that if the airline has any interest in serving the Southeast/Southwest parts of the country effectively, they need a hub in the south. Someone who wanted to travel on NW from, say, Orlando to Los Angeles would have to go all the way up to Detroit or Minneapolis, then back down and across to LA. It's not likely they'd get to many takers on a routing like that. The connection in MEM is much more reasonable.

Conversely, the other hubs mentioned - PIT, STL, CLE, and DAL, all have suitable alternates for their host airlines.
 
goingboeing
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RE: Hubs: Which Airline Will Blink First?

Thu May 29, 2003 12:58 am

Dang...I remember the days when Delta used to fly DC-8's between DFW and JAN. Then they offered about 5 trips a day on either 737's or 727's. Now it's just RJ's.
 
Tom in NO
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RE: Hubs: Which Airline Will Blink First?

Thu May 29, 2003 1:09 am

Yeah, that "even Amerrican Airlines' St. Louis hub..." line got my attention. That was why I noted it the way I did.

I'm curious about NW's MEM hub, as well. The thought has been percolating through my mind lately about how soon we can expect to see RJ's on the MEM-MSY run. Could it become a RJ hub, with larger mainline aircraft on the longer and busier routes (say west coast and the northeast)?

Tom in NO (at MSY)
"The criminal ineptitude makes you furious"-Bruce Springsteen, after seeing firsthand the damage from Hurricane Katrina
 
atcboy73
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RE: Hubs: Which Airline Will Blink First?

Thu May 29, 2003 5:24 am

Thats a great article on a great topic. I have been wondering this for some time now.

My guess is that CO will be the first to close a hub and it will be CLE. My reasoning is that it seems to be mostly RJs now. If there is going to be anything easy to reallocate its going to be a fleet of RJs. They may also opt to keep some of the RJs at CLE as it could probably support 4 (or so) flights a day to BOS, LGA, DCA and maybe 5 a day to ORD. Also, from what I have heard on these boards the management at CLE is not the quickest nor does it operate an efficient operation at low cost to CO. CO also could easily reroute traffic through the NW hub at DTW and if the DL/CO/NW relationship matures there is also CVG. To maintain an operation at CLE just doesn't seem to make sense.

Im pretty interested in the new Delta operation at DFW and don't really think its going to be closed down right now. After all Delta doesn't have that much exposure there anymore, its mostly their RJ operators, and with so many RJs coming to the hub I would be very surprised to see them lose money on what few mainline they operate. And its not like they are operating huge mainline aircraft anymore either.

Man, from what I hear MEM has pitiful O&D numbers also but as someone stated above it is their only hub in the south. These alliances could change all that though.

AA at STL, oooooooo that is the big question and it just has me watering at the mouth to know what they are thinking about doing with that one. My guess is this (please let me know what you think about this one).

AA at STL goes to 8 daily banks much like the DL hub at DFW and goes down to about 100 mainline to the major coastal cities with the rest being Connection RJs. But not a total closing of the hub.

If STL were to close the whole industry would be better off though, just look at where it is. Right in the middle of the country, and it would affect everyone, UA at ORD and even DEN, AA at ORD and DFW, NW at all their hubs, DL at CVG and maybe even a little at DFW, and don't forget SWA.

HHHAaaaa just my .02  Big thumbs up

Thanks for posting the article and guys, let me know what ya think about my rant.
 
atcboy73
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RE: Hubs: Which Airline Will Blink First?

Thu May 29, 2003 5:33 am

And just another thought about the "and even AA at STL" stuff.

Maybe one of the reasons the writer put it like that would be this. The STL hub, when operated by TWA a few years back was really HUGH, BIG BIG BIG. And many people do realize this. I know AA DFW and AA ORD are big, so is UA ORD and DL ATL, we all know these are big hubs but they are traditional big travel cities with big airlines. Many people don't know that in its hay day the TWA STL operation was 12 banks, 6 in each direction and almost every bank with over 30 mainline A/C, not to mention commuters. Its not the number of A/C that should floor you but the total number of banks. Do we all agree 12 banks a day is a lot?

Maybe the writer realizes this and cant believe, like me that it could be significantly reduced or closed all together.
 
luv2fly
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RE: Hubs: Which Airline Will Blink First?

Thu May 29, 2003 5:39 am

I would be surprised to see CLE closed totally down as a CO hub. I could see it downsized even more than it is now. I believe CLE would fight to keep CO here in CLE, also interesting note CLE is the only airport in Ohio with a hub so to say, CVG is actually in KY.
You can cut the irony with a knife
 
luv2fly
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RE: Hubs: Which Airline Will Blink First?

Thu May 29, 2003 5:42 am

I also think if US leaves PIT before CO decides on CLE that would help to keep them here in CLE.

Pit and US I do see them going there separate ways.

STL and AA yeah I can see that being downsized way more than it already is.
You can cut the irony with a knife
 
redngold
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RE: Hubs: Which Airline Will Blink First?

Thu May 29, 2003 5:54 am

Anyone who thinks that CLE is an all-RJ hub ought to look up CLE arrivals on the following flight tracking website: http://www.flytecomm.com/cgi-bin/trackflight around 8:30 PM ET, at which time 99% of that day's flight plans have been filed for CLE. We have a sizeable mainline operation that CO can't afford to lose by closing their third hub. Moving it to PIT would be an option if US were to leave, but CO can't just close CLE without losing quite a bit of business.

redngold
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srbmod
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RE: Hubs: Which Airline Will Blink First?

Thu May 29, 2003 8:01 am

NWA's MEM hub was inherited in the Republic merger (it was a Southern hub prior the their merger w/North Central to form Republic; Southern also had a hub @ ATL that Republic kept up until the early 80s). It would make sense to keep it open as a hub in the Southeast, but some larger cities already have mainline service to NWA's other hub cities. ATL has NWA service to MEM, DTW, and MSP, and the ATL-MEM service is a legacy route, which dates back to Southern Airways, and with AirTran and Delta offering flights on the route, NWA really has no need to fly the route. The main reason for keeping the MEM-ATL route open in the past was for MX reasons, so they could send DC-9s down to the DC-9 MX base @ ATL for checks. With the closure of the DC-9 MX base @ ATL, there really is no need to keep the route open as a mainline route, Airlink is already doing several of the flights a day right now with an ARJ.
 
tekelberry
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RE: Hubs: Which Airline Will Blink First?

Thu May 29, 2003 8:07 am

By routing all the current AA STL traffic through ORD would probably be more efficient.

NW's MSP/DTW hub also seems like a waste since they have another hub only 2 states away.
 
DCA-ROCguy
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RE: Hubs: Which Airline Will Blink First?

Thu May 29, 2003 10:08 am

Indeed a great article on a great topic, as Atcboy noted.

One reason that I think both CLE and MEM are going to be around awhile is that both NW and CO have only three hubs. It seems to me that part of a network carrier's "critical mass" is having at least three hubs. (Or at least two hubs and some big focus operations, which is what I think US will have when PIT closes. Baldanza and Siegel spoke generously in this article. Everything else I've heard out of US is that PIT will be an RJ hub if the fees drop, and less than an RJ hub if they don't.)

Closing CLE would leave CO with only two hubs and no domestic focus operations; that would threaten CO's critical mass. Closing MEM would leave NW with only two hubs, and small focus operations at SEA and LAX, thus threatening NW's critical mass. Remember that NW/ CO/ DL is only an alliance, and each airline only makes money on its own flights.

AA can most afford to blink by closing STL. AA will still have ORD, DFW, and MIA superhubs, and big focus operations at JFK, LAX, LGA, BOS, and DCA. AA loses the least critical mass by closing STL, as I see it. Pax in the Midwest will still have ORD and DFW options for connections.

Also, I think we'll see UA close down IAD. UA will still have ORD, DEN, SFO, LAX superhubs and good focus operations at SEA and MIA. IAD has not been competitive as an East Coast hub (US, CO, DL hubs in the east blow it away).

Jrlander, your point about DL at DFW and westbound traffic from Delta pax in the Southeast is well taken. I bet DFW stays for the reasons you listed.

And of course, if anyone goes Chapter 7 all bets are off.

My .02, for what it's worth.

Jim
Need a new airline paint scheme? Better call Saul! (Bass that is)
 
luv2fly
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RE: Hubs: Which Airline Will Blink First?

Thu May 29, 2003 10:39 am

DCA-ROCguy
Your ideas and thoughts are right on if you ask me.
You can cut the irony with a knife
 
drerx7
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RE: Hubs: Which Airline Will Blink First?

Thu May 29, 2003 10:53 am

Here are my opinions:

DL at DFW: Hopefully they abandon this white elephant of a hub as the codeshare with CO picks up and benefit from some feed at IAH.

CO at CLE: I believe CO will leave CLE only if a more suitable hub opens up or if UA goes under.

AA at STL: This hub is redundant in my opinion and is a likely candidate for closure.

NW at MEM: I don't think this will happen. NW would be foolish to let it go; it should at least be kept as an RJ hub-I didn't even know it was not profitable-is it?

US at PIT: This is the most likely closure to me. It is fairly close to the other US hubs.
Third Coast born, means I'm Texas raised
 
bhmal
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RE: Hubs: Which Airline Will Blink First?

Thu May 29, 2003 11:56 am

At least for the current schedule, MEM has downgraded mainline significantly. I don't have the exact total of mainline departures now compared to say, a year ago which was 103. But several cities who have in the past saw only mainline NW to MEM which was eventually split between ARJ/CRJ and mainline now have only ARJ/CRJ. Examples: BHM, VPS, BNA, SDF, JAN, GPT, JAX, OKC. This is the first schedule since NW started ops at BHM when they acquired Republic that has no mainline 9's to MEM. Right now we get one nine a day to DTW. Also, the schedule at MEM has been cut drastically at MEM. I know the 4th bank has been reinstated but cities like SFO, SEA, BOS and MIA who used to have 2-4 daily nonstops are now down to either 1 or 2 per day. The aircraft on these runs are smaller too. For the first time in 10 years the LAX and SFO runs had 125 seat planes (A319's) on them. In the past ten years these routes have been run exclusively with 727/320/757.

So I'll have to at least buy the argument that MEM may very possibly become a more dominant RJ hub with larger mainline flights to the bigger cities.
 
HlywdCatft
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RE: Hubs: Which Airline Will Blink First?

Thu May 29, 2003 12:08 pm

The MEM hub might close for the same reason someone said that DFW (Delta) would close. If the Delta/Continental and Northwest deal comes about it would be pointless having Memphis and Atlanta so close- just like CLE being so close to DTW.

MEM is making money, they don't care about the red tails when they got the purple tails that is really making the money in the town of Elvis.
 
jrlander
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RE: Hubs: Which Airline Will Blink First?

Thu May 29, 2003 12:31 pm

Drerx7:

I would hardly refer to DFW as a white elephant for Delta. Webster's defines white elephant as:

"a property requiring much care and expense and yielding little profit b : an object no longer of value to its owner but of value to others c : something of little or no value "

I don't think that it meets any of these definitions. It is of value. Before DL started putting everything in ATL, and before Eastern went under, DFW was a huge hub for Delta. At one point they even served Frankfurt from DFW. As I said before, the value of keeping those SE flyers loyal to Delta is worth a lot. Those customers have always been Delta's bread and butter. Delta has a large maintenance operation at DFW. The 757 maintenance program is based there. DFW is one of the few operations other than ATL to have any engineers located there. it is a very important piece of Delta's operation.

However, IAH could supplant it if conditions were right.
 
Continental
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RE: Hubs: Which Airline Will Blink First?

Thu May 29, 2003 12:36 pm

Tekelberry: Why is MSP/DTW for NWA bad? MSP serves mostly the Asian routes, while DTW covers the Europeon routes. Keep in mind MSP has a lot of Mexican routes as well! I think the two hubs are perfect!

co
 
sllevin
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RE: Hubs: Which Airline Will Blink First?

Thu May 29, 2003 12:45 pm

I don't think NW will give up any of it's hubs.

If anything, look for SEA and LAX to ramp up and the three hubs to stay. MEM is important because it's typically a better weather hub. And in a sense, having DTW and MSP, while close, again provides SOME weather separation. If you merged those hubs, your entire airline would halt if you had just one hub and the weather moved in.

I believe that either NW will ramp up in the West, or purchase AS. Yes, I know, blah blah blah, but I still think it would not only work, but would result in a significantly stronger airline, even if operated as separate entities with just tighter schedule and FF integration.

Steve
 
tekelberry
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RE: Hubs: Which Airline Will Blink First?

Thu May 29, 2003 1:13 pm

"Tekelberry: Why is MSP/DTW for NWA bad? MSP serves mostly the Asian routes, while DTW covers the Europeon routes. Keep in mind MSP has a lot of Mexican routes as well! I think the two hubs are perfect!

co"


I didn't really want to make it sound bad, I just think it is kind of strange to have 2 major hubs so close to each other.

Closing MEM would leave NW with only two hubs, and small focus operations at SEA and LAX, thus threatening NW's critical mass.

You're forgetting the to-be focus city in MKE starting 7/1.
 
Guest

RE: Hubs: Which Airline Will Blink First?

Thu May 29, 2003 6:14 pm

I highly doubt NW will consider closing MEM. MEM is one of the lowest cost hubs within the country and has a quick, efficient design. If you price fares on NW, you may be able to fly XXX-YYY for the exact same cost no matter which hub you connect through – but the actual fare is always higher if you choose MEM, as there’s no PFC and NW doesn’t pass the savings to the passenger. In other words, given the lower fees and “pocketed” PFC, NW makes more money if a pax chooses MEM. It’s really no surprise that MEM is seeing increased RJ flying as NW takes delivery of more RJ – a few years ago NW proposed (during talks to renovate MEM) that they’d like the gate area to be gradually redesigned to handle up to 60 RJ. I believe MEM, which has a strategic location, will eventually see 6 banks of mostly RJs – but it’ll be an overall increase in the number of flights, which is a good thing for both the airport and the passenger (with the exception that the flights are on RJ…).

FWIW, both MSP and MEM are at/near pre-9/11 flight levels, whereas DTW is down quite significantly; MSP is now NW’s largest hub. Throughout its history with NW (and even RC) MEM has seen very little B757 flying, and most of those B757 (and all of the DC-10) were/are headed to DTW and MSP.

Also, it’s unfair to say MEM is a leftover from the RC merger – that was 17 years ago! Before the merger, NW didn’t have any hubs (although it had a presence at both MSP and DTW) and was mostly a trans-Pacific carrier. Since then, NW has changed dramatically… MEM has developed its own flavor and is a huge part of NW.
 
drerx7
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DL @ DFW

Thu May 29, 2003 11:37 pm

You make good points about Delta at DFW; however how long will Delta keep their "loyal" FF base if they keep downgrading flights to RJs? RJs are not exactly popular choices for customers; they are more popular than Brasilias and ATRs -- but how much cutting is too much before folks start to sway to other airlines? It just seems as though Delta has been fighting a losing battle against American at Dallas. Almost as if using a ton of RJs is a cop out. Just some thoughts--I'm not a DFW fan or DL fan for that matter.
Third Coast born, means I'm Texas raised
 
Alpha 1
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RE: Hubs: Which Airline Will Blink First?

Thu May 29, 2003 11:54 pm

Conversely, the other hubs mentioned - PIT, STL, CLE, and DAL, all have suitable alternates for their host airlines.

PIT and CLE have "suitable alternates"? Who, what, where, when and why? WN would add flights, but they certainly wouldn't replace even a fraction of the almost-300 flights a day operated by CO/COEX out of CLE. CLE loses CO, and it's a huge blow to the city.

Gordon challenged CLE corporate leaders to start flying CO more, and, since he was here to make that pitch, loads have gone way up. Coincidence? Maybe.

My guess is that CO will be the first to close a hub and it will be CLE.

CLE has just renegotiated landing fees with the carriers, at the urging of CO. CO is working with the city, and the new Chief at Hopkins to come up with long-term strategies for CO at CLE. CLE has invested a ton of money in CLE.

Does that mean CLE won't go away? Of course not, but it's obvious that CLE and CO are committed to make it work here, and it's going to be a while-at least a year-before any serious talk of relocation of closure takes place.

In fact, CLE is adding RJ, mainline and Commutair flights for the summer. That certainly isn't an indication of immenent doom for CLE. I think people are jumping the gun here.  Smile
 
JohnJ
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RE: Hubs: Which Airline Will Blink First?

Fri May 30, 2003 12:22 am

PIT and CLE have "suitable alternates"? Who, what, where, when and why?

US Airways has PHL, which is only a couple of hundred miles away from PIT. How many airlines can you think of that have two hubs in the same state? And Continental has Newark, which granted is a pretty good distance from CLE. But I think their network would be in far better shape without CLE than NW would be without MEM.

At least for the current schedule, MEM has downgraded mainline significantly. I don't have the exact total of mainline departures now compared to say, a year ago which was 103.

For whatever odd reason, I've been keeping track of NW's flights out of Memphis. Here are some figures, with a pre-911 schedule thrown in for good measure - in fact, the September 2001 schedule probably reflects the MEM hub at its largest since the late 1980s:

June 5, 2003
99 mainline flights
104 regional jet (ARJ/CRJ) flights
43 propeller aircraft (Saab 340) flights
246 total flights

May 1, 2003
91 mainline flights
104 regional jet (ARJ/CRJ) flights
41 propeller aircraft (Saab 340) flights
236 total flights

Oct 27 2002
111 mainline
83 regional jet (ARJ/CRJ) flights
38 Saab 340 flights
232 total flights

September 1, 2001
135 mainline flights
72 regional jet (ARJ/CRJ) flights
62 Saab 340 flights
269 total flights

For the first time in 10 years the LAX and SFO runs had 125 seat planes (A319's) on them. In the past ten years these routes have been run exclusively with 727/320/757.

The June 5 schedule has a few upgrades out of MEM. SEA will be back to two daily A320 flights on 7/1. And LAX is solid A320 on all 4 daily flights. SFO, while remaining a single daily flight, is running on an A320 now, too. On July 1 VPS will be back to solid DC-9-30 flying on all 4 daily flights. And Vancouver is back on the schedule with an A319 6 days a week. Probably the biggest change, as was speculated in a previous thread, is the replacment of the KLM flight to AMS with a Northwest DC-10.



[Edited 2003-05-29 17:26:10]
 
Tom in NO
Topic Author
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RE: Hubs: Which Airline Will Blink First?

Fri May 30, 2003 12:46 am

Question to all:

Noting IndustrialPates comment about the fact that MEM does not currently have a PFC in effect, I'm curious about the following:

How many passengers does Northwest ENPLANE at MEM on an average day? With approved PFC's currently at $4.50 at most airports, and $3.00 at some, I'm wondering how much NW might pocket from that.

Tom in NO (at MSY)
"The criminal ineptitude makes you furious"-Bruce Springsteen, after seeing firsthand the damage from Hurricane Katrina
 
Alpha 1
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RE: Hubs: Which Airline Will Blink First?

Fri May 30, 2003 12:46 am

JohnJ, I was referring to "suitable alternatives" for those actual airports. PIT and CLE have no carriers who will jump in and fill the void left behind. Perhaps what you're saying in reply is where the jist of what Actboy73 was getting at.
 
HlywdCatft
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RE: Hubs: Which Airline Will Blink First?

Fri May 30, 2003 12:52 am

**Tekelberry: Why is MSP/DTW for NWA bad? MSP serves mostly the Asian routes, while DTW covers the Europeon routes. Keep in mind MSP has a lot of Mexican routes as well! I think the two hubs are perfect!**

MSP only has ONE Asian route to NRT a day

DTW has four 2X NRT 1X KIX 1X NGO
before 9-11 Northwest used to also fly direct DTW-PEK, DTW- Shanghai, DTW-SEL (before Asian crisis in late 90s) and I think DTW- TPE

DTW also has more European routes than MSP.

MSP has 3-4 daily to AMS, 1X LGW
DTW has 3-4 daily (depending on season) AMS, 1x LGW, 1X FRA, 1x CDG and in summer 1X FCO

As for Mexican routes, both have dailys to MEX. I am not sure about MSP in the winter, but DTW also flies to CUN, Puerto Vallarta, Cozumel and I think Aculpulco.

 
LV
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RE: Hubs: Which Airline Will Blink First?

Fri May 30, 2003 1:00 am

I've said it before and I will say it again, I am convinced that AA will give up on STL, even after the economy rebounds and traffic comes back.

I think when that happens US is just licking its lips waiting to get the heck out of PIT and get all those birds down to STL as quickly as possible so they can finally become a player in the Midwestern part of the country and start working their way west.
 
jrlander
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RE: Hubs: Which Airline Will Blink First?

Fri May 30, 2003 4:49 am

I really don't think most customers care or know what plane they are flying on. DL customers who are loyal FF members will choose DL over other carriers even if DL is serving them with an RJ.
 
luv2fly
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RE: Hubs: Which Airline Will Blink First?

Fri May 30, 2003 4:53 am

The loayl FF are the ones seeking the upgrades to the forward cabin, and RJ's do not offer them.
You can cut the irony with a knife
 
jrlander
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RE: Hubs: Which Airline Will Blink First?

Fri May 30, 2003 5:44 am

but that doesn't mean they won't choose them. If their points are all with one airline, and it is other offering the front cabin, they have nothing to gain by switching airlines.
 
ScottB
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RE: Hubs: Which Airline Will Blink First?

Fri May 30, 2003 8:48 am

Actually, I don't believe that Delta sees many of its customers in the Southeast defecting to AA for flights to and through DFW. In the states east of Texas and south of Virginia/Kentucky, excluding Florida (so NC, SC, GA, AL, MS, TN, LA, and AR), AA offers mainline service from DFW to a whopping 9 cities -- one of which is ATL. Of the other eight, two are hubs for other majors (CLT and MEM) and two are former AA hubs (RDU and BNA), thus having customers who are already loyal to AA). The remaining cities are HSV, BHM, MSY, and XNA -- and Delta has more frequencies to BHM and MSY from DFW than AA. Moreover, Delta offers flights from far more cities in the Southeast to DFW than American -- they serve AEX, CHS, CAE, GTR, DAB, VPS, GPT, LFT, MLB, MOB, MLU, MGM, PFN, PNS, SAV, and TLH from DFW (not served by AA) -- the only cities in the Southeast served by AA and not DL from DFW are CLT, FSM, GSP, MIA, and RSW (and arguably all but FSM are geographically better-served via ATL anyway).

So Delta's hub at DFW does serve an important niche -- it gives Delta's customers in a very broad range of cities across the Southeast a way to travel west on Delta without back-tracking to ATL, and it also covers over a dozen markets which are unserved by AA from DFW. And while CRJ's aren't the most comfortable way to fly, they sure beat turboprops, and they aren't much less comfortable than the F100's AA uses out of DFW.

As for CO at CLE, I don't see them leaving anytime soon, unless a better opportunity (basically, DEN) were to open up. CO needs a place to put all the ERJ's that ExpressJet already has and will have, and EWR and IAH together don't have the capacity for all of them. I doubt CO would move to PIT, simply because CLE has better O&D traffic, even if PIT has better facilities.

As for MEM, it's probably cheaper for NWA to keep operating the hub than it would be to shut it down. They don't have any better uses for all the aircraft, the DC-9's and ARJ's are well-sized for small markets, and the late-evening bank helps improve fleet utilization (it's just over 1/4 of the mainline departures at MEM). I do question how effective the MEM hub would be without smaller aircraft like the Saabs and DC-9's.

AA needs STL for the long term as a reliever to ORD and DFW; if they have done a good enough job of containing their costs, they won't have to abandon the STL hub. And I strongly doubt they have any interest in giving it up so that US Airways can just move in and start serving more of AA's markets.
 
DeltaBoy777
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RE: Hubs: Which Airline Will Blink First?

Fri May 30, 2003 1:45 pm

I have a couple of really good points to discuss about Delta not leaving DFW.

FIRST Delta slowly built up operations at DFW, as a relief to ATL in the east, and SLC in the west. By doing this Delta expanded to many more cities where demand was high but expense to flying into DFW was cheaper than running a long haul from ATL (i.e. jet fuel, missuse of aircraft on a route, etc.).

SECOND Delta has a large maintenance facility, with hangar space, which currently serves as the major facility for ASA and a reliever for ATL. A sprawling Air Logistics building, counting as DL's major cargo center covering domestic and international freight, and a reservation center which controls quite a few of Delta's midwest calls.

THIRD With American Airlines in the current shape it is in, Delta would be foolish to pull up stakes at DFW and surrender ground to a airline that is on the brink! Think about this, if AA had no other option left but to slash flights and file for Ch. 11, Delta would be sitting pretty with over 150 DL and DL Connection flights out of DFW.

I respect everyone else's comments and points on this matter, but I do not believe Delta at this time will consider shutting down the DFW hub right now.

~DeltaBoy777~

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RE: Hubs: Which Airline Will Blink First?

Fri May 30, 2003 1:50 pm

~DeltaBoy777~,

1) DL acquired its SLC from Western Airlines... it downsized and reshaped the operations, but it certainly hasn't built SLC up.

2) It's foolish to think AA would liquidate... AA is a Texas company and our president is a business-friendly Texan... hmm... UA would liquidate before AA and once the second-largest carrier is gone, it's likely the government would try to prevent the largest carrier from liquidating anyway.

3) DL has downsized DFW over the years and continues to do so today. Had they been sucessful in merging with CO, DFW would've been a goner..
 
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RE: Hubs: Which Airline Will Blink First?

Fri May 30, 2003 1:55 pm

No way will Delta shut down th DFW hub, although downsized like Scottb said it serves it purpose quite well. I do miss the early 90's when I use to see multiple Tristars 1/100's,767's(AA and DL), DC-10's, MD-11' and 747- Sp's of AA and they all tended to file in and out around the same time, the good ol days!
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DeltaBoy777
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RE: Hubs: Which Airline Will Blink First?

Fri May 30, 2003 2:02 pm

Hey, I said nothing about SLC being the major hub!! If anything I think SLC is a very weak hub for Delta!!! Only there to get Delta the Olympics!! But where else are you going to go?? DFW would not abandon all of those facilities they have worked hard to obtain, no matter what you say. As for AA, you do have a good point, if it goes between UA and AA, UA would go down due to poor management. However, if you're Delta you don't want to leave if American starts cutting flights. They have downsized DL mainline at DFW, but they have also increased dramatically the number of DL Connection flights, and most passengers don't know the difference!!

~DeltaBoy777~
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RE: Hubs: Which Airline Will Blink First?

Fri May 30, 2003 5:48 pm

) It's foolish to think AA would liquidate... AA is a Texas company and our president is a business-friendly Texan... hmm... UA would liquidate before AA and once the second-largest carrier is gone, it's likely the government would try to prevent the largest carrier from liquidating anyway.

-----

AA is a national corperation. It belongs as much to Illinois and Missouri together as to Texas if you look at size of operations. And that is the main thing that politicians look for when deciding who to give favors to.

The president himself can do less in these kinds of situations than you might think, especially in a short term financial crises. He has some power to intervene in labor disputes and that is about it. He cannot produce billions at the drop of a hat. He cannot change the bankruptcy laws, or even a single court decision. He could not save Enron. CONGRESS could save AA or UA, like they saved Crysler. However, they did not save Pan Am or Eastern. I am sure there are some people who said that the government would not allow both Eastern and Pan Am to fail. Crysler was saved because it was in an important export industry. If it appears that the international routes that they control will remain in US hands (as with Pan Am) - IMHO it is highly likely they will save either UA or AA - even if they both fail together.

We do not know that UA will liquidiate before AA. One may liquidate before the other, both may liquidate, or both may survive. None of these possibilities is unlikely enough that a reasonable person wouldn't consider them in his business plans (if it was relevant). Some very smart and experienced people on this board and elsewhere have offered differing opinions on this. But I am not aware of any experianced individual who would say that the eventual liquidation of AA or both UA and AA is not a reasonable possibility. They are both in deep trouble.

Even a partial liquidation could result in the dismatling or drastic downsizing of one or more major AA hubs - perhaps even DFW. To say it is "foolish to think that AA would liquidate" is itself foolish. Anything and everything is up for grabs in the industry now.
 
ord
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RE: Hubs: Which Airline Will Blink First?

Fri May 30, 2003 10:48 pm

I don't think Delta's DFW maintenace facilities have anything to do with keeping a hub. Didn't Northwest inherit a huge maintenance complex in Atlanta when they merged with Republic in 1986/87? I believe so, but yet Northwest never had a hub in Atlanta.

And United has a huge maintenance facility in Indianapolis with no hub, although it is about to be closed.

Also, didn't ASA just build a maintenace facaility in Louisiana?

 
nonrevman
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RE: Hubs: Which Airline Will Blink First?

Sat May 31, 2003 12:39 am

I don't think Delta's DFW maintenace facilities have anything to do with keeping a hub. Didn't Northwest inherit a huge maintenance complex in Atlanta when they merged with Republic in 1986/87? I believe so, but yet Northwest never had a hub in Atlanta.

Very true. It is convenient to have a hub at the maintenance base because you can fly the planes in and out full of passengers rather than having to ferry an empty plane in to the hangar.

The same goes for the reservations office. You dont have to have a hub to have a call center.

For now, it appears that DL will stay committed to DFW in the form of the connection carriers. There is no telling when exactly the mainline flights will bottom out. It would appear that the DL/DFW hub is the closest any of the majors have to establishing an RJ hub. Later than a year, there will not be much over 40 mainline flights out of DFW. If the financial recovery does not come soon, it could very well be possible that DFW would be the first hub to be cut if it was necessary to remove a hub. Without SLC, DL would only have transcons to the West. It would not be possible to serve many of the Western markets via a transcon (especially Montana, Idaho, etc.). CVG is profitable as well as a very popular connecting airport. We all know that ATL would be the last hub to go.
 
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RE: Hubs: Which Airline Will Blink First?

Sat May 31, 2003 12:47 am

NW inherited a DC-9 mx base at ATL that survived thru the Republic & NW mergers. It was recently announced though that it will be closed.




[Edited 2003-05-30 17:54:46]
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RE: Hubs: Which Airline Will Blink First?

Sat May 31, 2003 1:45 am

I believe that there will be more adjustments and downsizing as we go forward. Remember there is just way to much capacity in the market right now as we know it.
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Tom in NO
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RE: Hubs: Which Airline Will Blink First?

Sat May 31, 2003 2:20 am

Ord:
Continental Express recently took over an existing building at SHV for a maintenance complex. Could that be the one you're looking at?

Everyone:
Any answers yet to my earlier question about NW's average daily enplanements at MEM?

Tom in NO (at MSY)
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nonrevman
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RE: Hubs: Which Airline Will Blink First?

Sat May 31, 2003 2:28 am

Tom in NO,

I think he is referring to the Baton Rouge base for ASA.
 
Tom in NO
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RE: Hubs: Which Airline Will Blink First?

Sat May 31, 2003 2:38 am

My bad, I missed noticing ASA's new hangar at BTR. Looks like the ribbon cutting was May 6. I have to run up there for a different dedication fairly soon, so I'll see if I can't get a tour of ASA while I'm there.

Tom in NO (at MSY
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ScottB
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RE: Hubs: Which Airline Will Blink First?

Sat May 31, 2003 3:12 am

Tom-

Check out http://www.mscaa.com/finance/stats.htm and http://www.mscaa.com/April%2003.htm. In 2002, 11,685 enplanements per day (including Pinnacle, Mesaba, and KLM) averaged over the entire year; 12,062 enplanements per day in April of this year.

Acually I'm a bit surprised that United's "hub" at IAD wasn't mentioned; it's not entirely clear what's going to happen between UAL and ACA, and without ACA, United has very, very little at Dulles. Similarly, United has also cut pretty deeply at its LAX hub; I don't know if LAX is still designated as a hub by the company.
 
Tom in NO
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RE: Hubs: Which Airline Will Blink First?

Sat May 31, 2003 3:56 am

Scott,

Thanks for posting those numbers.

At $4.50 per PFC that MEM is not charging, it looks like Northwest et al pocketed about $54,279 per day in April (assuming they didn't run the savings back to the pax). That would translate out to $19.8 million per year. Maybe the MEM yields are better than we think.

Tom in NO (at MSY)
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RE: Hubs: Which Airline Will Blink First?

Sat May 31, 2003 4:14 am

Cloudy,

My reasoning was partially sarcastic based on previous comments made on this topic. In all serious, I (like everyone else, including DL) have no clue whether or not DFW will remain a focus city/hub for DL. DFW has experienced severe cutbacks in recent years and DL has most recently repositioned it into a reliever/regional hub (the B763&MD11 were flying into DFW until last fall!). Will it work? Who knows? But to say DL will keep DFW open just in case AA liquidates, or cutbacks flights at DFW, is foolish… using the logic that AA might liquidate before UA, then CO (most analysts think CO would liquidate very quickly if they went bankrupt) or even DL could liquidate first. In times like this, airlines must be thinking about their own future. And using logic that DL will add flights at DFW if AA cuts-back … well, DL has been cutting back for years while AA has been adding. In fact, one can argue that AA added because DL cut back. I don’t think we’ll see a reverse trend – DFW competes heavily with traffic from ATL, and ATL is allegedly making, or close to making, money for DL so why change things?

DL has already stated that they’d like to increase their presence along the East Coast, specifically in the Northeast… it’s been reported that management isn’t satisfied with the performances of DL’s hubs at CVG, SLC and DFW. Thus, anything can happen. Should UA abandon IAD, DL could decide to grab it… ACA operates most of the flights at IAD for UA, and UA mainline operates about 20-25 flights to a dozen destinations (excluding trasnoceanic/South American and flights to its other hubs), so if DL could pick-up ACA, it could be an easy decision.

Should UA or any other airline liquidate, then things and perceptions will change…


[Edited 2003-05-30 21:28:10]
 
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RE: Hubs: Which Airline Will Blink First?

Sat May 31, 2003 4:16 am

Actually 763's were operated at DFW until April 6th by DL.
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