emseeeye
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Can An Airline Have Too Many Hubs?

Mon Apr 30, 2007 11:53 am

Is it possible that an airline can have too many hubs? I was just reviewing route maps and I noticed CO has 3 major hubs while US Airways has many hubs. I realize these hubs exist due to mergers and acquisitions but when does having too many hubs become counter productive?
 
PGNCS
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RE: Can An Airline Have Too Many Hubs?

Mon Apr 30, 2007 12:01 pm

Yes. Remember AA's foray into BNA, RDU, etc.? Obviously CO is doing something right with three big hubs, though I'm not saying that that's the universal panacea. I think AA made the mistake in the past and learned, while US never had a great system given the proximity of their hubs to each other, but we'll see what they make of it going forward.
 
InnocuousFox
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RE: Can An Airline Have Too Many Hubs?

Mon Apr 30, 2007 12:04 pm

Yes, but 3 is not the number.

Much of it has to due with the locations of them. For a truly major airline, CO has a crappy hub layout. With IAH being so far south and EWR being so far northeast, it is not conducive to connections. For example, here in OMA, I am not going to select CO to go anywhere west of the Rockies - especially the Northwest.

Probably one of the best hub arrangements is UA. They can connect in DEN or ORD to get good coverage anywhere. Up and down the east coast, connect at IAD. On the west coast, use SFO or LAX. Really, you can't connect any two points without a convenient UA hub between them.

AA is OK with ORD and DFW in the middle of the country (STL doesn't count anymore). They also have a good east coast presence and a decent west coast one as well.

I think your point is a good question, but wrong approach. Take US, for example. Before the merger and before scaling down their prior bases, it was silly to have PIT and PHL both. As you mentioned, that was due to prior mergers... but they were too slow in shutting them down. (Union pressure anyone?) Now THAT was a case of too many hubs because they were no longer serving a completely functional point.
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BDL2DCA
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RE: Can An Airline Have Too Many Hubs?

Mon Apr 30, 2007 12:04 pm

Well, officially, US has 3 hubs - PHL, CLT and PHX. They consider DCA, PIT and LAS to be "focus cities," which means the flights are aligned more for O&D traffic and less for banks of departures.

US is the airline I know of that does let you build connections in lots of different places, which makes for some interesting connections.
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n844aa
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RE: Can An Airline Have Too Many Hubs?

Mon Apr 30, 2007 12:15 pm

Quoting InnocuousFox (Reply 2):
Much of it has to due with the locations of them. For a truly major airline, CO has a crappy hub layout. With IAH being so far south and EWR being so far northeast, it is not conducive to connections. For example, here in OMA, I am not going to select CO to go anywhere west of the Rockies - especially the Northwest.

I agree with most of what you say, but a couple things I'd point out in response:

1. IAH is only a couple hundred miles south of DFW, which is pretty universally recognized as a good-to-excellent hub situation point. So I'm not sure that this makes IAH that much worse off as a hub for east-west traffic. Worse off, yes, but still good for many routes. And it's particularly well suited to CO's use for it, especially in terms as a gateway to Mexico and Latin America.

2. Similar, EWR is a major asset to CO overall -- it makes a fantastic gateway to Europe, and it's the only true hub in the NYC area. So on the basis of international and O&D traffic alone, it's very, very valuable to CO.

No disagreement, though, that CO is hurting out west (at least before you get to GUM.) Past and present CO leadership has said, in as many words, that they wish they still had a hub at DEN. I've thought long and hard about where CO could set up a western hub that would fit in with their current route structure, and I don't see any easy answers -- which must be part of the reason that many people much smarter and more experienced than myself haven't done something about it  

Edit: Also I want to make it clear that I don't disagree with your statement that CO's route network makes for a lot of crappy connections. I think that's absolutely correct as well. What CO has works for them and their business model, but that may not be true indefinitely. I think there's a lot of growth that CO can achieve using their current hubs, but if their fleet is going to grow appreciably, I think they're going to have to establish a new one sooner rather than later.

[Edited 2007-04-30 05:18:22]
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boswashsprstar
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RE: Can An Airline Have Too Many Hubs?

Mon Apr 30, 2007 12:22 pm

Clearly, as the example of UA shows, the number isn't really what matters--UA has more hubs than any other airline I can think of, but as mentioned above, their relative geographic locations provides excellent opportunities for convenient connections on nearly any itinerary. UA also has much smaller hubs than most (I believe its ORD operation, UA's largest, is now smaller than AA's ORD operation).

However, I disagree that it was necessarily a disaster for US to have hubs in both PIT and PHL. In *theory*, this could have worked quite well, as the PHL hub could have been higher-priced (for both O&D and connecting trips) in order to encourage connecting passengers to use PIT, thereby leaving more available seats for O&D passengers at PHL, which is a much bigger O&D market. However, I can't think of a situation where an airline was able to make this theory actually work--AA briefly attempted to do something similar with STL and ORD, but never really got it off the ground before STL had to be scaled back.

US's current hub arrangement is actually pretty good for transcon and intracoastal travel--its main weakness is for non-coastal to non-coastal traffic, say Midwest to Texas or northern Great Plains to Mississippi River Valley. That's really not so bad, considering that an airline of US's size can't be all things to all people.
 
rampart
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RE: Can An Airline Have Too Many Hubs?

Mon Apr 30, 2007 12:45 pm

NW also has 3 hubs.
DL has 4 hubs counting JFK, which they do.
AA considers themselves as still having 8 hubs, according to their corporate information: ORD, DFW, LAX, BOS, MIA, JFK, LGA (?!), and SJU. Still haven't seen bankruptcy.
WN has a number of hub-like cities, not banked like a traditional hub, but certainly similar in flight volume and opportunites for connections. Doesn't hurt them much.

-Rampart
 
articulatexpat
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RE: Can An Airline Have Too Many Hubs?

Mon Apr 30, 2007 1:15 pm

Quoting N844AA (Reply 4):

No disagreement, though, that CO is hurting out west (at least before you get to GUM.) Past and present CO leadership has said, in as many words, that they wish they still had a hub at DEN. I've thought long and hard about where CO could set up a western hub that would fit in with their current route structure, and I don't see any easy answers -- which must be part of the reason that many people much smarter and more experienced than myself haven't done something about it

Edit: Also I want to make it clear that I don't disagree with your statement that CO's route network makes for a lot of crappy connections. I think that's absolutely correct as well. What CO has works for them and their business model, but that may not be true indefinitely. I think there's a lot of growth that CO can achieve using their current hubs, but if their fleet is going to grow appreciably, I think they're going to have to establish a new one sooner rather than later.

[Edited 2007-04-30 05:18:22]

When I lived (briefly) in Portland, I was surprised to learn that PDX used to be a hub for Delta. Portland is often held to be too small a city in terms of o/d to sustain much international flying, but Delta apparently had flights to several Asian cities in addition to whatever domestic destinations were available. There aren't many West Coast cities left open for significant hub development, if CO should want to do that: San Jose, Sacramento, and Portland are the largest. PDX is a smaller hub for Alaska, but with all the codeshare opportunities and the much better airport facilities, it wouldn't be the worst of the choices.
 
fjnovak1
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RE: Can An Airline Have Too Many Hubs?

Mon Apr 30, 2007 1:36 pm

I've often wondered why an airline hasn't tried to start a PIT or CLE sizxd hub in SMF... its the state capital of the fifth-largest economy in the world (California)...and its located in a region that geographically will just keep growing...I would think that, given the right selection of destinations, an operation that used 40 or so RJ's (145/145XR types or EMB-170's), a couple of turboprops of some kind (maybe 10 or so Q400's) and some 737's for east coast destinations perhaps would be quite successful. Sacramento would be an easy place to connect to go just about anywhere within CA, AZ, and NV to other western destinations, including the rockies and pacific northwest...
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abrelosojos
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RE: Can An Airline Have Too Many Hubs?

Mon Apr 30, 2007 1:40 pm

Just look at AZ and their twin-hub "strategy". Too many can start as low as 2  Smile.

-A.
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steeler83
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RE: Can An Airline Have Too Many Hubs?

Mon Apr 30, 2007 2:01 pm

Quoting BosWashSprStar (Reply 5):
However, I disagree that it was necessarily a disaster for US to have hubs in both PIT and PHL. In *theory*, this could have worked quite well, as the PHL hub could have been higher-priced (for both O&D and connecting trips) in order to encourage connecting passengers to use PIT, thereby leaving more available seats for O&D passengers at PHL, which is a much bigger O&D market. However, I can't think of a situation where an airline was able to make this theory actually work--AA briefly attempted to do something similar with STL and ORD, but never really got it off the ground before STL had to be scaled back.

True, but I guess things that work "in theory" just don't seem to want to work in real life, or at least that's what seems to be the airlines' logic anyway...
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InnocuousFox
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RE: Can An Airline Have Too Many Hubs?

Mon Apr 30, 2007 10:36 pm

Quoting Rampart (Reply 6):
WN has a number of hub-like cities, not banked like a traditional hub, but certainly similar in flight volume and opportunites for connections. Doesn't hurt them much.

Actually, since many typical major hubs have started shifting to rolling hubs rather than banked hubs, something like WN's MDW doesn't stick out as much. It truly is a connecting hub. It all comes back to the point that it is mathematically prohibitive (if not impossible) to serve a significant number of city pairs without some sort of connecting system like a hub or 3. As much as WN claimed to be P2P in the early days - avoiding OTHER airline's hubs, they are very much a hubbed system themselves.
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vv701
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 12:35 am

Quoting InnocuousFox (Reply 2):
Much of it has to due with the locations of them. For a truly major airline, CO has a crappy hub layout. With IAH being so far south and EWR being so far northeast, it is not conducive to connections.

But IAH is great if your final destination is in South or Latin America or the southern Pacific region and EWR is ideally situated fur travel to Europe, the Middle East and even Africa and the Indian sub-continent. I guess it depends where you want to fly to!
 
flyorski
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 12:40 am

Quoting InnocuousFox (Reply 2):
Probably one of the best hub arrangements is UA. They can connect in DEN or ORD to get good coverage anywhere. Up and down the east coast, connect at IAD. On the west coast, use SFO or LAX. Really, you can't connect any two points without a convenient UA hub between them.

What about SLC-BOI? Actually I am just joking, UA does do a good job of offering a hub to transfer in.

But I think that DL has a great hub network, ATL for the south, SLC, and LAX for the west, JFK and CVG for the east.
And if you include skyteam..........

Skyteam together has every direction everywhere in the us covered.
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Boeing7E7
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 1:40 am

Quoting Flyorski (Reply 13):
But I think that DL has a great hub network, ATL for the south, SLC, and LAX for the west, JFK and CVG for the east.
And if you include skyteam..........

Best locations period. While other hubs are focused on large O&D demand, DL started their structure by focusing on connections. SLC is in a better location than DEN to serve the west due to the gap east of the rockies. CVG could be better utilized with the advent of the 787 as could SLC taking presure off of Mecca (ATL). LAX and JFK make nice jump points for those living east of CVG and west of SLC.
 
floridaflyboy
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 1:51 am

Quoting InnocuousFox (Reply 2):
For a truly major airline, CO has a crappy hub layout. With IAH being so far south and EWR being so far northeast, it is not conducive to connections.

I agree here. I think CO could better optimize their western traffic if they had some sort of western hub.

Quoting InnocuousFox (Reply 2):
Probably one of the best hub arrangements is UA. They can connect in DEN or ORD to get good coverage anywhere. Up and down the east coast, connect at IAD. On the west coast, use SFO or LAX. Really, you can't connect any two points without a convenient UA hub between them.

That is true! UA has a wonderful setup with their hubs.

Quoting Boeing7E7 (Reply 14):
SLC is in a better location than DEN to serve the west due to the gap east of the rockies.

I agree. SLC is positioned better to serve California, and the pacific Northwest. It is also in a position where you aren't backtracking at all if you're coming out of somewhere like Montana and heading to California.
Good goes around!
 
rampart
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 2:11 am

Quoting InnocuousFox (Reply 11):
As much as WN claimed to be P2P in the early days - avoiding OTHER airline's hubs, they are very much a hubbed system themselves.

I agree entirely. Others here on A.net seem to deny that, though I estimate about 2/3 of my flying on WN involved changing a plane in PHX, LAS, MCI, OAK, or MDW, and it wasn't difficult. So, there you have a very successful airline with perhaps a dozen hubs.

-Rampart
 
PanAm747
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 2:21 am

The question, in my opinion, is not "can an airline have too many hubs?", but more a matter of "are the hubs profitable?".

The key for an airline's hub operations is a strong O&D passenger count. EWR is a cash cow for CO, and with the fuel-efficient 757, smaller airports in Europe can be served that might not have the demand that PHL, BOS, ATL, or even ORD might have. The same is very true for UA and SFO - the Asia market is enormous.

Airlines may have multiple hubs, but they are free to close them down if they are not working - AA at BNA and RDU, CO at DEN, DL at DFW, US at BWI, and so on. The hubs that the United States has now, with the possible exception of MEM for NW (I'm not sure of its status it is so small!), are working quite well for the airlines.
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 2:26 am

Quoting InnocuousFox (Reply 2):
you can't connect any two points without a convenient UA hub between them.

UA is weak in the southeast though...I guess thats where the US codeshare comes in. In terms of east west traffic IAH is fine--its really those folks in the midcontinent that want to go west that would bypass CO. If you think about it COs hubs connect east west well in terms of large population centers. DEN is pretty much the only place CO could set up an effective hub out west--I hate they let that one go.
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787EWR
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 2:29 am

Quoting Rampart (Reply 6):
WN has a number of hub-like cities, not banked like a traditional hub, but certainly similar in flight volume and opportunites for connections. Doesn't hurt them much.

I didn't read every entry, but looking at WN, wouldn't you say that their hubs are as follows:

KPHX
KMDW
KBWI

"Focus Cities"

KLAX
KOAK
KPHL

I don't mention DAL only due to the fact that they are limited as to where they can fly.
 
floridaflyboy
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 2:32 am

Quoting 787EWR (Reply 19):
I didn't read every entry, but looking at WN, wouldn't you say that their hubs are as follows:

KPHX
KMDW
KBWI

I would definitely add LAS to that list, and add DAL to the focus city list. Even thought there are a lot of cities with much much more service than DAL, it is a very important part of the Southwest system, and I believe it is or was in their list of top destinations in terms of departures.
Good goes around!
 
twa@fra
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 2:33 am

" While other hubs are focused on large O&D demand,"

IMO this is also a key point by considering if a HUB strategy is o.k.
As for CO EWR should be quite good as it have a lot of O&D traffic, while compared to e.g. AA (or former TWA) @ STL which should be perfect HUB geographically do not have sufficient O&D traffic and at least not high yield. So the most City’s with high Yield traffic are at the US Coast’s and leaving more or less ORD as the "only" high yield inland HUB. This might be one reason that many HUB layouts do not look logical at the first sight (and that ORD have two major Airlines).
 
drerx7
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 2:39 am

Quoting 787EWR (Reply 19):
I didn't read every entry, but looking at WN, wouldn't you say that their hubs are as follows:

KPHX
KMDW
KBWI

"Focus Cities"

KLAX
KOAK
KPHL

I don't mention DAL only due to the fact that they are limited as to where they can fly.

All you can really say about WN is what their largest stations are- I think this listing will change by the end of the summer though with HOU possibly sliding on top of OAK. Daily Departures/Number of Gates/Nonstop destinations
Las Vegas 225 21 53
Chicago Midway 218 29 47
Phoenix 207 24 42
Baltimore/Washington 173 26 38
Oakland 142 11 20
Houston Hobby 141 17 28
Dallas (Love Field) 127 14 14
Los Angeles (LAX) 118 11 19
Orlando 100 12 32
San Diego 92 10 15
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Lemurs
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 2:42 am

Quoting Twa@FRA (Reply 21):
the most City’s with high Yield traffic are at the US Coast’s and leaving more or less ORD as the "only" high yield inland HUB.

True, but you don't have to have a top-5 market hub to still make it work. There are midland hubs that do quite well for their airlines, MSP being a good example. The O&D market and connecting traffic from the west do a nice turn for NW from the western states. It's not ORD, but it doesn't have to be...
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787EWR
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 2:43 am

Quoting Fjnovak1 (Reply 8):
I've often wondered why an airline hasn't tried to start a PIT or CLE sizxd hub in SMF... its the state capital of the fifth-largest economy in the world (California)...and its located in a region that geographically will just keep growing...I would think that, given the right selection of destinations, an operation that used 40 or so RJ's (145/145XR types or EMB-170's), a couple of turboprops of some kind (maybe 10 or so Q400's) and some 737's for east coast destinations perhaps would be quite successful. Sacramento would be an easy place to connect to go just about anywhere within CA, AZ, and NV to other western destinations, including the rockies and pacific northwest

Unfortunately, it may be the fact that SMF is not seen as a commercially viable destination. By this, I mean their commercial productivity is not as high as Los Angeles or San Francisco which are traditional hubs and also major American(USA) cities.

I think what attracts airline hubs is the ability to generate passengers. American tried it at San Jose, which was a hot spot to be in during the Silicon ValleyInternet boom days. Once that all went away, the hub suffered and was eventually down graded.

I would further agree with a post in the thread that said that PIT was difficult to maintain. Pittsburgh has strong commercial value, but not as strong as Philadelphia which now has technology, textile and some financials, plus a very strong shipping port.

The fact that Charlotte has now attracted Bank of America, Wachovia and several other financial giants, makes it a great hub location. Kudos to US Air for creating and developing that location. highfive 
 
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SLCUT2777
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 2:45 am

Quoting Floridaflyboy (Reply 15):
I agree. SLC is positioned better to serve California, and the pacific Northwest. It is also in a position where you aren't backtracking at all if you're coming out of somewhere like Montana and heading to California.

The folks in the Pacific Time Zone hate it however if they are going like GEG-LAX etc (DEN would be much worse in such a scenario though). But you're right that a GTF-SAN flight via SLC works great.
The biggest knock however with DL's hub at SLC has been only a moderate level of O&D when compared with nearby DEN, PHX or LAS. But what many of these SLC critics don't realize is that the Wasatch Front has over 2 million inhabitants and only one commercial airport. They only look at the population of SLC proper and see 185,000 (people around here hate any city of over 20,000!) and s-bomb a brick! That said, DL is able to serve many smaller airports in California and the Pacific Northwest from SLC that UA has difficulty doing from DEN as well as LAX and SFO.
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787EWR
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 2:47 am

Quoting Floridaflyboy (Reply 20):
I would definitely add LAS to that list, and add DAL to the focus city list. Even thought there are a lot of cities with much much more service than DAL, it is a very important part of the Southwest system, and I believe it is or was in their list of top destinations in terms of departures

You are absolutely correct. My mistake. I neglected to include LAS which I think has WN's largest volume of flights.

Cheers.
 
787EWR
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 2:48 am

Quoting Drerx7 (Reply 22):
All you can really say about WN is what their largest stations are- I think this listing will change by the end of the summer though with HOU possibly sliding on top of OAK. Daily Departures/Number of Gates/Nonstop destinations
Las Vegas 225 21 53
Chicago Midway 218 29 47
Phoenix 207 24 42
Baltimore/Washington 173 26 38
Oakland 142 11 20
Houston Hobby 141 17 28
Dallas (Love Field) 127 14 14
Los Angeles (LAX) 118 11 19
Orlando 100 12 32
San Diego 92 10 15

Thanks for the information.
 
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 3:04 am

Going back to the original question, several analysts claimed that the U.S. overall is overhubbed. If you can maintain a fortress hub, you own the market but almost by definition there will be far more service than is warranted by the size of the hub's local market. If there are too many hubs, then there will be trouble feeding the hub and the airline will have to decide to support it or back down. UA has four full size hubs and they were under tremendous pressure during Ch. 11 to get rid of one.

Where an airline can be overhubbed is where the hub is in a smaller metropolitan area or has a relatively remote or weak feed. Of course it is difficult to establish a major hub in a large city. Having badly placed hubs or ones in marginal cities, particularly during an economic downturn can be a huge liability. One of the reasons AA has stayed clear of bankruptcy was its willingness to abandon hubs, no matter what it cost to build them. AA was often criticized for buying into and then abandoning the west but UA stayed because of its SFO hub and got pounded by WN.
 
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 3:37 am

Quoting InnocuousFox (Reply 2):
PIT and PHL both. As you mentioned, that was due to prior mergers

Actually, those were both USAir (pre-Piedmont merger) hubs. I agree, though, it didn't make a whole lot of sense to have both in the scale that they originally were.

Too many hubs? Theoretically, but I can't think of a current example. As mentioned, UA & DL probably come the closest to covering the whole country in the most convenient fashion. They each have their weak points. As long as you are revenue positive in all your operations, you should be okay. As it stands now, the US market probably still suffers from overcapacity as a whole, however.

Cheers,
Dave in Orlando
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vega
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 5:50 am

Quoting 787EWR (Reply 24):

I would further agree with a post in the thread that said that PIT was difficult to maintain. Pittsburgh has strong commercial value, but not as strong as Philadelphia which now has technology, textile and some financials, plus a very strong shipping port.

The fact that Charlotte has now attracted Bank of America, Wachovia and several other financial giants, makes it a great hub location. Kudos to US Air for creating and developing that location.

There is really a significant difference between the CLT and PHL hubs - both for US and other airlines.
These are the rounded stats for both:
CLT (12 Months - DOMESTIC ONLY) - 28M Total/18M US Passengers - 7M Total O&D
PHL (12 Months - DOMESTIC ONLY) - 28M Total/13M US Passengers - 18M Total O&D

The obvious difference, even though each airport has very close total Domestic traffic, is that PHL's O&D is much larger and therefore generates significantly higher revenue traffic than CLT. This is an example of having 2 major hubs, which serve 2 different main purposes - a high O&D hub (PHL) and a primarily Connecting Hub (CLT). These figures do NOT include International traffic from either airport, because CLT is principally Caribbean destinations with only 2 Trans-Atlantic flights and PHL is primarily Europe. On another note, PIT's Domestic O&D is actually slightly higher than CLT, so a better comparison of Hubs is PIT and CLT, not PIT and PHL. CLT in fact essentially mirrors PIT's previous status, before PIT was dehubbed..
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rampart
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 6:18 am

Quoting Drerx7 (Reply 22):
Quoting 787EWR (Reply 19):
I didn't read every entry, but looking at WN, wouldn't you say that their hubs are as follows:

KPHX
KMDW
KBWI

"Focus Cities"

KLAX
KOAK
KPHL

I don't mention DAL only due to the fact that they are limited as to where they can fly.


All you can really say about WN is what their largest stations are- I think this listing will change by the end of the summer though with HOU possibly sliding on top of OAK. Daily Departures/Number of Gates/Nonstop destinations
Las Vegas 225 21 53
Chicago Midway 218 29 47
Phoenix 207 24 42
Baltimore/Washington 173 26 38
Oakland 142 11 20
Houston Hobby 141 17 28
Dallas (Love Field) 127 14 14
Los Angeles (LAX) 118 11 19
Orlando 100 12 32
San Diego 92 10 15

I don't know where I would divide "hub" vs "focus city", because a lower end city on WN's network with, say, 6 non-stop cities, practically qualifies for "focus" on some of the other airlines. We'd all have an opinion and perhaps not much agreement. In the list from Drerx7, I see a spectrum, all with high volume, all with connecting opportunities, with the possible exception of SAN, which slips below 100 daily departures (still quite a lot!) and with sub-optimal connecting possibilities. All the rest, WN don't define as "hubs", but as mentioned above, certainly compare with what the other airlines offer, from B6 and AS on the small end to the majors on the high end (accepting that DL in ATL, UA in DEN and AA in DFW are simply astronomical).

-Rampart
 
Alias1024
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 7:31 am

Quoting InnocuousFox (Reply 2):
Much of it has to due with the locations of them. For a truly major airline, CO has a crappy hub layout. With IAH being so far south and EWR being so far northeast, it is not conducive to connections. For example, here in OMA, I am not going to select CO to go anywhere west of the Rockies - especially the Northwest.

Probably one of the best hub arrangements is UA. They can connect in DEN or ORD to get good coverage anywhere. Up and down the east coast, connect at IAD. On the west coast, use SFO or LAX. Really, you can't connect any two points without a convenient UA hub between them.

Two networks built for two different purposes. CO has a great hub setup if you are trying to get to Europe (EWR) or Central and South America (IAH). They have developed CLE to take the overflow of domestic passengers connecting to the Northeast from the rest of the country. Obviously the west coast and Asia are weaknesses. That GUM hub is great too if you are trying to get to the South Pacific. UA has a great network for domestic connections and Asia, and IAD is positioned well for Europe traffic, however non-existent to Central and South America.

People keep speaking of DL's hub setup being great, however I just don't see it. It's good, but isn't any better than UA or CO. Just like the others, it doesn't cover everything. Five hubs and they still can't get me to Asia on their own metal unless I am trying to get to Narita and feel like back tracking to ATL. Also, they are far too reliant on ATL. It's really their only great hub, with high O&D and several traffic flows.

Quoting Fjnovak1 (Reply 8):
I've often wondered why an airline hasn't tried to start a PIT or CLE sizxd hub in SMF... its the state capital of the fifth-largest economy in the world (California)...and its located in a region that geographically will just keep growing...I would think that, given the right selection of destinations, an operation that used 40 or so RJ's (145/145XR types or EMB-170's), a couple of turboprops of some kind (maybe 10 or so Q400's) and some 737's for east coast destinations perhaps would be quite successful.

I think that would be way big a hub. The O&D wouldn't be too bad, but it would only really be serving the north/south traffic flow along the west coast. But I could definately see a focus city by either ExpressJet or Alaska/Horizon being very successful in connecting Eastern Washington and Oregon, Idaho, and Montana with SoCal, Nevada, and Arizona.
It is a mistake to think you can solve any major problems with just potatoes.
 
CIDFlyer
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 7:48 am

Quoting BosWashSprStar (Reply 5):
I believe its ORD operation, UA's largest, is now smaller than AA's ORD operation).

actually I think UA is still larger than AA there, I think UA runs about 630 daily flts (mainline and express) compared to AA's 500 daily (mainline and Eagle). I don't have concrete evidence but that is what I have read in places on here before.

Quoting Rampart (Reply 6):
AA considers themselves as still having 8 hubs, according to their corporate information: ORD, DFW, LAX, BOS, MIA, JFK, LGA (?!), and SJU.

per wikipedia they have 5 main hubs :
DFW, ORD, MIA, STL, SJU
Focus Cities are:
JFK, LAX, BOS, LGA
http://en.wikipedia.org/wiki/American_airlines


According to the AA route map (bolded cities are hubs), the hubs are DFW, STL, ORD, MIA, LGA, BOS, JFK
http://www.aa.com/content/aboutUs/whereWeFly/maps/sc_us_aa.jhtml


I would also consider AUS and RDU to be AA focus cities as well.
 
InnocuousFox
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 7:50 am

Quoting Alias1024 (Reply 32):
People keep speaking of DL's hub setup being great, however I just don't see it. [snip] Also, they are far too reliant on ATL. It's really their only great hub, with high O&D and several traffic flows.

Absolutely. If you were to do a statistical analysis (which I do) of the "weight" of O&D traffic to the rest of the system (not to ATL) on various sides of ATL, the "center of gravity is way northwest of Georgia. That is, the farther away a hub is from that "center of gravity" the less efficient it is to connect through there. Going from a mid-sized city in New England to a mid-sized city in the plains is not efficient whatsoever via ATL.

With regard to the SMF discussion, remember that there is a 2nd way to treat high O&D cities without making them a hub or focus city... direct traffic. If you are connecting many of your larger, non-hub cities directly to somewhere, you are pulling that market traffic out of the nearby hub's flow. That leaves the hub-to-city traffic more available for the stuff you don't want to run direct from. This is hard to describe without a diagram or example - and I don't have the time for it right now.

Trust me, though... when you are designing an airline management simulation with absolutely brutal artificial intelligence for the airlines, you have to parameterize a LOT of things. It makes you think about how the real world does stuff and break it down into component concepts.  Smile
Dave Mark - Intrinsic Algorithm - Reducing the world to mathematical equations!
 
walter747
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 8:22 am

Quoting BDL2DCA (Reply 3):
They consider DCA, PIT and LAS to be "focus cities," which means the flights are aligned more for O&D traffic and less for banks of departures.

Don't forget BOS. Actually US considers PIT a secondary hub.
Hussel, Hussel, Husel, Grind, Grind, Grind
 
kalakaua
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 8:46 am

Would anyone care to explain the pros and cons of the macroeconomics of the hub and spoke?
Gravity explains the motions of the planets, but it cannot explain who set the planets in motion.
 
InnocuousFox
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 9:03 am

Quoting Kalakaua (Reply 36):
Would anyone care to explain the pros and cons of the macroeconomics of the hub and spoke?

I can, but it's a whopper. Do you really want me to?
Dave Mark - Intrinsic Algorithm - Reducing the world to mathematical equations!
 
LHStarAlliance
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 9:05 am

Quoting EmSeeEye (Thread starter):

weren´t the too many hubs one of the reason for PanAms bankruptcy ??
Boycott The Olympic Games In Beijing !
 
SESGDL
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 9:06 am

Quoting CIDflyer (Reply 33):

actually I think UA is still larger than AA there, I think UA runs about 630 daily flts (mainline and express) compared to AA's 500 daily (mainline and Eagle). I don't have concrete evidence but that is what I have read in places on here before.

UA is indeed larger at ORD, with about 300 mainline and 330+ Express flights. AA is down to about 230 mainline flights at ORD and more than 270 Eagle flights. Either way, both maintain fortress hubs, the only airport in the country to have two.

Jeremy
 
steeler83
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 9:18 am

Quoting Kalakaua (Reply 36):
Would anyone care to explain the pros and cons of the macroeconomics of the hub and spoke?

Well, I can think of quite a few pros as well as some cons...

Well, let me begin with a general reason for the whole hub and spoke system.

You/we all know that deregulation began in 1978 with the deregulation act of the airports. Before then, air travel was mostly point to point. Some airlines did have rather large bases at selective airports, primarily airports where the main HQ was located, (AA at DFW, UA at ORD, US-Allegheny at PIT, DL at ATL, etc...) Air travel was increasing very rapidly, especially during the course of the 1960s and 1970s if I recall. This would mean that in order to adequately serve the growing demand in air travel, that airlines would have to order/buy more planes and increase capacity. With the hub and spoke system, airlines can carry more pax from point A to point B, but they have to travel through another airport in order to do so. This could be a con, especially if you're trying to get from BUF to LAX on DL and have to connect in either JFK or ATL.

So, some pax may have to travel a little out of their ways to make connections at a given airline's hub airport(s). However, if not for the hub and spoke system, in a nutshell, there would be tons of confusion, along with many airports over capacity.
Do not bring stranger girt into your room. The stranger girt is dangerous, it will hurt your life.
 
mpdpilot
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 9:36 am

Quoting InnocuousFox (Reply 34):
Absolutely. If you were to do a statistical analysis (which I do) of the "weight" of O&D traffic to the rest of the system (not to ATL) on various sides of ATL, the "center of gravity is way northwest of Georgia. That is, the farther away a hub is from that "center of gravity" the less efficient it is to connect through there. Going from a mid-sized city in New England to a mid-sized city in the plains is not efficient whatsoever via ATL.

Thats what CVG is for. I think the only weak area would be the North-South in the central US. East to west though and even on the western US they are pretty solid. much better than AA and CO for sure. Not to mention that I think they have the northeast and florida all tied up.
One mile of highway gets you one mile, one mile of runway gets you anywhere.
 
FL370
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 9:41 am

i think UA has the best hub locations!! one of the fastes airlines i mean you can fly into 5different hubs and go anywhere in the country!!!


fl370
 
donder10
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 6:26 pm

Quoting Kalakaua (Reply 36):
Would anyone care to explain the pros and cons of the macroeconomics of the hub and spoke?

The main pro of a hub is that results in ''economies of density" at the hub because more traffic is routed through it allowing the hub operator to use larger and more efficient aircraft.
 
Rafabozzolla
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 6:54 pm

Quoting FL370 (Reply 42):
i think UA has the best hub locations!! one of the fastes airlines i mean you can fly into 5different hubs and go anywhere in the country!!!

Not if you want to go from Florida and Georgia to Texas or New Mexico.
 
kalakaua
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 7:10 pm

Quoting InnocuousFox (Reply 37):
I can, but it's a whopper. Do you really want me to?

I'd love to hear it anyway!
Gravity explains the motions of the planets, but it cannot explain who set the planets in motion.
 
InnocuousFox
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 10:26 pm

With a simple mathematical example...

Let's say you have 10 cities (non-hub) and one hub. Let's assume that you have a demand of 10 pax/day between each pair of cities. That means each city is sending out 100 pax per day - 90 to other cities as 10 to the hub - and receiving 100 pax per day. If you were to do point to point traffic ONLY, you would have to have a flight from each city, to each city. That means, you would have to run 10 flights of 10 pax each. With 11 different origins, that means you have to run 110 flights of 10 people each.

Now, if you were to select one city as a hub (with 10 feeders), you could run one flight of 100 people to the hub where they could now connect to other flights. In return, you pick up 100 people to come back (that have just arrived from the other places). So now, you have moved the same number of people with 20 flights (10 in and 10 out) of 100 pax each.

In the real world, the number of city pairs that actually justify their own flights is very limited. Figure 2/3 of the cities don't have huge traffic to that same 2/3. The numbers get unweildy rather quickly. If you were a carrier serving 300 domestic destinations, that makes for 90000 flights just to connect each pair ONCE.

Also, imagine a city of 100,000 people getting 300 flights in one day simply because they have to accomidate pax that may want to travel to one of the other 300 destinations. However, that same city of 100,000 may have 500 people flying that day. Enough for 4 737s to the hub. From there, those 500 people can scatter to ANY of the other destinations.

Make sense?
Dave Mark - Intrinsic Algorithm - Reducing the world to mathematical equations!
 
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TWA1985
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 11:11 pm

Lets not forget the classic Republic Airlines story. They were rapidly losing money in 1984 and when the new CEO came onboard later that year he devised the largest route shifting ever to occur as of that time. RC went from having hubs in MSP, DTW, ORD, MKE, PHX... to having hubs in only MSP, DTW, and MEM (New as of October 1984).

That saved RC and by the end of 1985 they were operating with a proffit.

But we must also remember that DL and NW operated out of ORD with pretty signifigant operations and seemed to bemaking money- from what I read. TW and EA also were doing pretty good out of ORD in the 80's. But it was only a matter of time before all those airlines shifted to the "main hub" concept which I guess worked better in the end as AA and UA were bullying into the other airlines ORD markets and trying to push them out- especially UA!

TWA1985
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masseybrown
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 11:28 pm

Quoting InnocuousFox (Reply 2):
Probably one of the best hub arrangements is UA.

This thought is echoed in several replies. Why then is UA so desperate for a merger?

Their proliferation of hubs is oriented to over-support a profitless domestic operation and has so diffused their marketing attention that they have lost big South America and European markets more or less through inattention.

So I'd say UA has too many hubs.
 
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OzarkD9S
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RE: Can An Airline Have Too Many Hubs?

Tue May 01, 2007 11:37 pm

Quoting LHStarAlliance (Reply 38):


weren�t the too many hubs one of the reason for PanAms bankruptcy ??

There were many many reasons for the downfall of Pan Am, but too many hubs was not one of them. After the National acquisition PA tried to build IAH into a domestic hub, unfortunately against a merged Continental/Texas International. Pan Am also suffered from work rules that were geared towards international operations, not domestic ones. This lack of productivity resulted in PA lacking even one significant domestic hub. IMHO the $$$ PA got for the Pacific division should have been re-invested in another domestic carrier, my preference at the time would have been Piedmont. Complimentary fleets, with CLT/DAY/BWI and SYR hubs well placed to feed the international ops at MIA and JFK.
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