JaxMan19
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What U.S. Airline Hub Makes The Most Money?

Sun Nov 13, 2011 5:39 pm

I was just curious Which U.S. hub makes the most money, not in a sense of overall revenue because im pretty sure DL at ATL and AA at DFW would take that crown. I'm talking about which Hub makes the most money on the basis of flights to passenger ratio. I've heard SFO and MIA are very profitable hubs based on that ratio...anyway do you guys have any information on this?
 
United1
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RE: What U.S. Airline Hub Makes The Most Money?

Sun Nov 13, 2011 5:45 pm

Quoting JaxMan19 (Thread starter):
I'm talking about which Hub makes the most money on the basis of flights to passenger ratio. I've heard SFO and MIA are very profitable hubs based on that ratio...anyway do you guys have any information on this?

Its been reported on here before that EWR generates the highest amount of revenue using the metric you are looking for. ATL generates the highest total amount of revenue of any airline hub.
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tommy767
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RE: What U.S. Airline Hub Makes The Most Money?

Sun Nov 13, 2011 5:48 pm

Quoting United1 (Reply 1):

Its been reported on here before that EWR generates the highest amount of revenue using the metric you are looking for. ATL generates the highest total amount of revenue of any airline hub.

Well with EWR we really have no proof that it generates the highest amount of revenue. It's primarily rumor based.

But the top 5 would probably be something like:

1. DL at ATL
2. AA at MIA
3. UA at EWR
4. DL at MSP
5. UA at SFO
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roseflyer
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RE: What U.S. Airline Hub Makes The Most Money?

Sun Nov 13, 2011 6:05 pm

Very hard to tell, but a highly constricted airport that is either slot or gate limited with little competition and a high percentage of international flights would be the most profitable (LHR for BA and FRA for LH are by metrics I have seen are the most profitable hubs).

In the United States, there aren't such hubs. With the exception of DCA, LGA and ORD (gate limited), any airline is free to enter any market where yields may be high.

I would suspect that the fortress hubs with limited competition are near the top. Someone can post average yields, but I would think that DL at ATL, AA at DFW and UA at EWR do rank high. I don't think it would be LGA or DCA since there aren't high yielding longer haul routes.

Discounting international routes, I believe AS in ANC has the highest margins.
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Jonathanxxxx
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RE: What U.S. Airline Hub Makes The Most Money?

Sun Nov 13, 2011 6:12 pm

I think the hubs with the least competition, yet are very large markets yield the highest profits. Which is why in my opinion, SFO and MIA are very profitable for UA and AA respectively. Not only do they have significant profitable international service they also have little to no competition on most routes. Just look at MIA. You have places like MIA-LIM where MIA has tons of demand yet the only competition is AA's partner LA. In my opinion the hub that has all the factors of an extremely profitable hub is MIA.

EDIT: Shouldn't we include some LCC's?

In that case I think the international network out of FLL for NK is doing pretty well. For their size and the amount of profits they've reported. It has to be good. Another one could be B6 at SJU, albeit not a hub but it's definitely expanding profitably.

[Edited 2011-11-13 10:51:27]
 
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RE: What U.S. Airline Hub Makes The Most Money?

Sun Nov 13, 2011 6:14 pm

Quoting TOMMY767 (Reply 2):
But the top 5 would probably be something like:

1. DL at ATL
2. AA at MIA
3. UA at EWR
4. DL at MSP
5. UA at SFO

I would highly doubt MSP being more profitable than say, AA at DFW, UA at IAH, or DL at JFK. Logic dictates that those hubs with the largest local markets that serve a significant number of international destinations would be most profitable.

And, for what its worth, I believe Newark was supposed to be wildly profitable for CO.
 
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RE: What U.S. Airline Hub Makes The Most Money?

Sun Nov 13, 2011 6:48 pm

Quoting Lambertman (Reply 5):

There was an earnings call in 2010 where DL mentioned that ATL and MSP were their most profitable hubs, ahead of JFK.
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RE: What U.S. Airline Hub Makes The Most Money?

Sun Nov 13, 2011 6:57 pm

With the possibility of SFO going back to slot restrictions I would think if you are looking on a revenue per flight basis it's got to be up there... even with VX and WN taking some market share. A lot of transpac flights for UA and if the FAA restricts how many planes can get in there that's only going to help.
 
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RE: What U.S. Airline Hub Makes The Most Money?

Sun Nov 13, 2011 7:02 pm

Quoting Lambertman (Reply 5):
I would highly doubt MSP being more profitable than say, AA at DFW, UA at IAH, or DL at JFK. Logic dictates that those hubs with the largest local markets that serve a significant number of international destinations would be most profitable.

You have to look at the overall context. MSP is a high-yielding market just on an O&D basis, and then DL has practically no competition except for Sun Country which I don't think even really counts. But again, in the framework of looking at which hub is most profitable....number of international destinations and the size of the market aren't really that relevant. While MSP is smaller than NYC, DL is probably getting more high-yielding pax out of MSP with exponentially less competition, for these reasons I could easily believe MSP is one of the most profitable hubs in the US.
 
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RE: What U.S. Airline Hub Makes The Most Money?

Sun Nov 13, 2011 7:02 pm

Quoting TOMMY767 (Reply 6):
There was an earnings call in 2010 where DL mentioned that ATL and MSP were their most profitable hubs, ahead of JFK.



JFK is much smaller than MSP, it's possible MSP is more profitable but on a per seat basis it's possible JFK is more profitable. Not saying that's so, just pointing out there are two different rubrics.
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tommy767
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RE: What U.S. Airline Hub Makes The Most Money?

Sun Nov 13, 2011 7:11 pm

I wonder if AA at MIA is more profitable than DFW. Thoughts?

Quoting flyguy89 (Reply 8):
While MSP is smaller than NYC, DL is probably getting more high-yielding pax out of MSP with exponentially less competition, for these reasons I could easily believe MSP is one of the most profitable hubs in the US.

Exactly. For DL and MSP, it's not about international traffic at all. Their bread and butter is nearly all domestic. Plus DL is swarmed with insane competition out of JFK. Not to mention that DL out of MSP serve many destinations in the upper midwest and great plains that not too many other airlines serve with the exception of UA out of ORD or DEN. Add in the MASSIVE amount of corporate contracts that DL inherited from NW, and it's not too hard to realize that MSP is a big winner for DL.

Quoting STT757 (Reply 9):
JFK is much smaller than MSP, it's possible MSP is more profitable but on a per seat basis it's possible JFK is more profitable. Not saying that's so, just pointing out there are two different rubrics.

Not to mention there are a ton of DL RJ's out of JFK on domestic routings -- not exactly the most cost effective in most cases. I actually wonder if B6 is more profitable than DL out of Kennedy, at least domestically?
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RE: What U.S. Airline Hub Makes The Most Money?

Sun Nov 13, 2011 7:15 pm

Quoting flyguy89 (Reply 8):
You have to look at the overall context. MSP is a high-yielding market just on an O&D basis, and then DL has practically no competition except for Sun Country which I don't think even really counts. But again, in the framework of looking at which hub is most profitable....number of international destinations and the size of the market aren't really that relevant. While MSP is smaller than NYC, DL is probably getting more high-yielding pax out of MSP with exponentially less competition, for these reasons I could easily believe MSP is one of the most profitable hubs in the US.

I realize what factors are in play. I wouldn't consider Minneapolis a high-yielding market in comparison to New York, though. I'll stand by my assertion that JFK is a better performer than MSP for DL.

And as for the conference call, there are a lot of ways to determine "profitability".
 
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RE: What U.S. Airline Hub Makes The Most Money?

Sun Nov 13, 2011 7:25 pm

Quoting TOMMY767 (Reply 10):
I actually wonder if B6 is more profitable than DL out of Kennedy, at least domestically?

I would think so. They fly more domestic than any other JFK airline IIRC, and I doubt CRJs have anything against 320s and the bigger ERJs, even if B6 charges low prices
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RE: What U.S. Airline Hub Makes The Most Money?

Sun Nov 13, 2011 7:32 pm

"I would think so. They fly more domestic than any other JFK airline IIRC, and I doubt CRJs have anything against 320s and the bigger ERJs, even if B6 charges low prices"

Lower costs operational wise, bigger aircraft with lower seat mile costs, more domestic flights, fewer connecting pax . . . all equals more profit at JFK for B6 than DL.

T5 payments have to be factored in thought vs the T2/3 dump across the field. However, with DL adding a new wing to T4, their terminal costs just went up.

That said, it is not a fair comparison. International is where the real $$ is, DL has it . . . B6 doesn't. How do you compare B6 and DL on BUF-JFK when it is feeding DL on a flight to CDG vs B6 on a flight to MCO. Hard to do.

Just by route expansion and recent moves, I would say most B6 shorthaul out of JFK IS NOT profitable where longer, leisure and VFR routes are.
 
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RE: What U.S. Airline Hub Makes The Most Money?

Sun Nov 13, 2011 7:44 pm

Quoting jfklganyc (Reply 13):

I agree, and I did not catch him implying more profitable overall. I think DL gets way more revenue and probably way more operating profit. As far as margins go, probably DL again due to the international flying. But domestic ONLY, probably B6. But again, DL for the most part doesn't care about domestic, it's mainly there to feed international
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 4:20 am

Quoting DeltaMD90 (Reply 14):

I agree, and I did not catch him implying more profitable overall. I think DL gets way more revenue and probably way more operating profit. As far as margins go, probably DL again due to the international flying. But domestic ONLY, probably B6. But again, DL for the most part doesn't care about domestic, it's mainly there to feed international

Makes me wonder how AA does at JFK compared to DL or B6? I would think not nearly as good.
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 4:31 am

With the stock price of AA and the posted losses over the past 10 years I don't think AA is making money at any of their HUBS. Current stock price is $2.25 I don't think that is the price of a profitable company.
 
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 4:42 am

Quoting STT757 (Reply 9):

JFK is much smaller than MSP, it's possible MSP is more profitable but on a per seat basis it's possible JFK is more profitable. Not saying that's so, just pointing out there are two different rubrics.

I would guess that JFK is not profitable at all for DL. DL traditionally has struggled with yields at JFK and often has the lowest fares to many major cities from JFK. DL's strategy at JFK has seemed to be "win at all costs" and they simply can't do that by neglecting major markets, regardless of whether they are losing money. DL's goal has been to grow in NYC, something that takes time and lots of money, which is something that DL seems committed to.

Quoting Lambertman (Reply 11):

I realize what factors are in play. I wouldn't consider Minneapolis a high-yielding market in comparison to New York, though. I'll stand by my assertion that JFK is a better performer than MSP for DL.

MSP is far and away a higher yield market than JFK for DL, simply look at average fares for the two markets. Fares at MSP are some of the highest in the country, combine that with the fact that JFK is heavily skewed toward international and long-haul flights and still has lower average fares and it's not hard to imagine that MSP is a higher yielding market. Let's not forget that JFK's second largest airline is a low-fare carrier that routinely advertises cross-country flights for less than $300 roundtrip and that DL almost always matches these low fares.

Judging by overall revenue, I'd venture to guess that ATL is the largest hub in the country, followed by EWR and DFW, with IAH, ORD (for UA) and MIA somewhere in the mix as well. These statistics were listed in an article years ago that cited EWR as the highest revenue hub in the country around 2006-2007, but DL's operation has grown dramatically at ATL since then, especially in terms of international traffic.

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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 4:44 am

Quoting gizmonc (Reply 16):
With the stock price of AA and the posted losses over the past 10 years I don't think AA is making money at any of their HUBS. Current stock price is $2.25 I don't think that is the price of a profitable company.

True, but I don't think it is due to its hubs. I think once AA cleans up its mess, they'll be a strong 3rd in NYC (4th if you consider EWR.) And NYC is big enough for 4 big ones IMO, just like LAX can somewhat sustain 4 big operations...
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 5:00 am

Maybe a better question would be, what hubs are loosing money?

The largest airline hubs this summer were:

1. DL at ATL
2. AA at DFW
3. US at CLT
4. CO at IAH

I'm sure all of the above are making money. And if a hub doesn't make money, or starts to loose money there, they'll quickly pull the hub and move traffic somewhere else.
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 5:13 am

Quoting USAirALB (Reply 19):
I'm sure all of the above are making money. And if a hub doesn't make money, or starts to loose money there, they'll quickly pull the hub and move traffic somewhere else.

I'm not sure I agree here. Small hubs can be profitable as well. Most hubs have an optimal size which produces the highest yields. For example: CVG is constantly one the the most expensive O&D markets in the country, I would venture to say that DL's hub there (albeit very small these days) is quite profitable. The same has been mentioned about AS@ANC.

However, I do not have any numbers - if anyone has any more info on CVG - please chime in.

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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 5:57 am

I'd imagine unprofitable MIGHT be AA @ ORD, US @ LGA (pretty sure about that), and DL's @ NRT can be at times, but I don't think all the time
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 12:37 pm

Don't count out MSP...I can see how JFK wouldn't be as profitable due to all of the competition, and compare that to the int'l routes served by MSP....? Maybe we're not comparing apples to apples, but I could see it being very profitable based on DL running the place and I'm sure the city is somewhat friendly from a financial standpoint to keep DL there...
 
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 1:10 pm

Quoting Lambertman (Reply 11):
I wouldn't consider Minneapolis a high-yielding market in comparison to New York, though.

Again, as others have mentioned - DL doesn't really have to compete with anyone at MSP for foreign or domestic, whereas in NYC, DL has to compete with other airports and a dominant LCC airline for domestic and foreign airlines for int'l. MSP has Southwest and Sun Country, but neither operate at a scale to truly give DL any real intense competition.
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 1:34 pm

Quoting JaxMan19 (Thread starter):
I'm talking about which Hub makes the most money on the basis of flights to passenger ratio. I've heard SFO and MIA are very profitable hubs based on that ratio...anyway do you guys have any information on this?

Please further explain this metric, as I'm not to sure what you mean.
 
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 1:58 pm

Quoting DeltaMD90 (Reply 21):
I'd imagine unprofitable MIGHT be AA @ ORD

Considering that AA's entire operation (ok 95%) consists of DFW, MIA, JFK/LGA, ORD, and LAX and that in aggregate their entire operation is hugely unprofitable it is a safe assumption that ORD, NYC, and LAX are all unprofitable for AA. (I assume that based on lack of competition DFW and MIA are AA's best performers and the losses have to be coming from somewhere and if they were isolated to one poor performing hub one would think AA would drop it, therefore if not all of theirs hubs unprofitable (which is possible) those three almost certainly are unprofitable).
 
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 2:58 pm

Quoting TOMMY767 (Reply 2):
1. DL at ATL

If we were talking about total revenue I would agree with you but the OP is asking about either Yield or PRASM and I doubt is ATL is in the top 5 when it comes to either of those. Simply because while ATL has allot of passengers the majority of those passengers are connecting and connecting flights don't usually generate as high a PRASM/Yield as O&D based traffic does.
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 3:14 pm

Quoting STT757 (Reply 9):
JFK is much smaller than MSP, it's possible MSP is more profitable but on a per seat basis it's possible JFK is more profitable. Not saying that's so, just pointing out there are two different rubrics.
Quoting Lambertman (Reply 11):
I realize what factors are in play. I wouldn't consider Minneapolis a high-yielding market in comparison to New York, though. I'll stand by my assertion that JFK is a better performer than MSP for DL.

And as for the conference call, there are a lot of ways to determine "profitability".

MSP is highly profitable using every metric. Its also highly consistent. If there are stronger financial performers in the U.S. domestic arena, they are few and far between. The reason that MSP hasn't grown and JFK has is that MSP is already pretty much fully-developed. It is an appropriate size. NYC is a much stronger growth opportunity for Delta, which is why the effort has been put in there. NYC is about the future...and part of the reason that Delta can afford to invest there is because MSP is so solid.

Regarding ATL, it is much stronger than most people here seem to think. Ask yourself why Delta would have spent the past couple of years swapping mainline equipment from DTW and MSP with RJs from ATL. The demand that ATL captures is simply in a different league than any other hub. Couple that demand with the superior economics of the larger aircraft and you get a stellar performing hub.

DFW, in terms of revenue and demand is very strong, but I'd be hesitant to assume that is highly profitable at the moment, given AA's cost structure. That isn't a knock on the hub so much as a knock on AA's costs. Same goes for MIA.

IAH is always very strong, I'd assume one of the higher margin performers. EWR as well, but it would suffer the the seasonality of transatlantic travel, just as JFK does.

At the end of the day, I'd be surprised if any other hub even came close to ATL in terms of absolute profit. Its just in a different league in terms of scale. MSP is definitely up near the top in terms of margin, I suspect. Along with IAH.
 
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 3:39 pm

So based on the replies, here's a list of America's most profitable hubs:

UA at IAH
UA at ORD
UA at EWR
UA at SFO
DL at ATL
DL at MSP
DL at JFK
US at CLT
US at PHL
AA at MIA
AA at DFW

Quoting jetlanta (Reply 27):
DFW, in terms of revenue and demand is very strong, but I'd be hesitant to assume that is highly profitable at the moment, given AA's cost structure. That isn't a knock on the hub so much as a knock on AA's costs. Same goes for MIA.

I would think with the gas guzzling S80s operating a majority of flights into DFW, that has to hurt profits a wee bit. Perhaps when they get more 738s and Airbusses on property that will change.
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 5:03 pm

Quoting TOMMY767 (Reply 28):

US at PHL
US at CLT

I'm surprised that it has taken this long for someone to bring up US. At CLT, they pretty much don't have any competition, and have their largest hub there. It must be doing well. At PHL, they don't have too much competition, and Southwest is backing down, proving that they must be doing well here too.
 
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 5:37 pm

Quoting TOMMY767 (Reply 28):
I would think with the gas guzzling S80s operating a majority of flights into DFW, that has to hurt profits a wee bit.

Interesting point you raise here and one that I had not really contemplated in this thread - how does flight ops fuel consumption (and all the other non-hub-specific variables an airline runs into every day) impact profitability of the hub?

But I don't necessarily mean the obvious question in that question (if that makes any sense). I obviously get that the S80s are gas guzzlers and there are a bunch of them in and out of both Dallas and Chicago, but from an accounting standpoint, how do the bean counters reconcile a hub's income and revenue with the costs of the fleets that run in and out of them. It seems like a very difficult way to reconcile a profit/loss sheet for one specific place (a hub). What if a 738 based in Chicago runs three cycles into DFW on a two-day trip? What if an MD-82 from DFW does a whole day's worth of flying between Miami, LaGuardia and Chicago? Where does the cost go, and to whom is it attributed to?

I'm sure these questions have already been asked and answered in airline accounting departments, but I don't work there. I guess when I think of a hub's profitability, I think of it mainly in terms of:

- how much O&D traffic does it generate?
- how much connecting traffic does it generate?
- what percentage of all that is high yield?

Probably an oversimplistic view, but that seems to be the snapshot take on each hub that others in this thread have referenced as well- yours was the only post that I noticed that actually referenced a variable cost that is independent of labor/wages. Any insight on this would be very interesting - thanks!
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tommy767
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 6:08 pm

Quoting planespotting (Reply 30):
I'm sure these questions have already been asked and answered in airline accounting departments, but I don't work there. I guess when I think of a hub's profitability, I think of it mainly in terms of:

- how much O&D traffic does it generate?
- how much connecting traffic does it generate?
- what percentage of all that is high yield?

Yeah I'd love to see a list if it could be generated.

Quoting will777 (Reply 29):
I'm surprised that it has taken this long for someone to bring up US. At CLT, they pretty much don't have any competition, and have their largest hub there. It must be doing well. At PHL, they don't have too much competition, and Southwest is backing down, proving that they must be doing well here too.

They rule at both airports with supposedly CLT being a gold mine. I highly doubt PHX is nearly as profitable as PHL or CLT.
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 6:29 pm

I honestly think one of the few reasons AA has not declared bankruptcy like the rest of the legacy airlines is because of AA's MIA hub. It has continued to grow and grow every year and at a balance pace. If AA has done anything right this is probably one of their most successful business moves if not their most successful move in the last 30 years or so.
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 6:31 pm

Quoting flymia (Reply 32):
I honestly think one of the few reasons AA has not declared bankruptcy like the rest of the legacy airlines is because of AA's MIA hub. It has continued to grow and grow every year and at a balance pace. If AA has done anything right this is probably one of their most successful business moves if not their most successful move in the last 30 years or so.

They've done well in MIA but they could be even more aggressive. There are a few South American destinations in the 1990s which were served out of MIA but not at this time. Perhaps lack of A/C maybe?
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 7:09 pm

Quoting jetlanta (Reply 27):
MSP is highly profitable using every metric. Its also highly consistent. If there are stronger financial performers in the U.S. domestic arena, they are few and far between. The reason that MSP hasn't grown and JFK has is that MSP is already pretty much fully-developed. It is an appropriate size. NYC is a much stronger growth opportunity for Delta, which is why the effort has been put in there. NYC is about the future...and part of the reason that Delta can afford to invest there is because MSP is so solid.

MSP has very efficient Great Circle connections from SEA/PDX to secondary and tertiary cities in the Midwest and Northeast. Connecting pax to cities like DSM, IND, MKE, CMH, SDF, CLE, PIT, BUF, ROC, SYR, ALB, BDL, etc. that lack nonstops from SEA or PDX may not be numerous to each individual city, but in aggregate provide significant feed. Add in all the smaller destinations ex MSP and the feed is even greater.

More importantly, DL only faces significant competition from UA (over ORD). AA does not have the same level of service to these secondary cities ex ORD. Some get only Eagle and some (e.g ALB) are not served at all. Also, with tons of AS FFs in the SEA and PDX areas, the DL/AS partnership gives DL a leg up versus UA.
 
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 7:59 pm

Quoting flymia (Reply 32):
I honestly think one of the few reasons AA has not declared bankruptcy like the rest of the legacy airlines is because of AA's MIA hub. It has continued to grow and grow every year and at a balance pace. If AA has done anything right this is probably one of their most successful business moves if not their most successful move in the last 30 years or so.
DFW is as big a reason for that as MIA is.

But at the end of the day, I believe Jetlanta is right. If anything DFW and MIA are just keeping AA above water. Its still a hard match to combat their costs.

[Edited 2011-11-14 12:04:21]
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DeltaMD90
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 8:18 pm

Quoting LAXdude1023 (Reply 35):
DFW is as big a reason for that as MIA is.

But at the end of the day, I believe Jetlanta is right. If anything DFW and MIA are just keeping AA above water. Its still a hard match to combat their costs.

If DFW and MIA are keeping AA "above water" (which is arguable since they're bleeding money) what hubs are really killing them? I'm in the boat that believes AA will work on their costs and keep their network intact and will eventually operate it properly, but is there any chance of a hub shut down like DL did at DFW? LAX and JFK are tough markets, but rewarding so I can't see them going, but I heard (so take that for what it's worth) that AA is a weak #2 in ORD... kinda like DL was at DFW. Will STL finally bite the dust? My post may sound drastic but I think AA has to do a few things drastic to turn things around...
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airbazar
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 8:18 pm

Quoting TOMMY767 (Reply 10):
Exactly. For DL and MSP, it's not about international traffic at all. Their bread and butter is nearly all domestic.

That's hard to imagine considering that domestic operations of the legacy carriers are under tremendous pressure from LCCs which have been greatly responsible for the losses that domestic lagacy carriers have suffered over the last decade. Whenever the topic of "why US carriers can't make as much profits as European carriers" the answer is always: because US carriers have a much greater percentage of domestic operations which aren't as profitable.
 
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DeltaMD90
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 8:21 pm

Quoting airbazar (Reply 37):
That's hard to imagine considering that domestic operations of the legacy carriers are under tremendous pressure from LCCs which have been greatly responsible for the losses that domestic lagacy carriers have suffered over the last decade. Whenever the topic of "why US carriers can't make as much profits as European carriers" the answer is always: because US carriers have a much greater percentage of domestic operations which aren't as profitable.

Not true in ALL cases. I think that's what posters are saying makes MSP special. And US carriers made pretty good profits this quarter, better than many European carriers
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BoeingGuy
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 8:25 pm

Quoting TOMMY767 (Reply 28):
So based on the replies, here's a list of America's most profitable hubs:

UA at IAH
UA at ORD
UA at EWR
UA at SFO
DL at ATL
DL at MSP
DL at JFK
US at CLT
US at PHL
AA at MIA
AA at DFW

What about AS at SEA? Given their good financial performance and the fact that SEA is their biggest hub, I'd have to assume that's hight on the list.
 
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DeltaMD90
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 8:30 pm

Quoting BoeingGuy (Reply 39):
What about AS at SEA? Given their good financial performance and the fact that SEA is their biggest hub, I'd have to assume that's hight on the list.

Yes, and I heard AS @ ANC has very high profit margins, probably the most important figure to look at
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jetlanta
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 8:32 pm

Quoting TOMMY767 (Reply 28):
UA at IAH
UA at ORD
UA at EWR
UA at SFO
DL at ATL
DL at MSP
DL at JFK
US at CLT
US at PHL
AA at MIA
AA at DFW

I'd remove UA/ORD and DL/JFK. Certainly the latter. DL/DTW might deserve a place on the list nowadays, though. UA/IAH most certainly does.

Quoting airbazar (Reply 37):
That's hard to imagine considering that domestic operations of the legacy carriers are under tremendous pressure from LCCs which have been greatly responsible for the losses that domestic lagacy carriers have suffered over the last decade. Whenever the topic of "why US carriers can't make as much profits as European carriers" the answer is always: because US carriers have a much greater percentage of domestic operations which aren't as profitable.

Its a big country and general trends can't be applied everywhere. MSP serves a part of the country that is not terrifically impacted by LCC service, and flows that are even less impacted by low fares.
 
BCEaglesCO757
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 8:37 pm

I'd be shocked if IAH wasn't in the top 3.

We have some of if not, THE highest average fares in the country due to the oil companies here.

I'm sure that has been discussed on here before as well.
 
tommy767
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 8:45 pm

Quoting airbazar (Reply 37):
That's hard to imagine considering that domestic operations of the legacy carriers are under tremendous pressure from LCCs which have been greatly responsible for the losses that domestic lagacy carriers have suffered over the last decade. Whenever the topic of "why US carriers can't make as much profits as European carriers" the answer is always: because US carriers have a much greater percentage of domestic operations which aren't as profitable.

The only other LCC in the MSP market is Sun Country (hardly counts.) This was already mentioned though.

Also the LCC's do put pressure on the legacies BUT NOT in every single market. Look at DL and SLC in the Southwest effect. The same situation is occuring in PHL with US. They are doing extremely well competiting against WN. As a result, WN in cutting back in PHL.
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 9:11 pm

Quoting DeltaMD90 (Reply 40):
Quoting BoeingGuy (Reply 39):
What about AS at SEA? Given their good financial performance and the fact that SEA is their biggest hub, I'd have to assume that's hight on the list.

Yes, and I heard AS @ ANC has very high profit margins, probably the most important figure to look at

Yes, considering that AA loses money I'm a little perplexed at how AA at MIA and DFW can be on the speculative list of hubs that make the most money. That is unless of course ORD, JFK and LAX lose much more massive amounts of money, but MIA and DFW are highly profitable (a scenario that I highly doubt).
 
USAirALB
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 9:50 pm

Quoting TOMMY767 (Reply 31):
They rule at both airports with supposedly CLT being a gold mine

US does really well at CLT, probably because CLT is so cheap to operate from. As Doug Parker said it: "they don't turn the airport into a public works project."

Makes sense. Has anyone noticed that CLT is probably the largest airport in the entire world with only one terminal building? There are no satillitle concourses, trains, or shuttles. Just one main terminal.
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 10:10 pm

Quoting USAirALB (Reply 45):
Makes sense. Has anyone noticed that CLT is probably the largest airport in the entire world with only one terminal building? There are no satillitle concourses, trains, or shuttles. Just one main terminal

How big is BKK compared to CLT?
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LAXtoATL
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 10:30 pm

Quoting DeltaMD90 (Reply 36):
If DFW and MIA are keeping AA "above water" (which is arguable since they're bleeding money) what hubs are really killing them?

As I said previously, that leaves LAX,ORD,NYC. If a single market was responable for their poor performance they would have left it off their cornerstone strategy and focused on 4 markets, so it is logical that all three of those markets are losing a lot of money right now.

Quoting DeltaMD90 (Reply 36):
but I heard (so take that for what it's worth) that AA is a weak #2 in ORD... kinda like DL was at DFW

AA is a weak #2 compared to UA at ORD, but not as weak as DL was at DFW compared to AA.

Quoting DeltaMD90 (Reply 36):
Will STL finally bite the dust?

STL is already dust.

Quoting jetlanta (Reply 41):
I'd remove UA/ORD and DL/JFK.

I would too if the criteria is revenue per flight, both are likely huge profit centers for the respective airlines but I doubt they are the highest yielding operations.

Quoting jetlanta (Reply 41):
DL/DTW might deserve a place on the list nowadays

Another good observation. If not now, I expect it to make its way there soon when Delta continues expansion in Asia.
 
MAH4546
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 10:43 pm

AA's MIA hub is considered by many anlaysts to be the country's best performing hub, and UA's SFO and US' CLT hubs are also often brought up alongside MIA.

Quoting TOMMY767 (Reply 33):
There are a few South American destinations in the 1990s which were served out of MIA but not at this time.

There are three: Asuncion, Barranquilla and Porto Alegre. Only BAQ was flown non-stop. AA is prepared to resume ASU when the government ends travel agency tariffs, and is in talks with POA officials to resume service there this summer. POA was very short-lived, as there were, IIRC, problems with its then-short runway.

Quoting TOMMY767 (Reply 10):
I wonder if AA at MIA is more profitable than DFW. Thoughts?

DFW probably brings in more total profits by its shear size, but MIA probably is more profitable on a per-passenger basis. Due to Miami's geographic position, there is simply no other U.S. hub where such a large amount of short-haul flying can generate such high fares.
Quoting BoeingGuy (Reply 44):

Yes, considering that AA loses money I'm a little perplexed at how AA at MIA and DFW can be on the speculative list of hubs that make the most money. That is unless of course ORD, JFK and LAX lose much more massive amounts of money, but MIA and DFW are highly profitable (a scenario that I highly doubt).

While this fact will continue to be ignored by 99% of people on these boards, it bears repeating: AA does not have a network problem. It has a strong network that produces strong revenue results at all five hubs. But when AA's uncompetitive cost structure factors into the equation, the real trouble begins. If the AA network were ran at Delta's cost structure, it would be minting money.

Not only is the Miami hub profitable, AA is using it as a model to build-up its international network elsewhere:

http://www.thestreet.com/story/11137...r-we-are-building-more-miamis.html

[Edited 2011-11-14 14:45:35]
a.
 
LAXdude1023
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RE: What U.S. Airline Hub Makes The Most Money?

Mon Nov 14, 2011 10:57 pm

Quoting MAH4546 (Reply 48):
W probably brings in more total profits by its shear size, but MIA probably is more profitable on a per-passenger basis.

This would be my guess as well. Given MIA's geographic location, its a short flight to many international destinations that have high fares. Less fuel + less time spent in the air + high fares = high margin.

DFW is AA's jack of all trades hub. There some of everything AA does there and its the only hub AA has that is in that position.
It is what it is...