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STT757
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UA Dominance At EWR, Conveniences And Higher Fares

Tue May 22, 2012 12:43 am

Interesting article discussing the dominance of UA at EWR (71% of the market) and how it "drives" up the fares.

http://www.nj.com/business/index.ssf...niteds_dominance_at_newark_li.html
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BDL757
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RE: UA Dominance At EWR, Conveniences And Higher Fares

Tue May 22, 2012 12:54 am

Cool article! The EWR hub is probably one of the best assets in the UA/CO merger; once you get to Newark you can pretty much get everywhere!
 
mogandoCI
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RE: UA Dominance At EWR, Conveniences And Higher Fares

Tue May 22, 2012 12:59 am

which is even more impressive considering other hubs that can command these fare premiums usually have no meaningful competition (DFW... IAH ... CVG...) while NYC has 4 airlines hubbing

some can insist that JFK vs. EWR are 2 markets so therefore UA has a fortress hub but for all practical purposes, it's a single NYC market

[Edited 2012-05-21 18:19:04]
 
commavia
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RE: UA Dominance At EWR, Conveniences And Higher Fares

Tue May 22, 2012 1:05 am

Quoting STT757 (Thread starter):
Interesting article discussing the dominance of UA at EWR (71% of the market) and how it "drives" up the fares.

The natural duality of having a huge hub - just like in many other cities. Fares are higher, but having a hub typically brings tons of convenient nonstop flights to lots of places, which in turn attract high-value businesses and their traffic (which are typically less susceptible to the higher fares, anyway). Perhaps most importantly, hubs bring worldwide connectivity and access to the globalized market - something that is becoming increasingly critical in today's environment.

Quoting BDL757 (Reply 1):
Cool article! The EWR hub is probably one of the best assets in the UA/CO merger; once you get to Newark you can pretty much get everywhere!

No question. EWR is one of the most valuable things about that merger, and indeed any airline would be lucky to have it - it's a phenomenal hub from a strategic perspective. It's one of only two airports in the northeast that can actually serve as omni-directional, day-long, domestic-and-international hubs (the other is PHL, which is obviously not on the same level as EWR).

Quoting mogandoCI (Reply 2):
which is even more impressive considering other hubs that can command these fare premiums usually have no meaningful competition (DFW... IAH ... CVG...) while NYC has 4 airlines hubbing

some can insist that JFK vs. EWR are 2 markets so therefore UA has a fortress hub but for all practical purposes, it's a single NYC marker

While that is true, it's also a somewhat unfair comparison since the New York region dwarfs all others in local demand, and generates such a massive amount of domestic and international O&D - much of it premium and high-yielding - that there really is enough traffic to go around and support such a massive megahub at EWR plus a plethora of additional capacity from other U.S. and foreign carriers - including AA, Delta and JetBlue.
 
rampart
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RE: UA Dominance At EWR, Conveniences And Higher Fares

Tue May 22, 2012 1:12 am

Quoting mogandoCI (Reply 2):
some can insist that JFK vs. EWR are 2 markets so therefore UA has a fortress hub but for all practical purposes, it's a single NYC marker

I don't know many from NJ who drive to LGA or JFK unless they have to. (In other words, it has to be REALLY cheaper, or a destination not served from EWR). On the other hand, those from the core are of NYC proper would have all 3 major airports for a choice. Depends on what end of the metro area one lives. And it's unlike any other large metro area to have 3 very busy airports. MDW is busy but lacks choice that LGA has. Same with HOU and DAL. All the other airports in the LA area can't compare to LAX. Maybe San Francisco Bay area with SFO, SJC, and OAK.

Of course with that kind of dominance and higher fare trend at EWR, I'm more willing to trek out to LGA, or JFK. Even ABE becomes viable if I'm connecting somewhere anyhow and the fare is comparable.

-Rampart
 
mogandoCI
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RE: UA Dominance At EWR, Conveniences And Higher Fares

Tue May 22, 2012 1:18 am

Quoting commavia (Reply 3):

While that is true, it's also a somewhat unfair comparison since the New York region dwarfs all others in local demand, and generates such a massive amount of domestic and international O&D - much of it premium and high-yielding - that there really is enough traffic to go around and support such a massive megahub at EWR plus a plethora of additional capacity from other U.S. and foreign carriers - including AA, Delta and JetBlue.

In a near perfect competitive environment at equilibrium, pricing leverage goes away if product offering is indistinguishable. Discount out JetBlue as LCC, one should still expect DL and AA to command the same yields as UA in NYC. Another example would be NRT+HND - huge market, 2 large carrier hubs, but near identical pricing.

Add to the fact that AA is supposedly more O&D focused at nyc (i.e. higher yielding traffic) and DL is the largest at both JFK and LGA IIRC, that makes UA ability to command *and sustain* the fare premium even more impressive.
 
mogandoCI
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RE: UA Dominance At EWR, Conveniences And Higher Fares

Tue May 22, 2012 1:21 am

Quoting rampart (Reply 4):
I don't know many from NJ who drive to LGA or JFK unless they have to. (In other words, it has to be REALLY cheaper, or a destination not served from EWR). On the other hand, those from the core are of NYC proper would have all 3 major airports for a choice. Depends on what end of the metro area one lives.

True, but similarly people out in suffolk county long island won't exactly trek out to EWR either, so wouldn't that be a wash ?
 
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clickhappy
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RE: UA Dominance At EWR, Conveniences And Higher Fares

Tue May 22, 2012 1:22 am

News flash! Hub-to-Hub prices are always more expensive when there is no competition. Either book a one-stop of fly from a non hub airport.
 
rampart
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RE: UA Dominance At EWR, Conveniences And Higher Fares

Tue May 22, 2012 5:56 pm

Quoting mogandoCI (Reply 6):
True, but similarly people out in suffolk county long island won't exactly trek out to EWR either, so wouldn't that be a wash ?

Yes, it would.

Of course, Long Island has their own airport at ISP, a smaller facility, granted. LI has 1.3 million less people than all of NJ (7.5million vs. 8.8 million, still very large), and has, effectively, 3 airports: ISP, LGA, and JFK. Heading north, there's HPN and SWF for whatever population conglomerate one would use for the northern metro area. Unless one counts ABE and ACY, New Jersey has even more excuse to concentrate at EWR. See, now I'm arguing that maybe they are different markets.

-Rampart
 
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RE: UA Dominance At EWR, Conveniences And Higher Fares

Tue May 22, 2012 6:11 pm

Quoting rampart (Reply 8):
Yes, it would.

Of course, Long Island has their own airport at ISP, a smaller facility, granted. LI has 1.3 million less people than all of NJ (7.5million vs. 8.8 million, still very large), and has, effectively, 3 airports: ISP, LGA, and JFK. Heading north, there's HPN and SWF for whatever population conglomerate one would use for the northern metro area. Unless one counts ABE and ACY, New Jersey has even more excuse to concentrate at EWR. See, now I'm arguing that maybe they are different markets.

-Rampart

ABE/ACY/ISP/SWF are very small potato, but the southern half of Jersey can easily bleed to PHL too.
 
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RE: UA Dominance At EWR, Conveniences And Higher Fares

Tue May 22, 2012 6:32 pm

Quoting mogandoCI (Reply 2):
some can insist that JFK vs. EWR are 2 markets so therefore UA has a fortress hub but for all practical purposes, it's a single NYC market

JFK/LGA and EWR are two different markets. Walk-up fares to EWR from most markets are significantly higher than those to JFK/LGA and the same trend is true at many other fare levels. No doubt it's because JFK/LGA have more competition, but if it was truly a single NYC market, the fares would be priced the same. It's similar to LAX and SNA -- there's a very large number of travelers willing to travel from either airport (dependent on fare & times), but there's also a very large market that will not travel to the other market (too far away from their business, etc.).
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RE: UA Dominance At EWR, Conveniences And Higher Fares

Tue May 22, 2012 6:36 pm

It's been this way for a while. CO was expensive throughout the last decade to fly out of EWR, and it seems since the merger everything has been even more pricey.
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RE: UA Dominance At EWR, Conveniences And Higher Fares

Tue May 22, 2012 8:10 pm

Quoting mogandoCI (Reply 9):
ABE/ACY/ISP/SWF are very small potato, but the southern half of Jersey can easily bleed to PHL too.

Good point, I should have remembered that. I liken ABE, ACY, ISP and SWF to BUR and LGB in Los Angeles. ABE and SWF resemble GYY and RFD for Chicago.
 
termbewr
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RE: UA Dominance At EWR, Conveniences And Higher Fares

Tue May 22, 2012 10:56 pm

EWR is absolutely more expensive in certain markets. For example, business markets such as CMH, PIT or IAH where they lack competition, the UA pricing is insane. However, the leisure routes where the premium demand doesn't exist or they have a competitor, you are fine. Flights to Europe tend to be competitive also. I suspect the guy quoted in the article tried to book a flight during a peak travel period.

Quite frankly, I don't begrudge UA for charging high fares from EWR. Airlines exist to turn a profit so why not get it while you can? As a consumer, I have the choice of flying them from EWR or choosing another carrier from LGA or JFK.
 
Flytravel
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RE: UA Dominance At EWR, Conveniences And Higher Fares

Tue May 22, 2012 11:41 pm

Quoting rampart (Reply 12):
I liken ABE, ACY, ISP and SWF to BUR and LGB in Los Angeles.

ACY is more of an alternative for PHL than it is for EWR. ABE is about 20 miles maybe too far for acting like an alternative for either EWR or PHL, and acts more like a regional airport with typical high fares, and not enough in a way of low fare carrier service. If anything, UA at EWR enjoys pax traffic coming in from the ABE region than the ABE region offering much to NJ pax.

Another benefit for UA at EWR is that the airport to the south of it is PHL where US, it's alliance partner, has the same type of dominance on routes without competition.
 
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RE: UA Dominance At EWR, Conveniences And Higher Fares

Wed May 23, 2012 12:25 am

Quoting commavia (Reply 3):
While that is true, it's also a somewhat unfair comparison since the New York region dwarfs all others in local demand, and generates such a massive amount of domestic and international O&D

I was under the impression that LA was the country's largest O&D market, moreso than NYC due to it's isolated location. (whereas a lot of passengers from NYC to many destinations in the NE go by train, car, or bus). If I am mistaken, please correct me.


'902
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commavia
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RE: UA Dominance At EWR, Conveniences And Higher Fares

Wed May 23, 2012 1:39 am

Quoting TWA902fly (Reply 15):
I was under the impression that LA was the country's largest O&D market

LAX is the nation's largest O&D airport. New York (metro) is the nation's largest O&D market.
 
rampart
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RE: UA Dominance At EWR, Conveniences And Higher Fares

Wed May 23, 2012 2:06 am

Quoting termbewr (Reply 13):
As a consumer, I have the choice of flying them from EWR or choosing another carrier from LGA or JFK.

Or, as I do, I find myself flying other airlines from EWR, via hub connections elsewhere (recently, WN, AA, and DL). I'm not so much wedded to the OnePass as I used to be. If I have to connect somewhere anyhow, I have a wide spectrum. I frequently fly to Colorado; UA and CO used to compete, but no longer, so other airlines come into my choice.

-Rampart
 
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RE: UA Dominance At EWR, Conveniences And Higher Fares

Wed May 23, 2012 5:14 am

Quoting commavia (Reply 16):
LAX is the nation's largest O&D airport. New York (metro) is the nation's largest O&D market.

That makes sense - thanks commavia.

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