AFa340-300E
Topic Author
Posts: 2115
Joined: Tue May 18, 1999 3:49 am

Why Did The Hubs Open?

Tue Oct 17, 2000 4:20 am

Hello,

American Airlines
DFW: 1981
ORD: 1982
SJU: 1986
MIA: 1989


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Deutsche Lufthansa AG
I can't find any information about the openning of the Luftahsan's Frankfurt Hub anywhere.
Could any one help me for this one?


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KLM Royal Dutch Airlines
What about KLM at AMS? I think they were the very first airline to aplly the concept on this side of the Atlantic.


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Air France
Air France applied the successful concept as it recovered, first on its natural basis: Paris. Then the airline expanded it to Lyon, strengthening its European coverage.
CDG: 1996
LYS: ~1998


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What about UAL, CO, US, AZ, IB, ... All and those I forgot about?

Thank you,

Best regards,
Alain Mengus
 
desertjets
Posts: 7607
Joined: Fri Feb 18, 2000 3:12 pm

RE: Why Did The Hubs Open?

Tue Oct 17, 2000 4:27 am

At least in the US, and to some extant in the rest of the world: Deregulation. If you looked at Timz posted OAG timetables from LGA or ORD in the 1956 most airline flights were of the milkrun variety. Flying from New York to Dallas, unless it was a rare non-stop, pretty much meant you stopped everywhere in between. When was the last time you stopped at Washington, Charlestown, WV, Nashville, TN, and Little Rock, AR, on your way to Dallas?

Under the regulated scheme routes were given to airlines, as well as some price supports, mail contracts, etc... Smaller cities would see jet service but with only one or two airlines. After dereg that all changed and to remain competitive on any given route hubs needed to be established to optimize an airlines resources.

I do know that United finally designated LAX a hub in 1999, though it had long been a major center of UA operations from the very beginning.
Stop drop and roll will not save you in hell. --- seen on a church marque in rural Virginia
 
ContinentalEWR
Posts: 3619
Joined: Wed May 24, 2000 2:50 am

RE: Why Did The Hubs Open?

Tue Oct 17, 2000 4:30 am

In the US, it was deregulation of the airline industry and the dissolution of the Civil Aeronautics Board in
1978 that led to the development of the hub and
spoke system. Airlines created fortress hubs at the
cities it felt could best be served. Many airlines are
hubbed at cities where they were originally based.

American Airlines moved its HQ from New York to
Dallas in 1980 and began to develop DFW into a
major hub. The Miami hub emerged out of AA's
acquisition of Eastern Air Lines' Latin American
operations.

Continental was HQ'd in California at Los Angeles
originally and after acquiring Texas International
it moved to Houston. The Denver hub was closed
in 1993 and the CLE hub opened in 1989 as UA
moved out of it. The Newark hub was acquired
through Texas Air Corp's purchase of PeoplExpress
Airlines in 1986.

Delta is based in Atlanta. The CVG hub was begun
in 1980-81. Salt Lake City was through the
acquisition of Western Airlines.

US Airways is the product of merger after merger
that brought together Allegheny Airlines which
was based in PIT and Piedmont (CLT), PSA, whose
West Coast operations were cannibalized shortly
after it was acquired with assets transferred to
the East Coast.

Northwest, even before deregulation, was a
strong player in the Northern midwest, hence
its DTW and MSP hubs. Memphis was developed
in the early 1990's to build a larger Southern
presence and East Coast through traffic. MEM
is also a huge cargo transit point and the HQ
of Federal Express.

TWA was originally based in NY. The St. Louis
hub was developed in the 1970's.

 
AFa340-300E
Topic Author
Posts: 2115
Joined: Tue May 18, 1999 3:49 am

Hubs And Deregulation

Tue Oct 17, 2000 4:36 am

Hello,

I mostly agree with the hubs as a consequence of the deregulation (alongside many other curren concept, like the shuttle, the revenue management, the frequent flyer programs, ...).

However, what is interesting to note is that not all airlines opened their hubs at the same time, keeping different strategies at a time in Europe.

Indeed, in the US building a hub was necessary to simply remain among the 'survivors' in the early 1980s!

Correct me if I'm wrong but this was already common sentence in the Old South: "Wherever you go, even or hell, you'll have to connect through Atlanta"   (I'm not sure of the sentence word by word however).

Thank you for the answers.

Best regards,
Alain Mengus
 
LatinPlane
Posts: 2491
Joined: Mon Dec 27, 1999 11:05 am

RE: American's Hubs

Tue Oct 17, 2000 4:38 am

The hub/spoke concept developed in the late 70s and early 80s when the U.S. airline industry was de-regulated by the government. Before this, airlines were awarded the routes they could fly.

American's ORD hub is of course the natural choice as it is the base operation for the company. DFW became their second hub after the bankrupcy of Braniff International in the early 80s. MIA was established after American bought bankrupt Eastern Airlines routes to Latin America. SJU was established as a hub to feed American tourist going to and from the carribbean as well as to have vital communication flights to the smaller islands with few passenger volume.


Best regards,
Apollo Diaz
Pan Am - The World's Most Experienced Airline.
 
Guest

RE: Why Did The Hubs Open?

Tue Oct 17, 2000 4:39 am

Texas International acquired Continental, thus the move to Houston.
 
desertjets
Posts: 7607
Joined: Fri Feb 18, 2000 3:12 pm

RE: Why Did The Hubs Open?

Tue Oct 17, 2000 4:41 am

Alain,

i never heard that, but it is pretty damn funny.


As for Europe, the airline industry was much slower to deregulate. As state interest in flag carriers waned. I think the major reason KLM generally had a hub system at Schipol is that the Netherlands is tiny and there would be little domestic point to point. Plus I would imagine 5th freedom rights on flights outside of the Netherlands would be difficult to get as well. But take a look at France, the UK, or Germany... all much larger countries with many large population centers. Though now LH, AF, and BA have centered their ops around their countries main gateways and the point to point services have been relegated to regional feed operations.

hope that helps.
Stop drop and roll will not save you in hell. --- seen on a church marque in rural Virginia
 
AFa340-300E
Topic Author
Posts: 2115
Joined: Tue May 18, 1999 3:49 am

RE: Why Did The Hubs Open?

Tue Oct 17, 2000 4:50 am

Hello DesertJets,

Yes, I share your guess about why KLM was Europe's first airline to build a hub.

What about Swissair?

Best regards,
Alain Mengus

 
Republic
Posts: 541
Joined: Thu Dec 27, 2012 12:39 am

RE: Why Did The Hubs Open?

Tue Oct 17, 2000 10:31 am

In the case of Northwest and Continental, hubs at MEM, DEN, and EWR were the result of acquisitions.

Northwest:

Northwest had strong bases at MSP and DTW. Republic Airlines(I flew Republic in 1985 on a one way HOU-MEM-DCA ticket in 1985 when I went away to college, hence my username) was the result of the merger between North Central Airlines (strong operations at MSP and DTW) and Southern Airways (significant operations at Memphis). Northwest eliminated a direct competitor at MSP and DTW, making them the dominant carrier here, by acquiring Republic in 1986. MEM was gained in the acquisition, allowing NW to expand into the South. Thus NW had fortresses at MSP, DTW, and MEM.


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Republic MD-82


Continental:

Texas International (was called Trans-Texas Airways until named changed because of a weekly flight to Tampico and Veracruz), with a strong base in Houston, was on the verge of bankruptcy in 1971. Enter Harvard MBA Frank Lorenzo. By becoming a low fare carrier (to compete with a new Texas start up airline with a fleet of 3 B737s called Southwest), TI turned its fortunes around. Flush with backing from Wall Street, TI began acquiring stock bit by bit in the US's ninth largest carrier, LA based Continental. With the advent of deregulation, CO was having a tough go. Close to bankruptcy after substantial losses in 1980, and with a very low stock price, CO was acquired by the holding company of TI, Texas Air. Because Continental was much more well known than TI, TI took on the name of Continental, remaining at its base at IAH and moving over time what was left of the former CO to Houston. Hence IAH as one of CO's hubs. PEOPLExpress, based at EWR, acquired DEN based Frontier in 1985. This acquisition undid PE. By mid 1986, PE was sold to Texas Air. Since Continental was the more well known name, PEOPLExpress was now Continental. Now CO had strong operations at IAH, EWR, and DEN.

In the case of NW and CO, their hubs are the result of having strong to dominant operations at these airports, without significant direct competition. These hubs were partially the result of acquring the bases of other carriers and merging them into their fold.


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TI at IAH


Republic
 
User avatar
BNE
Posts: 2923
Joined: Fri Mar 31, 2000 9:37 pm

RE: Why Did The Hubs Open?

Tue Oct 17, 2000 7:37 pm

TWA acquired a large presense in St Louis after it took over it major competitor in Ozark Airlines in 1986. I read somewhere the routes to and from St Louis was where TWA was able to make a good profit.
Why fly non stop when you can connect

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