People (myself included) make a big deal out of O&D traffic because that's where airlines make the vast majority of their profits. Connecting traffic is not terribly lucrative for the airlines, given that a connecting itinerary adds significant overhead -- an additional takeoff/landing (with attendant facilities costs, fuel, labor, aircraft use/depreciation, landing fees), another transaction with a gate agent, employees to transfer baggage, etc. And, moreover, for most people, a non-stop flight is worth a slight premium for the time saved. To a large degree, connecting traffic merely helps to fill planes (and offset fixed operating costs) while the O&D traffic makes the profits.
That isn't to say that hubs that are mostly (>70%) connecting traffic cannot be successful; many of these provide high-fare connecting service to smaller markets which can be profitable for the airline operating the hub. MEM
, and SLC
are good examples of that; for these hubs, connecting passengers have often had little choice and have had to pay high fares to travel.
To be honest, though, I would not give "PIT
..." as a list of good hubs in smallish cities. To start with Pittsburgh -- the Pittsburgh metro area has been shrinking for decades. Moreover, the proportion of higher-fare connecting traffic at PIT
continues to fall with the entry of low-cost carriers into the Northeast, as well as the use of regional jets to poach traffic in markets historically dominated by USAir(ways). CMH
was a failure as a hub because the O&D market was too small. And it's dubious as to whether an operation with about 10 daily mainline and 30-40 daily regional departures is truly a "hub" (marketing speak aside) more so than a focus city. MSP
is larger than STL
and is unique in its location; it serves a broad swath of the upper Midwest unserved by other airlines. The jury is still out on what will happen to MKE
; the YX
hub there was never particularly large and the airline serves a very specific niche which has shrunk in the last several years. MEM
is a very weak hub with a specific purpose: it provides connections from the South Central (LA, MS
) region to much of the rest of the country; Northwest faces limited competition in many of these markets. Many large cities on the coasts (BOS
), USA - Washington">SEA
) have only one daily flight to MEM
's DC-9 fleet makes it easier to offer smaller numbers of seats in thin markets. MCI
, despite its excellent location, has been the host of several failed hubs over the years -- for Braniff, Eastern, USAir (focus city), and Vanguard. The large WN
presence at MCI
didn't help the last two, either. WN
has made a medium-sized operation work at MCI
by focusing primarily on O&D routes with connecting traffic to help fill the planes.
While I believe a CLE
-sized and scaled operation would work at STL
, the fact is that AA
will together offer a comparable number of flights (with CVG
being somewhat larger). And that doesn't leave a lot of room for a startup in a relatively weak hub market. AirTran and Frontier started operations at large hubs after the failure (EA at ATL
) or withdrawal (CO at DEN
) of a major carrier at those hubs; one could argue that TWA's draw-down at JFK
helped jetBlue, too.
PeoplExpress showed that a discount carrier at an inconvenient airport (EWR
at the time) with poor facilities could be wildly successful in the NYC market; it was clear that PE
's eventual failure was largely due to an inability to properly manage growth. With a proven set of managers, an NYC-based New Air/jetBlue was an easy sell to venture capitalists. Given the track record with TWA, which had relatively low operating costs (though higher than WN
's), at STL
, and given AA
's decision to maintain a small hub/focus city at STL
, I think a new TWA might be a tough sell. Moreover, given the very senior nature of the laid-off TWA staff (topped-out on the wage scales) in the STL
area, it might well be difficult to get them to accept starting wages (comparable to WN
) at a new discount carrier. And while the acquisition/lease costs of used MD
-80's might be low, higher fuel burn rates and higher maintenance costs would soon offset those advantages. Check out the Motley Fool article entitled "JetBlue's Challenges" linked from another thread about how maintenance will eventually drive up their ASM costs.
has little interest in facilitating the startup of a new discounter which would compete with its ORD
hubs. And I doubt AA
would sell any MD
-80's to another airline uness they were in dire straits. I do imagine, though, that AA
would be more than happy to sell you a bunch of F100's.