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Max Q
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US Airlines Today, Too Many Hubs?

Mon Dec 09, 2013 10:05 pm

With all of the mergers the big three now have a large amount of hubs, for UA alone I count what, seven.


While this can be a great strength if you own the market it's also a huge commitment, you need a massive fleet to adequately serve so many cities and dominate the markets.



In UA's case I simply don't see they have the mainline fleet to do this, currently, or on order. If you look at foreign carriers in some ways its easier for them only having one hub.



Look at Emirates, with just the one hub in Dubai they are committed to hundreds of widebodies, I know they're a different business model but for UA to serve their hubs comparably they would also need hundreds of widebodies.



Is UA too thinly spread ?
 
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DeltaMD90
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RE: US Airlines Today, Too Many Hubs?

Mon Dec 09, 2013 10:08 pm

They seem to be doing fine, more or less. Maybe UA could get a bit more mainline, but I don't really see a dilemma here. US airlines =/= foreign airlines and most US airlines are doing very well. I don't think they'd be doing well with just one hub
 
point2point
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RE: US Airlines Today, Too Many Hubs?

Mon Dec 09, 2013 10:20 pm

Quoting Max Q (Thread starter):
Look at Emirates, with just the one hub in Dubai they are committed to hundreds of widebodies, I know they're a different business model but for UA to serve their hubs comparably they would also need hundreds of widebodies.

Is UA too thinly spread ?

Hmmm.... One can say that Britain, France, Netherlands all have one hub, and maybe Germany 2-3, and maybe some other European countries having hubs at their capitals as well. But in the area of Europe... if compared to the U.S., has how many hubs?

Also, with the ME3 airlines, good grief, there's DOH, AUA and DXB all within spitting distance of each other..... is that maybe too many hubs in one area... with so few (but maybe rather wealthy) people in the area? Might that be clusterf*** compared to UA's spread out hubs across the U.S.?

 

[Edited 2013-12-09 14:23:05]
 
Cubsrule
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RE: US Airlines Today, Too Many Hubs?

Mon Dec 09, 2013 10:32 pm

Quoting Max Q (Thread starter):
While this can be a great strength if you own the market it's also a huge commitment, you need a massive fleet to adequately serve so many cities and dominate the markets.

Okay, let's imagine a world in which AA hubs only at DFW, UA hubs only at ORD and DL hubs only at ATL. The BOS-SEA passenger isn't going to have very many sensible choices, the BUF-MIA passenger won't do much better and the SNA-GEG passenger will have no sensible choices. The United States is a huge country--roughly the population of the United Kingdom, France, Italy, Germany and Poland put together much more land area.
 
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enilria
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RE: US Airlines Today, Too Many Hubs?

Mon Dec 09, 2013 10:34 pm

Goodbye CLE, PHX, and the rest of CVG.
 
WesternA318
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RE: US Airlines Today, Too Many Hubs?

Mon Dec 09, 2013 10:49 pm

Quoting Max Q (Thread starter):
Look at Emirates, with just the one hub in Dubai they are committed to hundreds of widebodies, I know they're a different business model but for UA to serve their hubs comparably they would also need hundreds of widebodies.

EK doesnt have the domestic network the US Airlines have. UA has their hubs spread out throughout the US to cover those specific areas. EK doesnt. EK has DXB and thats it.
 
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cageyjames
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RE: US Airlines Today, Too Many Hubs?

Mon Dec 09, 2013 10:54 pm

How many hubs are there in the EU vs hubs in the USA? Comparable populations and size (relatively).

It's fine...
 
a380787
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RE: US Airlines Today, Too Many Hubs?

Mon Dec 09, 2013 11:13 pm

LH might be the one with too many hubs and VERY concentrated - FRA, MUC, ZRH, VIE (add BRU and GVA if you want) all within high speed rail distance of each other. The only saving grace is that all have high O&D, so it's not that any of them exist for geographic convenience of connections (i.e. the purpose of MEM in the NW days)
 
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GSPFlyer
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RE: US Airlines Today, Too Many Hubs?

Mon Dec 09, 2013 11:16 pm

The U.S. is in a very different geographic situation than most countries. Most all corporate travel to different cities (other than within the Northeast-New York, Philadelphia, maybe Boston and D.C.) is done by air. In Europe, most domestic travel, as well as some international travel can be done efficiently by train. Because of this situation in the U.S., our airlines have an extensive domestic network to make sure you can get between almost any two domestic cities within one day.

For example, a trip from Greenville, SC to Los Angeles would take 33 hours (not including rest time) by car, 3 days by Amtrak, and about 7 hours on DL via. ATL.

Quoting Max Q (Thread starter):
Look at Emirates, with just the one hub in Dubai they are committed to hundreds of widebodies, I know they're a different business model but for UA to serve their hubs comparably they would also need hundreds of widebodies.

Again, the UAE is much smaller than most U.S. states. At ~ 32,278 square miles, it has less land area than the state of Indiana, and is actually served by 2 airlines, EK in DXB and EY in AUH.

Having multiple hubs allows airlines to choose which destination to serve from which hub, and be more competitive. I can't think of any hubs that are "one size fits all" in the U.S. Take DL for example. Domestic traffic is served through ATL, SLC, DTW and MSP. Each one focuses on a certain area; ATL-Southeast, SLC-west, DTW/MSP-Midwest. They have built more of a European network through JFK than they ever could have through any of their other hubs, because of O&D traffic at JFK.
 
FlyPNS1
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RE: US Airlines Today, Too Many Hubs?

Mon Dec 09, 2013 11:32 pm

I think UA is too thinly spread and can't maintain all the hubs and do so with a cost competitive domestic fleet.

One of the reasons DL has been successful has been DL's ability to shut down MEM/CVG and shift connecting passengers onto larger aircraft through fewer hubs. This allows DL to use more mainline aircraft domestically which provide a lower CASM.

UA is spread thin and ends up competing against itself with high CASM RJ's. Want to fly BDL-BNA on UA? You can flying BDL-EWR-BNA, BDL-CLE-BNA or BDL-IAD-BNA....and almost every flight will be a high CASM small RJ. It's not like BDL and BNA are small markets, both are metropolitan areas serving 1.5-2.5 million people (depending on how you measure). But UA is so fragmented, that all it can do is fly RJ's to these markets. This strategy is why UA will continue to underperform DL.
 
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OzarkD9S
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 12:12 am

My nostalgic side says not enough hubs, nor airlines for that matter. It was kind of fun in the 80's when any airport with two runways and half a million people seemed to have some sort of hub.

Without getting in the tiresome hub/focus city argument, WN has developed hub-like operations at many airports, in some instances replacing former hubs to a decent degree: STL/BWI/BNA spring to mind, and some others to a lesser extent.

And NK is developing quite the interesting route map. Looking at the map alone without knowing the actual scheduling DFW, ORD and LAS look like hubs, even if they aren't scheduled as such.

F9 is now a wild card, and who knows what Indigo's plans are. Their map will probably look very different in 2-5 years.

Economically speaking we probably have enough large hubs in the US to service traveler's needs.

In this industry there is always the next cycle...and who knows what may develop.
 
Max Q
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 12:23 am

Quoting FlyPNS1 (Reply 9):


I think UA is too thinly spread and can't maintain all the hubs and do so with a cost competitive domestic fleet.

One of the reasons DL has been successful has been DL's ability to shut down MEM/CVG and shift connecting passengers onto larger aircraft through fewer hubs. This allows DL to use more mainline aircraft domestically which provide a lower CASM.

UA is spread thin and ends up competing against itself with high CASM RJ's. Want to fly BDL-BNA on UA? You can flying BDL-EWR-BNA, BDL-CLE-BNA or BDL-IAD-BNA....and almost every flight will be a high CASM small RJ. It's not like BDL and BNA are small markets, both are metropolitan areas serving 1.5-2.5 million people (depending on how you measure). But UA is so fragmented, that all it can do is fly RJ's to these markets. This strategy is why UA will continue to underperform DL.

I agree, and i think you hit the nail on the head. This superb route system and hub structure is only as good as it's
fleet will support and RJ's just don't cut it



UA's potential strength may be it's biggest weakness unless management wakes up.
 
klkla
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 3:55 am

Quoting enilria (Reply 4):
Goodbye CLE, PHX, and the rest of CVG.

I agree that CLE and CVG are redundant for United and Delta because ORD and DTW can cover the same connecting markets.

PHX I'm not so sure about. Sure you could move some connecting traffic to DFW but you would lose a lot of customers that are traveling within the Southwestern U.S. because Dallas is too far east and there's no way AA could grow LAX enough to pick up the slack. PHX may get 'right-sized' but it would be stupid to drop it all together.
 
tyler81190
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 5:37 am

Quoting FlyPNS1 (Reply 9):
I think UA is too thinly spread and can't maintain all the hubs and do so with a cost competitive domestic fleet.

One of the reasons DL has been successful has been DL's ability to shut down MEM/CVG and shift connecting passengers onto larger aircraft through fewer hubs. This allows DL to use more mainline aircraft domestically which provide a lower CASM.

UA is spread thin and ends up competing against itself with high CASM RJ's. Want to fly BDL-BNA on UA? You can flying BDL-EWR-BNA, BDL-CLE-BNA or BDL-IAD-BNA....and almost every flight will be a high CASM small RJ. It's not like BDL and BNA are small markets, both are metropolitan areas serving 1.5-2.5 million people (depending on how you measure). But UA is so fragmented, that all it can do is fly RJ's to these markets. This strategy is why UA will continue to underperform DL.

BINGO!!!

though, UA has put out internal memos stating that the 50 seat era will be coming to an end (wondering what EV thinks about that?) Though I have heard many different timelines, from 2015-2017 it seems UA will follow DL's footsteps in the merger in dumping the 50 seat planes. I know they have many ERJ-175s on order, but IMHO do any of you really see that helping with the hub issues?


What hub/hubs could UA do without? I know many people would immediately say CLE, and I would tend to agree. I do think though, that instead of killing a hub, they should "relocate" one.

Thoughts?

TJ
 
tortugamon
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 6:12 am

I am sure most people don't like to have to travel through JFK or LAX to fly to Asia or Europe. Many people very close o a large airport where they can fly to nearly any continent and if there were less hubs this would not be possible.

tortugamon
 
bjorn14
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 8:48 am

I think the new AA might have to look at some history and see which path to follow DL or UA. I really don't think they can support all those hubs either.
 
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christao17
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 11:54 am

Quoting tyler81190 (Reply 13):
What hub/hubs could UA do without? I know many people would immediately say CLE, and I would tend to agree.

CLE seems the obvious answer. I went to Great Circle Mapper and just randomly played with some city pairs using MSP, GRR, BUF, and BOS in the north and SAT, ATL, and MIA in the south, connecting through ORD, CLE, IAD, and EWR.

In all cases, routes through ORD or IAD were either acceptable alternatives to CLE or shorter alternatives. Considering that ORD and IAD are better established and have larger O&D markets, too, it seems like CLE probably doesn't provide as much value.

Of course, that's just an armchair CEO's view. Don't have UA's numbers to back me up.
 
jayunited
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 4:11 pm

Quoting Max Q (Thread starter):
With all of the mergers the big three now have a large amount of hubs, for UA alone I count what, seven.
While this can be a great strength if you own the market it's also a huge commitment, you need a massive fleet to adequately serve so many cities and dominate the markets.
In UA's case I simply don't see they have the mainline fleet to do this, currently, or on order. If you look at foreign carriers in some ways its easier for them only having one hub.
Look at Emirates, with just the one hub in Dubai they are committed to hundreds of widebodies, I know they're a different business model but for UA to serve their hubs comparably they would also need hundreds of widebodies.
Is UA too thinly spread ?

First and foremost if you are going to compare US Airlines to other airlines around the world you need to compare them to other countries that are at least half the size of the US. We have states that are bigger than some countries so of course some foreign carriers only have one or perhaps two hubs. But that will not work here in the US the country is simple to big. Lets go back in time before the onslaught of mergers began. AA's network covered DFW, MIA, JFK, ORD, LAX. There are to big holes in AA's network the mountain region and the Pacific Northwest. Take CO for example they had EWR, IAH, and CLE all of these airports are east of Mississippi River west of the river CO had a presence but nothing compared to UA. Now look at UA we had IAD, ORD, DEN, LAX, SFO it may look balanced but its not we had huge holes in our network namely New York area, and the South including Florida. I did all of this to paint a picture that all of these airlines by themselves had including both NW and DL had major holes in their networks due to the size of the U.S. and these mergers are helping to fill in those holes and balance out the coverage.

Now that is not to say that you don't have a point look at what DL has done as MEM they have de-hubbed that airport. It is widely believe that UA once their agreement with CLE runs out that UA will at some point de-hub CLE because it simply to close to ORD and IAD. And I suspect that once the AA/US merger is done at some point in time the new AA will de-hub one of US's existing hubs. But once all these mergers are complete I think we will see balance and although there will still be some holes in each airlines network they won't be huge as they were prior to these mergers taking place.
 
Rdh3e
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 4:21 pm

Quoting FlyPNS1 (Reply 9):
One of the reasons DL has been successful has been DL's ability to shut down MEM/CVG and shift connecting passengers onto larger aircraft through fewer hubs. This allows DL to use more mainline aircraft domestically which provide a lower CASM.

So Delta has the successful strategy of having 8 hubs:

ATL
DTW
LAX
LGA
JFK
MSP
SEA (up and coming)
SLC

And yet, UA is a failure because of it's 8 hubs...
 
ckfred
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 4:24 pm

Quoting enilria (Reply 4):

Goodbye CLE, PHX, and the rest of CVG.

For a hub to be profitable, it has to have plenty of O&D traffic. In other words, there has to be a large metro area with plenty of businesses that generate travel. Neither CLE nor CVG are growing metro areas with expanding business bases. Other than P&G and some smaller companies like Convergys, Cinci doesn't have the business base that Chicago, the D/FW Metroplex, or Los Angeles have.

Phoenix is a different story. It's business base is growing, as well as the population of the metro area. My wife to used to travel regularly to a company office in Scottsdale, and several friends of mine work for companies with offices in metro Phoenix.

That's not so say that some flying won't shift to LAX or DFW. But, PHX isn't about to become a spoke.
 
tommy1808
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 4:31 pm

Quoting Max Q (Thread starter):
Look at Emirates, with just the one hub in Dubai they are committed to hundreds of widebodies, I know they're a different business model but for UA to serve their hubs comparably they would also need hundreds of widebodies.

EK profit is eroding. Different from the legacies they don´t have much to make leaner, more efficient and cheaper. They fleet is new and fuel efficient and everything, but they add more and more routings like DXB-LAX to their network. EKs business model is basically gambling, which is only fun as long as you win.

I guess the US Airlines can not reduce the number of hubs significantly without just giving up the potential passengers in that area. Try combinations of only 4 hubs in the continental US and imagine how that will increase the distance traveled and the costs for the airlines along with it.

best regards
Thomas
 
airxliban
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 4:34 pm

Quoting RDH3E (Reply 18):

So Delta has the successful strategy of having 8 hubs:

ATL
DTW
LAX
LGA
JFK
MSP
SEA (up and coming)
SLC

And yet, UA is a failure because of it's 8 hubs...

Does anyone have the data handy as to what % of DL's total capacity is out of ATL compared to UA's total capacity out of ORD vs AA out of DFW?


Edit: Wikipedia to the rescue - below are the daily departures

United (September 2013 - includes UA Express)

Chicago-O'Hare, Illinois 760 23%
Houston, Texas 651 20%
New York/Newark, New Jersey 431 13%
Denver, Colorado 412 13%
San Francisco, California 325 10%
Washington-Dulles, Virginia 294 9%
Cleveland, Ohio 199 6%
Los Angeles, California 194 6%


Delta (Dec 2013)

Atlanta (ATL) 931 37%
Detroit (DTW) 455 18%
Minneapolis-St. Paul (MSP) 397 16%
New York City (LGA) 265 11%
Salt Lake City (SLC) 233 9%
New York City (JFK) 136 5%
Cincinnati/N. Kentucky (CVG) 101 4%

American (Nov 2013)

Dallas/Fort Worth, Texas 641 42%
Chicago-O'Hare, Illinois 312 20%
Miami, Florida 279 18%
New York-LaGuardia, New York 108 7%
Los Angeles, California 101 7%
New York-JFK, New York 86 6%

This is just departures, not capacity, so should be treated as such but nonetheless I was surprised that is AA is the most concentrated in its super hub. I thought DL would have more departures out of ATL than AA out of DFW.

[Edited 2013-12-10 08:40:06]
 
SkyTeamTriStar
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 6:19 pm

More options are better to consumers than having less options…
 
a380787
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 6:30 pm

Quoting Airxliban (Reply 21):
United (September 2013 - includes UA Express)

Chicago-O'Hare, Illinois 760 23%
Quoting Airxliban (Reply 21):
Delta (Dec 2013)

Atlanta (ATL) 931 37%
Quoting Airxliban (Reply 21):
American (Nov 2013)

Dallas/Fort Worth, Texas 641 42%

I thought UA at ORD is 650-ish, DL at ATL should be over 1000, and AA at DFW should cross 700 ?
 
FlyPNS1
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 6:41 pm

Quoting RDH3E (Reply 18):
So Delta has the successful strategy of having 8 hubs:

ATL
DTW
LAX
LGA
JFK
MSP
SEA (up and coming)
SLC

And yet, UA is a failure because of it's 8 hubs...

JFK/SEA/LAX are mostly just international gateways and large O&D operations, they have very little in terms of domestic connections. The vast majority of DL's domestic traffic flows through ATL/DTW/SLC/MSP....just four hubs. UA spreads its domestic traffic over ORD/DEN/CLE/IAD/SFO/EWR...so domestic traffic is more thinly spread. Even worse, UA flies those high CASM RJ's in very competitive markets (like ORD/DEN) which only exacerbates the problem.

I'm not saying UA should close a lot of hubs (probably just one), but the current hub and domestic fleet strategy isn't working that well. UA will muddle along with annual profit margins of about 4% while DL will produce margins twice that much.
 
FlyPNS1
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 6:42 pm

Quoting SkyTeamTriStar (Reply 22):
More options are better to consumers than having less options…

That's true for the consumer, but not necessarily for the airlines' bottom line.
 
point2point
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 6:54 pm

Quoting FlyPNS1 (Reply 24):
JFK/SEA/LAX are mostly just international gateways and large O&D operations, they have very little in terms of domestic connections. The vast majority of DL's domestic traffic flows through ATL/DTW/SLC/MSP....just four hubs. UA spreads its domestic traffic over ORD/DEN/CLE/IAD/SFO/EWR...so domestic traffic is more thinly spread. Even worse, UA flies those high CASM RJ's in very competitive markets (like ORD/DEN) which only exacerbates the problem.

Okay, but UAs international and domestic hubs (EWR, IAD, IAH, ORD, SFO) are much better suited geographically to capture both international and domestic traffic, than say ATL, DTW, MSP and SLC I would think. And LAX has the world's largest O&D base, while DEN and CLE each probably support a large enough O&D base that may rival and even probably exceeds those of DTW, MSP and SLC at least.

I would assume this is all about strategy and what each carrier has to work with at this point.

Quoting FlyPNS1 (Reply 24):
UA will muddle along with annual profit margins of about 4% while DL will produce margins twice that much.

Well, things change.... and while UA will be working to further optimize and enhance its assets, DL is getting into fare wars out west in SEA and a few other places....... remains to be seen what the next few quarters may bring us, eh?

 
 
a380787
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 7:08 pm

Quoting FlyPNS1 (Reply 24):
just four hubs. UA spreads its domestic traffic over ORD/DEN/CLE/IAD/SFO/EWR...so domestic traffic is more thinly spread

SFO is mostly TPAC/Hawaii hub with a tiny bit of up-down west coast thrown in. EWR/IAD are mostly TATL hubs with a tiny bit of up-down east coast thrown in. CLE is barely a hub these days.

Only IAH/ORD/DEN are domestic hubs in the league of DFW/ATL, with ORD (Canadian, some Asian and European) / IAH (Mexico and LatAm) supporting quite a bit of international connections as well.

Only DEN and CLE have low enough O&D that they need to be pure hubs.
 
apodino
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 7:09 pm

Quoting Airxliban (Reply 21):

This is just departures, not capacity, so should be treated as such but nonetheless I was surprised that is AA is the most concentrated in its super hub. I thought DL would have more departures out of ATL than AA out of DFW.

That is a bit misleading as it is a percentage of the network as a whole, and DL has a bigger network than AA. That being said, AA and US are now one. I suspect when you add the US numbers into the equation, DL in ATL will be a higher percentage than AA at DFW.

Quoting tyler81190 (Reply 13):
BINGO!!!

though, UA has put out internal memos stating that the 50 seat era will be coming to an end (wondering what EV thinks about that?) Though I have heard many different timelines, from 2015-2017 it seems UA will follow DL's footsteps in the merger in dumping the 50 seat planes. I know they have many ERJ-175s on order, but IMHO do any of you really see that helping with the hub issues?

It won't help with the hub issues unless they add Mainline flying back into some of their big hubs. If you want to look at a reason UA has revenue problems, it is here. Not only with smaller jets, but the fact is that with more of a reliance on smaller jets, they are also relying more on connections than O and D in key cities (Domestically, they are only third in O and D in Chicagoland behind both WN and AA).

AA/US and DL both have about as many hubs as UA, but DL has been able to optimize its network a lot and has moved a lot of flying back to Mainline as they have the fleet to do so with, AA/US will also have this advantage right off the bat with their merger. UA is bogged down in 50 seat contracts and not enough mainline aircraft. This is clearly an issue they need to address. Dehubbing CLE may be a step in the right direction, but they still have hubs such as IAD, ORD, and LAX that are still far too dependent on Regional lift, and this is shifting traffic to other carriers who have a much better product because they have the right equipment. (Though IAD is more related to DCA than anything UA has done in IAD)
 
FlyPNS1
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 7:10 pm

Quoting point2point (Reply 26):
Okay, but UAs international and domestic hubs (EWR, IAD, IAH, ORD, SFO) are much better suited geographically to capture both international and domestic traffic, than say ATL, DTW, MSP and SLC I would think.

Maybe so, but they are also much more hotly contested hubs. UA has VX trashing yields at SFO. They've got a resurgent AA at ORD (plus WN at MDW). They've got a growing DCA which is sucking domestic traffic away from IAD.

UA boasts a mainline fleet of 700 aircraft, but if you fly through many of UA's hubs you'd wonder where are all these planes. Not surprisingly, much of UA's fleet is consumed just flying long-haul international and between UA's hubs (hub to hub)....this is why many significantly sized metros (STL, BDL, BNA, JAX, etc) see practically no UA mainline.

Quoting point2point (Reply 26):

Well, things change.... and while UA will be working to further optimize and enhance its assets, DL is getting into fare wars out west in SEA and a few other places


And you don't think UA will be impacted by some of DL's wars? SEA-SFO, SLC-SFO, SEA-LAX, SLC-LAX all of which are turning into wars between AS and DL are also flown by UA. Not to mention DL's adds of SEA-LAS, SEA-SAN which can steal connecting traffic away from UA.
 
FlyPNS1
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 7:17 pm

Quoting a380787 (Reply 27):
EWR/IAD are mostly TATL hubs with a tiny bit of up-down east coast thrown in

Sorry, but the vast majority of UA's traffic at both EWR and IAD is actually domestic.

For example at IAD, UA has four major banks. The morning bank is almost purely domestic. The midday bank is almost all domestic (except for PEK/NRT). The late afternoon/evening bank is the only bank with a significant international component. Finally, the late bank which is mostly domestic (except for a handful of flights to Europe, Middle East and GRU).
 
Lexy
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 7:27 pm

Quoting FlyPNS1 (Reply 9):
I think UA is too thinly spread and can't maintain all the hubs and do so with a cost competitive domestic fleet.

One of the reasons DL has been successful has been DL's ability to shut down MEM/CVG and shift connecting passengers onto larger aircraft through fewer hubs. This allows DL to use more mainline aircraft domestically which provide a lower CASM.

UA is spread thin and ends up competing against itself with high CASM RJ's. Want to fly BDL-BNA on UA? You can flying BDL-EWR-BNA, BDL-CLE-BNA or BDL-IAD-BNA....and almost every flight will be a high CASM small RJ. It's not like BDL and BNA are small markets, both are metropolitan areas serving 1.5-2.5 million people (depending on how you measure). But UA is so fragmented, that all it can do is fly RJ's to these markets. This strategy is why UA will continue to underperform DL.

Very well stated. UA seems happy (almost) to have Express Jet flying the 50 seaters to markets where mainline could easily work.
 
apodino
Posts: 4094
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 7:39 pm

Quoting FlyPNS1 (Reply 29):
UA boasts a mainline fleet of 700 aircraft, but if you fly through many of UA's hubs you'd wonder where are all these planes. Not surprisingly, much of UA's fleet is consumed just flying long-haul international and between UA's hubs (hub to hub)....this is why many significantly sized metros (STL, BDL, BNA, JAX, etc) see practically no UA mainline.

This is interesting, because DL has about the same amount of Mainline AC, yet they seem to show up a lot more and on more routes than UA. I don't even know where UA flies Mainline to domestically outside of the big cities, and even some key routes are being partly flown by express. (ORD to LGA, DCA, and BOS are three examples).

You are seeing some UA mainline pop back into some cities, but some cities out there, (MKE is noteable) have mainline service from everyone except UA.
 
Lexy
Posts: 1492
Joined: Wed Jun 07, 2006 10:05 am

RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 7:52 pm

Quoting apodino (Reply 32):
(MKE is noteable) have mainline service from everyone except UA.

BNA is in the same boat and why? They used to support mainline there. I doubt the demand has dropped off for UA at BNA. It's ridiculous because there are times where 3 RJ's are on the UA ramp at the same time at BNA!
 
point2point
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 7:52 pm

Quoting FlyPNS1 (Reply 29):
And you don't think UA will be impacted by some of DL's wars? SEA-SFO, SLC-SFO, SEA-LAX, SLC-LAX all of which are turning into wars between AS and DL are also flown by UA. Not to mention DL's adds of SEA-LAS, SEA-SAN which can steal connecting traffic away from UA.

I'll admit that UA may be impacted some, but it will be residual compared to DL starting all of these fare wars........

And it seems that wisely UA is not going to really be in the SEA area anymore per se (cancelling SEA-NRT) other than probably to/from UA hubs.

 
 
michman
Posts: 901
Joined: Sat Dec 23, 2006 9:51 am

RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 9:37 pm

Quoting point2point (Reply 26):
And LAX has the world's largest O&D base, while DEN and CLE each probably support a large enough O&D base that may rival and even probably exceeds those of DTW, MSP and SLC at least.

From the numbers I've seen, DEN has a significant larger amount of O&D than DTW, MSP and SLC. However, CLE is quite a bit smaller (about 1/2 to 1/3 the size) and CVG is smaller still (only slightly larger than MEM).
 
PSU.DTW.SCE
Posts: 8990
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RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 10:11 pm

Quoting apodino (Reply 32):
This is interesting, because DL has about the same amount of Mainline AC, yet they seem to show up a lot more and on more routes than UA. I don't even know where UA flies Mainline to domestically outside of the big cities, and even some key routes are being partly flown by express. (ORD to LGA, DCA, and BOS are three examples).

I venture to guess the reason it appears that DL has more of a mainline prescence is because of ATL flights, and because they get more cycles per aircraft on the domestic narrowbody fleet than that of UA or AA.
Part of it has to due with hub geography and that DL has numerous examples of short-haul mainline flights primarily into ATL and DTW. Stuff like ATL-CAE/SAV/CHS/MYR/BNA/BHM/JAX etc. DTW-ORD/GRR/PIT/BUF/IND all have flying times under an hour. UA on the other hand, has a lot of mainline going to IAH, and mid-con/trans-con stage length flights going into EWR. In the time an aircraft does one PHL-IAH turn, DL can get double the amount of cycles out of the same aircraft on ATL-CHS turn.

The assumption is that DL has shorter average stage lengths and gets more cycles per domestic mainline aicraft than either AA or UA.. This lends itself as to why DL wanted the 717s.
 
747megatop
Posts: 1785
Joined: Wed May 23, 2007 8:22 am

RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 10:30 pm

Quoting RDH3E (Reply 18):
LAX

Not sure why LAX figures as a hub for DL/AA & UA. LAX is not a hub for any airline IMHO. It is a major O&D market for the airlines involved but does not qualify as a hub in the true sense (arrival and departure banks with passengers connecting between banks).
 
a380787
Posts: 4573
Joined: Tue Jul 09, 2013 4:38 pm

RE: US Airlines Today, Too Many Hubs?

Tue Dec 10, 2013 11:09 pm

Quoting FlyPNS1 (Reply 30):
Sorry, but the vast majority of UA's traffic at both EWR and IAD is actually domestic.

Domestic but O&D heavy. Your original claim that EWR is used in the same way as DEN is quite far from the truth.

UA doesn't have too many hubs, but too many small planes. That's a fixable problem.
 
FlyPNS1
Posts: 5556
Joined: Wed Dec 01, 1999 7:12 am

RE: US Airlines Today, Too Many Hubs?

Wed Dec 11, 2013 12:48 am

Quoting a380787 (Reply 38):
Your original claim that EWR is used in the same way as DEN is quite far from the truth.

I didn't say they were used in the exact same way, however EWR does push a lot of domestic connections.

Quoting a380787 (Reply 38):
UA doesn't have too many hubs, but too many small planes.

But the two problems are related. UA's traffic is spread so thin, they can't profitably fill mainline planes to their hubs. You'll notice that UA has made it clear they don't intend to grow the mainline fleet for the forseeable future. UA's management has no confidence that they could fill mainline planes. So other than some minor upgauges from 50 seaters to 76 seaters, UA will still primarily be a regional affiliate airline on the domestic side.
 
boilerla
Posts: 421
Joined: Wed Jul 28, 2010 5:30 am

RE: US Airlines Today, Too Many Hubs?

Wed Dec 11, 2013 2:16 am

Quoting apodino (Reply 32):

You are seeing some UA mainline pop back into some cities, but some cities out there, (MKE is noteable) have mainline service from everyone except UA.

Maybe because MKE is close to the Chicago area and I know a fair number of Chicagoans (myself included when I lived there) who drive from MKE to ORD because of the superior options and prices.

Quoting Lexy (Reply 33):
BNA is in the same boat and why? They used to support mainline there. I doubt the demand has dropped off for UA at BNA. It's ridiculous because there are times where 3 RJ's are on the UA ramp at the same time at BNA!

Going to 3 different hubs no doubt. One reason I like UA's route structure is that my travel times are shortened and I have options. Pre-merger if I wanted to get to LAX-south I had to connect in DEN or ORD. First, any seasoned traveler should know to avoid DEN & ORD like the plague during the winter. Second, a lot of flows are pretty out of the way for ORD but not IAH...e.g. flying from SFO/LAX to the deep south.

Quoting Lexy (Reply 31):
Very well stated. UA seems happy (almost) to have Express Jet flying the 50 seaters to markets where mainline could easily work.

Depends what "work" means. A 738 is 3x the size of a 50 seater. UA now has 2x hubs to flow that traffic thru, why fly a 738 3x day to 5-6 hubs when, pre-merger, you could only fill a 738 to 2-3 hubs (most stations aren't served by every hub). And a full plane doesn't mean it's profitable...CASM of a 50RJ isn't great, but neither is the CASM of a 70% 738.

One thing UA does NOT do well is manage capacity dynamically. DL is very quick to put mainline on a route temporarily to support more traffic. When IND hosted the superbowl DL was flying widebodies while UA was still mainly RJs. During the winter, how hard is it to find a spare widebody that is normally operating at 2x the utilization during summer?

I also think UA is too willing to let fares sit at H & B levels rather than risk a 2nd flight. Traffic to SBN is probably 50-100% more when there's a ND home game, and DL will run 717s and increase capacity. UA will just run their normal 50 or 70 seat RJ, sometimes not even full, probably because UA wants $1300 for the B fare. DL will have a $400 flight because they added a 2nd or 3rd flight...maybe no $1300 B fares, but it's full of 50-70 seat $400 fares.

It'll be interesting to see what AA does. They will have more passengers combined than UA, but a much higher concentration geographically since they have no west coast hub (I ignore LAX and PHX one is just O&D based, and the other is in the far southwest, not west). A lot of flows will simply have to go thru DFW because geographically it makes sense, but that only compounds the problem now that AA has, with >40% of all its flights going through DFW. On the east coast they have duplication, but can JFK handle the PHL connect



Edit: shortened a bit, got carried away...


[Edited 2013-12-10 18:18:50]
 
seatback
Posts: 673
Joined: Thu Mar 28, 2002 3:00 am

RE: US Airlines Today, Too Many Hubs?

Wed Dec 11, 2013 2:42 am

Quoting ckfred (Reply 19):
For a hub to be profitable, it has to have plenty of O&D traffic. In other words, there has to be a large metro area with plenty of businesses that generate travel. Neither CLE nor CVG are growing metro areas with expanding business bases. Other than P&G and some smaller companies like Convergys, Cinci doesn't have the business base that Chicago, the D/FW Metroplex, or Los Angeles have.

Yet, according to Delta, CVG is now at a point where it's profitable. Additionally, Cincinnati is unlike most similarly sized cities with a large business base. Not only is there P&G, but you also have Macy's, GE Engines, Kroger, Cintas, Luxottica, and 5/3. I'd venture to guess that St. Louis and Cleveland can't compare.I get you can't directly compare with the Chicagos or New Yorks of the world, but impressive nonetheless.

Quoting tommy1808 (Reply 20):
EK profit is eroding. Different from the legacies they don´t have much to make leaner, more efficient and cheaper. They fleet is new and fuel efficient and everything, but they add more and more routings like DXB-LAX to their network. EKs business model is basically gambling, which is only fun as long as you win.

Is EK propped up by the UAE government? If so, we can't really compare EK with independent airlines.
 
a380787
Posts: 4573
Joined: Tue Jul 09, 2013 4:38 pm

RE: US Airlines Today, Too Many Hubs?

Wed Dec 11, 2013 2:48 am

Quoting FlyPNS1 (Reply 39):
But the two problems are related. UA's traffic is spread so thin, they can't profitably fill mainline planes to their hubs. You'll notice that UA has made it clear they don't intend to grow the mainline fleet for the forseeable future. UA's management has no confidence that they could fill mainline planes. So other than some minor upgauges from 50 seaters to 76 seaters, UA will still primarily be a regional affiliate airline on the domestic side.

Then what do you suggest as a solution ? Close CLE and cut IAD/ORD in half ? Upgauge things from ERJ to 319 ? I'd take a small new E70 over a rusty MD80 "mainline" any day of the week
 
FlyPNS1
Posts: 5556
Joined: Wed Dec 01, 1999 7:12 am

RE: US Airlines Today, Too Many Hubs?

Wed Dec 11, 2013 2:58 am

Quoting a380787 (Reply 42):
Close CLE and cut IAD/ORD in half ?

Close CLE and flow that traffic over IAD/ORD. IAD would get about 2/3rds of CLE's flow and ORD would get the other 1/3.

Quoting a380787 (Reply 42):
Upgauge things from ERJ to 319

How about upgauge the ERJ to E170 and then upgauge the E170/CRJ700 to a E195/CS100/737/A319? UA's doing the first part, but failing on the second part which is a problem. While the CRJ700 and E170 are lower CASM than a CRJ/ERJ, they still aren't cost competitive with mainline.

Quoting a380787 (Reply 42):
I'd take a small new E70 over a rusty MD80 "mainline" any day of the week

Are you willing to pay an extra 20% more to cover the higher CASM of that E70 versus that "rusty" E170? As I mentioned, the E170 is a fine plane, but it's not cost competitive with larger mainline planes. UA will lose if they think they can compete using E170's against 737/A320/717/MD80 type aircraft.
 
tyler81190
Posts: 720
Joined: Fri Feb 13, 2009 10:28 am

RE: US Airlines Today, Too Many Hubs?

Wed Dec 11, 2013 3:51 am

Quoting a380787 (Reply 42):
I'd take a small new E70 over a rusty MD80 "mainline" any day of the week

I would tend to agree with you for comfort...

Quoting FlyPNS1 (Reply 43):
Are you willing to pay an extra 20% more to cover the higher CASM of that E70

This is where the problems lies.... It isn't just that there are all these ERJ/CRJ's flying around, it is that many of them are flying with a weight restriction that prohibits a full flight causing a hit to the PRASM.

Prime example: MCI-SFO with CRJ-700 In the summer, it isn't usually a high problem, only a one seat penalty or so. Usually in the winter it is 5-7 seats.

Express flying is expensive, especially when the operator has lax MX or no crew and now the mainline carrier has to rebook 50-70 pax. OA reroutes vary from 40%-60% of a full Y fare to send the pax over.

Hotels might only be $60/night for the contract rate, but add hotel for all pax, plus INVOL to OA at 60% of Y fare, it costs a boat load of money when a small issue happens.

I know you are thinking when it happens to a mainline aircraft, its 3x the people so 3x the cost right?

well, it can be, but the frequency of crew delays and ATC delays for a mainline aircraft are far below a "barbie jet"

When the airline has to choose between canceling a 737 or an ERJ into EWR on a bad day guess which one gets hit first?
This is exacerbated by the fact that there are so many express partners flying, so may different issues come up with each carrier, and you can't swap an ERJ from EV for a CR7 from OO.
 
apodino
Posts: 4094
Joined: Mon Apr 04, 2005 2:11 am

RE: US Airlines Today, Too Many Hubs?

Wed Dec 11, 2013 4:02 am

Quoting boilerla (Reply 40):

Maybe because MKE is close to the Chicago area and I know a fair number of Chicagoans (myself included when I lived there) who drive from MKE to ORD because of the superior options and prices.

I get not wanting to take pax away from a hub. AA though has recently found success with Mainline service from DFW despite ORD being nearby, and rumor has it they may be adding more service as a result. UA used to have success flying to DEN from MKE with the 146, and I don't see why an A319 or two would not work. Here is the other thing. They run I believe 11 R/Ts between ORD and MKE. I get the OO mx base thing, but you wonder how yields are on this shuttle, because it is very similar to the old DAY-CVG route that DL ran back in the day.

Also, UA has not been able to make IAD work even with express service, and you would think they could get a mainline flight or two out of EWR. Remember, US makes PHX work with mainline AC.
 
masseybrown
Posts: 5675
Joined: Wed Dec 11, 2002 2:40 pm

RE: US Airlines Today, Too Many Hubs?

Wed Dec 11, 2013 6:09 am

One thing about CLE that UA likes: no competition. DEN, ORD, LAX, and SFO are margin-killing dogfights. CLE is six million UA pax year in and year out that nobody else is trying to take away. It soaks up sixty planes that would lose money somewhere else. Truth be told, it probably takes more business away from DL in DTW that it diverts from ORD.

When UA's fifty-seaters go, CLE may well go with them; but meantime CLE makes sense and profits.
 
User avatar
Tigerguy
Posts: 566
Joined: Tue Aug 17, 2010 2:28 am

RE: US Airlines Today, Too Many Hubs?

Wed Dec 11, 2013 6:41 am

Having read all of the above, I have a question: what would Delta's strategy have looked like if WN hadn't waltzed up and said "hey, we've got a crapload of 717s we'd like to get rid of..." I know they've wanted to lower the number of 50-seaters, but would the plan have been slowed down if there hadn't been this stroke of good timing?
 
Lexy
Posts: 1492
Joined: Wed Jun 07, 2006 10:05 am

RE: US Airlines Today, Too Many Hubs?

Wed Dec 11, 2013 7:27 pm

Quoting boilerla (Reply 40):

Going to 3 different hubs no doubt.

Good post overall.

Those flights aren't always spread to three different hubs all the time. Take a glance at flightaware and you'll see a lot of it is ORD and IAH bound. UA used to fill mainline at BNA on a daily basis. There is no reason they couldn't now. There are smaller cities with less O&D, and less service on UA, that get daily UA mainline service.
 
luv2fly
Posts: 11056
Joined: Tue May 13, 2003 2:57 am

RE: US Airlines Today, Too Many Hubs?

Wed Dec 11, 2013 7:57 pm

Yes Cleveland is a growing area and like others have pointed out UA has no comp in the market, so to say.

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