United: We Have Full Confidence In IAH

toxtethogrady · Tue Aug 19, 2014 5:47 pm

Or something equivalent to what the owner of a baseball team says about a manager - just before they fire them. The question is why is this even up for debate?

http://www.houstonchronicle.com/busi...t-is-committed-to-Bush-5696662.php

AeroWesty · Tue Aug 19, 2014 5:50 pm

Quoting toxtethogrady (Thread starter):
The question is why is this even up for debate?

As the story says, United was responding to an analyst's report.

MaverickM11 · Tue Aug 19, 2014 5:54 pm

Quoting toxtethogrady (Thread starter):
The question is why is this even up for debate?

Quoting AeroWesty (Reply 1):
As the story says, United was responding to an analyst's report.

What analyst? It's like debating DFW's place in AA's network.

apodino · Tue Aug 19, 2014 5:58 pm

First IAD now IAH? It seems like no UA hub is safe from Wall Street criticism. That being said, given the size of Houston, its location in the central part of the country, and its natural location to have a latin america hub from, this should be a gold mine for UA. I didn't see the analysts report so I can't comment, but I for once have to agree with UA, that IAH is probably among their most important hubs and should be performing well. The only real competition in the area is the WN operation over at HOU, but in practice it shouldn't really threaten the viability of IAH.

In my opinion, after IAD, the UA operation I would question would be LAX, and possibly DEN. At this rate though, you may even see analysts question the SFO viability.

IrishAyes · Tue Aug 19, 2014 5:59 pm

Unless I completely missed something, I'm fairly sure that the #1 UA hub in question was IAD, not IAH.

It could be that the difference of 1 letter may be throwing everything off, but either way, I'm curious to know more.

Can someone paste the full article?

dirtyfrankd · Tue Aug 19, 2014 6:02 pm

Given that IAH is really the only true fortress hub that they have, one would think that they are going to remain committed to IAH. EWR is a fortress hub as well but sees a lot of competition with JFK and LGA, whereas IAH does not experience even nearly the same level of competition with HOU.

thomasphoto60 · Tue Aug 19, 2014 6:04 pm

Quoting toxtethogrady (Thread starter):

Quoting toxtethogrady (Thread starter):
Or something equivalent to what the owner of a baseball team says about a manager - just before they fire them.

Thinking the same thing when I read it this morning. Frankly, I just do not trust that snake, Smisek. Not saying anything will happen any most likely nothing will come of it, however I would not be too shocked should something "change" in the future between UA and IAH, be it positive or negative

Like to read that report

AVENSAB727 · Tue Aug 19, 2014 6:30 pm

I was perplexed at this first, but upon reading it, I think the report was the same report that had people talking about IAD being de hubbed.

as739x · Tue Aug 19, 2014 6:47 pm

Quoting apodino (Reply 3):
you may even see analysts question the SFO viability.

If some Wall Street joker comes out and would question the most profitable hub of the airline, then at that point you know there is no reason to pay attention to them.

apodino · Tue Aug 19, 2014 6:55 pm

Quoting as739x (Reply 8):
Quoting apodino (Reply 3):you may even see analysts question the SFO viability.
If some Wall Street joker comes out and would question the most profitable hub of the airline, then at that point you know there is no reason to pay attention to them.

Exactly the point I was making. I am trying to come up with a good Onion type article on this

micstatic · Tue Aug 19, 2014 6:55 pm

To me like others have said, it is ridiculous any are even quesitoning IAH as a hub. Couldn't read the article. On a side note, it's strange to see all these city regional newspapers thinking others outside the local market would ever pay to subscribe. For just random aviation article of interest?

SonomaFlyer · Tue Aug 19, 2014 6:59 pm

No way IAH is ever dehubbed by UA. No way, no how.

The fact they question is even asked given IAH's geography, fortress hub status, cachement area all point to an analyst who is bored or uninformed.

FlyingSicilian · Tue Aug 19, 2014 7:17 pm

From the author of the analyst report re: IAH:

"But Heffintrayer agreed that Intercontinental and Houston's Hobby airports appear to be in good shape. He, too, cited United's ongoing agreements with the city of Houston for capital improvements."

jetblue1965 · Tue Aug 19, 2014 7:17 pm

Quoting SonomaFlyer (Reply 11):

The fact they question is even asked given IAH's geography, fortress hub status, cachement area all point to an analyst who is bored or uninformed.

Or worse ... secretly advising clients to short UAL stock then publish negative articles to influence the price action

toxtethogrady · Tue Aug 19, 2014 7:18 pm

The full story was available on AviationPros:

http://www.aviationpros.com/news/116...committed-to-bush-intercontinental

The comments were rather oblique. It seems to me that if UAL can't make IAH, then there's need to question the viability of the whole airline.

That said, Smisek seems determined to shave every last cost off this airline, at which point he will have a lean, mean insignificant little nothing.

CO777DAL · Tue Aug 19, 2014 7:21 pm

This has got to be one of the most stupid articles written. UA dehubbing IAH would be like AA dehubbing DFW, DL dehubbing ATL, EK dehubbing DXB, SQ dehubbing SIN etc. Whatever analyst suggested this needs to be fired. He should be digging holes or something because he is as bright as charcoal.

jetblue1965 · Tue Aug 19, 2014 7:24 pm

Quoting CO777DAL (Reply 15):
He should be digging holes or something because he is as bright as charcoal.

Comparing him to charcoal would be a major insult .... to charcoal

[Edited 2014-08-19 12:24:47]

Rdh3e · Tue Aug 19, 2014 7:45 pm

Quoting apodino (Reply 3):
its location in the central part of the country

To be fair, your comment on IAH being a good location for LATAM connections is correct, but IAH is nowhere near a "central part of the country." It's geography is pretty terrible for connecting anything except the very southern parts of the country to the other southern parts of the country, and for LATAM. Everything else is better served at a different UA hub.

http://www.gcmap.com/mapui?P=EWR,+IAD,+ORD,+IAH,+DEN,+SFO,+LAX

[Edited 2014-08-19 12:46:08]

jayunited · Tue Aug 19, 2014 7:47 pm

Quoting CO777DAL (Reply 15):
This has got to be one of the most stupid articles written. UA dehubbing IAH would be like AA dehubbing DFW, DL dehubbing ATL, EK dehubbing DXB, SQ dehubbing SIN etc. Whatever analyst suggested this needs to be fired. He should be digging holes or something because he is as bright as charcoal.

Exactly I agree with your statement. After reading the entire article I'm not even sure why UA felt it necessary to respond to this analyst's report especially when UA knows IAH is not on the bubble at all.

SonomaFlyer · Tue Aug 19, 2014 8:08 pm

Quoting RDH3E (Reply 17):

Quoting apodino (Reply 3):
its location in the central part of the country

To be fair, your comment on IAH being a good location for LATAM connections is correct, but IAH is nowhere near a "central part of the country." It's geography is pretty terrible for connecting anything except the very southern parts of the country to the other southern parts of the country, and for LATAM. Everything else is better served at a different UA hub.

EWR,+IAD,+ORD,+IAH,+DEN,+SFO,+LAX</i></font></td></tr></TABLE>" target="_blank">http://www.gcmap.com/mapui?P=EWR,+IA...,+LAX

Doesn't matter much really given ORD for central connections and EWR/IAD for east/north-east connections. UA has the pieces in place to do great things. It takes a vision and competent management however to see that vision realized.

Cubsrule · Tue Aug 19, 2014 8:36 pm

Quoting RDH3E (Reply 17):
To be fair, your comment on IAH being a good location for LATAM connections is correct, but IAH is nowhere near a "central part of the country."

IAH is not a good hub for Latin America. It is a great hub (probably the best hub) for Mexico and not a terrible hub for Central America. For the Caribbean and South America, however, it's no good for anyone east of the Mississippi.

LAXdude1023 · Tue Aug 19, 2014 8:50 pm

Seriously, why on earth are you guys even discussing this? Wall Street is always clamoring for big changes to make stocks rise and fall. Thats how they get rich.

IAH isnt going anywhere. IAD isnt going anywhere. Let it go.

Rdh3e · Tue Aug 19, 2014 9:07 pm

Quoting Cubsrule (Reply 20):
IAH is not a good hub for Latin America. It is a great hub (probably the best hub) for Mexico and not a terrible hub for Central America. For the Caribbean and South America, however, it's no good for anyone east of the Mississippi.

So it's a good hub for Mexico and Central America as well as a great hub for the Caribbean and South America for the 42% of all Americans who live west of the Mississippi. I think that makes it a good hub for LATAM.

Cubsrule · Tue Aug 19, 2014 9:11 pm

Quoting RDH3E (Reply 22):
as well as a great hub for the Caribbean and South America for the 42% of all Americans who live west of the Mississippi.

I don't know that I'd go that far. It's quite out of the way for folks in places like MSP and MCI.

jetblue1965 · Tue Aug 19, 2014 9:12 pm

Quoting RDH3E (Reply 22):
Quoting Cubsrule (Reply 20):
IAH is not a good hub for Latin America. It is a great hub (probably the best hub) for Mexico and not a terrible hub for Central America. For the Caribbean and South America, however, it's no good for anyone east of the Mississippi.

So it's a good hub for Mexico and Central America as well as a great hub for the Caribbean and South America for the 42% of all Americans who live west of the Mississippi. I think that makes it a good hub for LATAM.

Basically he had 1 point that he didn't explicitly spell it out - ATL is superior to IAH for deep LATAM so therefore it is superior overall

deltaflyertoo · Tue Aug 19, 2014 11:42 pm

IAH has everything going for it except that of connections. It was a known fact before the merger that the connecting side of IAH was the tough part for CO. That is why CO was often seen as a discount airline or the "cheaper" option in the spoke cities (esp. those further out on the coasts like SF, BOS, DCA, etc) for those willing to "go through Houston" enroute from say DCA to SFO than pay more and go through ATL, ORD, MSP, DTW, CVG and even DFW. Once the merger happened and the capacity issue evened out I read somewhere UA would make IAH the predominant connecting point and make ORD, EWR more O&D (and I dont' know what with DEN). I thought that was odd, I would have thought they'd make DEN more connecting and IAH heavy O&D (even if it meant the cut of connecting flights).

So that said, nobody here or analyst have access to the true numbers-its widely suspected (and probably true) that UA does very well on the high yield O&D biz traffic of IAH and a few connections to C. America and Mexico. But what the numbers say about east/west traffic flows through IAH I'd be curious to know for sure.

BTW those that don't know Houston is in a massive boom that doesn't see any slow down in foreseeable future. In 10 years its predicted it will be the 3rd metro area behind NY and LA (displacing Chicago). So that said a heavy presence is here to stay just how the "hub/connecting flows" factor in (vs. redeploying to the other hubs) remain to be seen.

lpdal · Wed Aug 20, 2014 12:37 am

Quoting apodino (Reply 3):
First IAD now IAH? It seems like no UA hub is safe from Wall Street criticism.

Nobody is safe from Wall Street criticism. WN has been regularly slammed by them for their free bag policy, and they claim that WN would make a lot more cash if they started charging for checked bags like other carriers. WN responded that such a move would alienate its loyal customers, many of which patronize the airline solely for that benefit.

-LPDAL

MaverickM11 · Wed Aug 20, 2014 12:42 am

Quoting deltaflyertoo (Reply 25):
It was a known fact before the merger that the connecting side of IAH was the tough part for CO. That is why CO was often seen as a discount airline or the "cheaper" option in the spoke cities

That is not supported by any data.

Quoting Jetblue1965 (Reply 24):
ATL is superior to IAH for deep LATAM so therefore it is superior overall

I'm not sure by what measure; in almost any Latin market IAH's local market is larger and higher yield than ATL.

jetblue1965 · Wed Aug 20, 2014 12:45 am

Quoting MaverickM11 (Reply 27):

I'm not saying that, but that's the undertone in cubsrule's post

RyanairGuru · Wed Aug 20, 2014 12:55 am

Quoting MaverickM11 (Reply 27):
I'm not sure by what measure; in almost any Latin market IAH's local market is larger and higher yield than ATL.

I was wondering the same, two points:

(1) Deep Latam is not the be-all-and-end-all of Latin America traffic. While it has traditionally been the most high yielding market, with the Argentinian economy in the doldrums and economic growth in Brazil slowing at an alarming rate, it isn't necessarily the gold mine it once was.

(2) Deep Latam is AA's market to loose, period. The MIA hub is simply too invaluable, both from an O&D perspective and in terms of potential connections from the whole of USA and Canada that every other hub pales in comparison.

(3) Other large O&D markets, such as NYC, already have well established links to the region.

(4) 2 and 3 mean that ATL, while in a superior location compared to IAH for North East-Deep Latam connections, serves a tiny O&D base and relies on connections, which aren't necessarily particularly high yielding. ATL is a stronger market than CLT, but Atlanta ain't no Miami.

(5) The fastest growing economies in the region right now are optimally served by IAH. I'm talking about Colombia, Peru, even some central American states and Mexico. The potential for growth to Central America and Northern-South America is still absolutely massive, and IAH is perfectly placed for that traffic (although admittedly MIA is better for Colombia/Peru from the North East).

This isn't an attempt to debase ATL or sing IAH's praises, but rather point out that IAH is not some sort of back-water when it comes to Latam. UA's biggest concern, though, should be DFW. At the end of the day DFW, can serve the same north-south traffic flows as IAH, and while AA haven't been overly aggressive in Latam expansion from DFW up until now, instead focussing on MIA, their already massive footprint in Latam means that I wouldn't be surprised if they add additional markets going forward (such as the relatively recent DFW-BOG flight).

cosyr · Wed Aug 20, 2014 12:55 am

Is this the same analyst who said United and JetBlue should swap planes?

SLCUT2777 · Wed Aug 20, 2014 1:15 am

Quoting Cubsrule (Reply 23):
I don't know that I'd go that far. It's quite out of the way for folks in places like MSP and MCI.

For people who live in the Eastern Time Zone. I would not want to backtrack to IAH to get to GIG ir I were trying to get there from say BOS.

Cubsrule · Wed Aug 20, 2014 1:46 am

Quoting Jetblue1965 (Reply 24):
Basically he had 1 point that he didn't explicitly spell it out - ATL is superior to IAH for deep LATAM so therefore it is superior overall

Thanks for putting words in my mouth. You picked the wrong ones.

The actual point is this: "Latin America" (which a.net seems to use, somewhat gratingly to geography buffs' ears, to mean anything south of El Paso and in the Western Hemisphere) is an enormous region and, for that reason, it's difficult to find a hub that is "good for Latin America."

As I mentioned above, IAH, which is a connecting powerhouse and a strong local market in its own right, is a in a great location to funnel traffic to Mexico, pretty good for Central America and not so good for South America and the Caribbean. DFW has similar advantages.

ATL, also a connecting powerhouse, is well-located for the Caribbean and South America, less so for Mexico and Central America (and, as discussed above, its local traffic numbers are weaker to most points).

MIA has less domestic feed but also has a location with similar strengths to ATL and a seemingly bottomless local market which allow flights to cities that cannot--and will likely never be able to--support other service to the States.

Each of these, plus a few more cities, is a good hub to parts of "Latin America." "Latin America" and, for that matter, the States, are too large, however, for any single hub to really have the ability to connect all points between the two.

Quoting RyanairGuru (Reply 29):
The fastest growing economies in the region right now are optimally served by IAH. I'm talking about Colombia, Peru, even some central American states and Mexico. The potential for growth to Central America and Northern-South America is still absolutely massive, and IAH is perfectly placed for that traffic

Peru is pretty far east; if you draw a line straight north from LIM, it hits the States around ILM. That said, for most of the central time zone, picking IAH over (say) MIA for a connection only adds a couple hundred miles. UA's lousy domestic product probably drives more people away from picking UA to a place like LIM than does IAH's location.

MaverickM11 · Wed Aug 20, 2014 1:52 am

Quoting SLCUT2777 (Reply 31):
For people who live in the Eastern Time Zone. I would not want to backtrack to IAH to get to GIG ir I were trying to get there from say BOS.

CLT would be even better than ATL for that, so the value can be questionable.

jetblue1965 · Wed Aug 20, 2014 1:54 am

Quoting Cubsrule (Reply 32):

It was very clear you were attempting to appraise ATL and MIA over IAH in your original post 20. Those are the only 2 "east of the Mississippi" that fits the bill of what you consider a deficiency of IAH.

Here's how you put in very bluntly :

"IAH is not a good hub for Latin America."

NOLAWildcat · Wed Aug 20, 2014 2:06 am

Quoting Cubsrule (Reply 23):

I don't know that I'd go that far. It's quite out of the way for folks in places like MSP and MCI.

Actually, IAH is a decent connection for those two cities to the Caribbean or South America. Both of those cities are essentially due north of Houston. Miami may be better geographically, but Houston probably generates more O&D leading to more flights and connection opportunities (Atlanta is a different story). The same holds for other cities like MSY and STL that lie between W85 and W95. If you can't build a hub in Miami or Atlanta, Houston is an idea Latin American and Caribbean connection point for anything west of Chicago. There's a reason why MSY, which supported Caribbean service for decades, currently sees no international service to the south while United flies packed 737-900s (and 757-300s and the occasional 767-400 in the past) to Houston all day long.

Of course, it's a different story if you live east of Chicago, but Houston is a good market for Latin America both geographically and from an O&D standpoint. Thus Southwest's push to turn Hobby into their main Latin American gateway.

Cubsrule · Wed Aug 20, 2014 2:09 am

Quoting Jetblue1965 (Reply 34):
It was very clear you were attempting to appraise ATL and MIA over IAH in your original post 20. Those are the only 2 "east of the Mississippi" that fits the bill of what you consider a deficiency of IAH.

If you want to look at relative strength to South America--the point I made in Post 20--there's no question that ATL and MIA are stronger. For instance, both have sustained service to SCL (more than daily at times in both cases) for decades. Despite having the 762, arguably a perfect airplane for IAH-SCL, CO never even tried it.

If you want to look at relative strength to Mexico, it's equally clear that IAH is better.

Again, IAH is a good hub for some US-Latin America itineraries. It's a lousy hub for others. The same is true of most competitor hubs.

CALMSP · Wed Aug 20, 2014 2:13 am

Quoting Cubsrule (Reply 36):

lousy how? what is "lousy" based on?

SLCUT2777 · Wed Aug 20, 2014 2:13 am

Quoting MaverickM11 (Reply 33):
CLT would be even better than ATL for that, so the value can be questionable.

It also explains why any of the big carriers; AA, DL or UA have tried to build up LAX beyond Mexico and parts of Central America despite a huge presence of expats deeper in to Latin America..

jetblue1965 · Wed Aug 20, 2014 2:15 am

Quoting Cubsrule (Reply 36):

That's my point. "LatAm" includes everything from Tijuana to Ushuaia, so to flatly proclaim IAH being not good is skewing it.

OA412 · Wed Aug 20, 2014 2:27 am

Quoting Jetblue1965 (Reply 34):

No he really didn't. With all due respect, you're reading way too much into his original post, and taking offense for all the wrong reasons. The only assertion Cubsrule made is that IAH is not a good hub for deep South America. There was nothing in his post to lead to the conclusion that was, therefore, trying to prop ATL up at IAH's expense.

IAHflyer97 · Wed Aug 20, 2014 2:32 am

Why are we still debating this?

Cubsrule · Wed Aug 20, 2014 2:38 am

Quoting CALMSP (Reply 37):
lousy how? what is "lousy" based on?

Being hours out of the way for an itinerary like BDL-EZE or BUF-GRU.

Quoting Jetblue1965 (Reply 39):
"LatAm" includes everything from Tijuana to Ushuaia, so to flatly proclaim IAH being not good is skewing it.

How so? It's not a good hub for Tiajuana to Ushuaia. No hub is.

777Jet · Wed Aug 20, 2014 2:40 am

Quoting IAHflyer97 (Reply 41):
Why are we still debating this?

IAH serves the 4th largest US city in terms of population. I'm sure that even the most poorly managed airline (a category in which many would place UA) could make such an airport work and have full confidence in doing so...

toxtethogrady · Wed Aug 20, 2014 3:51 am

Quoting deltaflyertoo (Reply 25):
IAH has everything going for it except that of connections.

I'm not sure that's a correct criticism. There are hubs in strange places in this country - Detroit, Minneapolis-St. Paul, Phoenix. Charlotte is only central to the East Coast, yet it pushes 45 million passengers a year. Phoenix is near the West Coast and far from everywhere else, but it handles over 40 million passengers a year. If being centrally located made an airport a good hub, American would still be in St. Louis.

The key to a hub is connections to enough cities to make the cross-feed work, efficiency of operations, and marketing. Continental under Bethune connected Houston to enough cities at convenient times that the hub was able to push almost 45 million passengers. When 9-11 happened, Houston still had enough traffic that it became the tenth largest airport in the world for a few months (based on passenger traffic). What has kept United from doing their best is their elimination of many Texas markets, effectively ceding the turf to American, and their over-reliance on 50-seat regional jets, which are not passenger friendly and limit the passenger volumes. They've also turned down opportunities from certain cities in the Midwest to provide air service in exchange for incentive money (which is why American and not United flies to Lincoln, NE). It's also hard to find connecting flights from smaller East Coast markets to West Coast markets on United using Travelocity or Orbitz. To some extent, Smisek has tried to discourage connecting traffic, hoping to fill up more seats with O&D passengers out of the hub cities at higher fares, but it's not working.

I won't say anything about United's abysmal inability to cut its fuel costs; Delta is bragging plenty about how advantageous Trainor is to their operations.

toxtethogrady · Wed Aug 20, 2014 3:54 am

Quoting LAXdude1023 (Reply 21):
Wall Street is always clamoring for big changes to make stocks rise and fall. Thats how they get rich.

Yeah, some venture capitalists are hounding Apache, a $20 billion oil company, because they won't sell assets and return cash to shareholders. How dare a company think long term, when Wall Street wants a quick killing now!

[Edited 2014-08-19 20:55:48]

klwright69 · Wed Aug 20, 2014 5:40 am

Quoting SLCUT2777 (Reply 31):
For people who live in the Eastern Time Zone. I would not want to backtrack to IAH to get to GIG ir I were trying to get there from say BOS.

People backtrack all the time to get the cheapest fare. I am flying way out of my way today to get a cheap fare for example.

I don't know how many times we can have the same tit for tat discussions at a.net. It's always this vs that. Some hubs are superior for some routings, some not.

Max Q · Wed Aug 20, 2014 8:31 am

This is the double edged sword with having so many hubs in such major markets.

It's a great concept but it's never been done before, it takes brilliant management (strike one) healthy finances (strike two) and a major financial commitment to build a sufficiently large fleet (along with great customer service) to dominate each hub city

Strike three.

In the absence of these strengths at the current United under the very weak management in place the myopic focus is on cutting costs by downsizing.

So the very advantages of this merger (the strongest route and hub system of any US carrier) are slowly being dissolved due to management incompetence.

Expect to see more 'denials' of shrinkage' but its already occurring and more hubs will be shut down.

jetblastdubai · Wed Aug 20, 2014 9:03 am

Quoting toxtethogrady (Reply 44):
(which is why American and not United flies to Lincoln, NE).

United flies to LNK and AA doesn't.

cosyr · Wed Aug 20, 2014 11:59 am

Quoting Cubsrule (Reply 36):
If you want to look at relative strength to South America--the point I made in Post 20--there's no question that ATL and MIA are stronger. For instance, both have sustained service to SCL (more than daily at times in both cases) for decades. Despite having the 762, arguably a perfect airplane for IAH-SCL, CO never even tried it.

There is a huge flaw in that logic. The last time CO flew to SCL, it was a much smaller airline, with fewer connections, and too big a plane. In between then and the merger with UA, CO was an airline with a stretched thin international fleet. They did not have 762 just laying around (2 in fact for South America) to start a new route. The fact that they did not fly it does not prove that they wouldn't be successful with it. I have never played cricket, so I must not be able to?

ATL and MIA are closer to all of South America, but if you are flying from west of the Mississippi, than IAH would be the shortest connection. Also there is plenty of trade between both Texas and California and Chile, that could provide a unique market that wouldn't make much sense connecting in ATL.

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