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Does UA need a Southeast hub?

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Old Oct 23, 2014, 7:41 pm
  #1  
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Does UA need a Southeast hub?

Arguably, all the airlines are weak in one part of the country. Even the new AA is weak in the Northwest (though the AS codeshare partially makes up for that). The weakest part of the country for UA has to be the Southeast, especially Florida. I know expansion isn't exactly on UA's radar right now, but do you think UA should consider a hub, or even focus city, somewhere in the Southeast?
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Old Oct 23, 2014, 7:49 pm
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United actually has a decent hub distribution in the U.S. IAD and IAH both serve the Southeast pretty well. It's close to the same distance from IAD to MCO as it is from SFO to SEA. Without a significant presence in Latin America for connections, Florida would be a dead-end (in more ways than one).
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Old Oct 23, 2014, 7:56 pm
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Originally Posted by bridge29
Arguably, all the airlines are weak in one part of the country. Even the new AA is weak in the Northwest (though the AS codeshare partially makes up for that). The weakest part of the country for UA has to be the Southeast, especially Florida. I know expansion isn't exactly on UA's radar right now, but do you think UA should consider a hub, or even focus city, somewhere in the Southeast?
UA actually has a pretty strong presence in MCO (and even TPA) - maybe not the strongest, but definitely serves it needs for Florida area and then to transfer folks over to Silver.

I don't think they need anything more in Florida, wouldn't justify the pax load.
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Old Oct 23, 2014, 8:05 pm
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How would this help?

From Jacksonville, one can get to four hubs: ORD, IAH, EWR and IAD.
From Miami, one can get to three: EWR, IAH and ORD.
From Orlando, one can get to six: ORD, DEN, IAH, LAX, SFO and IAD.
From Tampa, one can get to four: ORD, DEN, IAH, and IAD.
From Ft. Lauderdale, one can get to three: ORD, IAH and EWR.

The largest city without UA service seems to be Tallahassee.
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Old Oct 23, 2014, 8:17 pm
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Originally Posted by Miles Ahead
How would this help?

From Jacksonville, one can get to four hubs: ORD, IAH, EWR and IAD.
From Miami, one can get to three: EWR, IAH and ORD.
From Orlando, one can get to six: ORD, DEN, IAH, LAX, SFO and IAD.
From Tampa, one can get to four: ORD, DEN, IAH, and IAD.
From Ft. Lauderdale, one can get to three: ORD, IAH and EWR.

The largest city without UA service seems to be Tallahassee.
It would help with N-S east coast traffic. For example, flying from PHL-PNS I have to connect in IAH. Makes no sense. ATL and CLT are effective at funneling traffic from the north to south and vice versa through the Southeast. IAD doesn't connect enough cities in the Southeast and IAH is too far west.
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Old Oct 23, 2014, 8:25 pm
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Flarida is well-served by United, they don't really need more of a "hub" beyond IAD and IAH.

What are they going to do, have a bloodbath with DL?
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Old Oct 23, 2014, 8:39 pm
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Originally Posted by bridge29
For example, flying from PHL-PNS I have to connect in IAH. Makes no sense.
It makes a lot more sense than setting up a hub to satisfy a handful of oddball routes. One flight from EWR or IAD would do a far better job in your situation, but there doesn't appear to be sufficient traffic to warrant even that.
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Old Oct 23, 2014, 9:09 pm
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When Parker was making his play for AA, one of the analysts noted that AA had no way to connect passengers from, say, Richmond to Jacksonville, and thus, AA would fail unless US and AA merged. He was correct that AA had no hub to logically connect those two cities, but is it essential for every airline to serve every possible city pair with a well-placed hub? For instance, DL has no hub in Texas, while AA and UA have bigs hubs at DFW and IAH, respectively.

I have no idea how many passengers regularly fly RIC-JAX, but I have to believe it's a small number.

Hubs are expensive, and maybe the better option is to save some of that $$$ and let another airline run that expensive hub. Cater to your loyal customers up to a point and then, for those rare times they need to fly RIC-JAX, then can fly DL or US. It's not a sin to fly another airline occasionally.
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Old Oct 23, 2014, 9:13 pm
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Originally Posted by bridge29
It would help with N-S east coast traffic. For example, flying from PHL-PNS I have to connect in IAH. Makes no sense.
That's spoke to spoke traffic. That's the nature of the beast. If you want to fly IND-CMH, you'll be flying 2.5 times farther than you have to.

For that route, IAD would certainly make more sense. But that's an argument that the existing hub system needs another flight (IAD-PNS) and not that there needs to be another hub.
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Old Oct 23, 2014, 9:30 pm
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Does UA need a Southeast hub?

UA is not going to up its southeast/Florida flights out of IAD with the heavy competition in place out of DCA. WN is even starting DCA-TPA service; B6 already flies DCA-FLL. No way that UA can compete within the DC market for O&D on these routes.
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Old Oct 23, 2014, 9:54 pm
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Does UA need a Southeast hub?

No they don't
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Old Oct 23, 2014, 10:37 pm
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Originally Posted by Miles Ahead
From Orlando, one can get to six: ORD, DEN, IAH, LAX, SFO and IAD.
Minor omission: MCO-EWR is also currently available.
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Old Oct 23, 2014, 11:12 pm
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and for flights to South Carolina from the west Coast, for instance, it's easier to fly to a US hub charlotte and drive instead of taking an infrequent UA flight to a congested (and oft-delayed since it's a little place) hub like Chicago

it's one of the times when I regret Star Alliance losing US ... and why I renewed my AA flights. (it certainly wasn't DFW)
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Old Oct 24, 2014, 12:00 am
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Originally Posted by bridge29
Arguably, all the airlines are weak in one part of the country. Even the new AA is weak in the Northwest (though the AS codeshare partially makes up for that). The weakest part of the country for UA has to be the Southeast, especially Florida. I know expansion isn't exactly on UA's radar right now, but do you think UA should consider a hub, or even focus city, somewhere in the Southeast?
AAL is weak in the NW (WA/BC/OR/ID/MT) and in the pacific. It is adding flights to Asia and has strong partners (JAL/CX) and AS. For Corporate Travel there are no meaningful holes, other than own-metal pacific service.

DAL had major weaknesses on the entire west coast, and in CA in particular, and in NYC. It also had little south American network, and was overly dependent on connections in NRT, with no strong local partners. They have been agressively attacking each of these issues, and particularly ex-NYC/LAX and in the NW (and ex-SEA) have made major investments. At this point, they probably have the best nationwide network. The only weak spot is probably the lack of a TX hub.

United c2011 had the best network, with the only weak spots being the SE as you note. But they had US to backfill ex-charlotte and up and down the East Coast. Now with US gone, they have a major regional hole, and unlike with AA and AS, no code shares to fill it, let alone reciprocal FF benefits. But I don't see a natural place for a hub, nor that it would be profitable.

But I would argue that the cut backs on the NW (ex-PDX/SEA, and secondary cities) and the loss of market share ex-LAX, alone with pressure at secondary CA airports (e.g. SAN, SNA, SMF) and ex-SFO from VX is a bigger issue, and would be a better place to try to fix issues. There is a lot of valuable corporate traffic on these routes, and trying to serve them with connections at SFO will just not fly with the SFO delays.

It will be interesting if the weakness in both the SE and NW hurt them with corporate accounts at year end renewals.
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Old Oct 24, 2014, 12:17 am
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Totally disagree

UA's pullback in SEA isn't nearly as dramatic as is pointed out here, and continues to be harped on elsewhere. All UA did was pull a NRT flight, which is in line with their strategy of pulling back on the Narita hub. Does UA expect to capture all the same traffic they did before? Certainly not. But that shouldn't cause all the same doom and gloom here. Delta did something similar. They pulled SFO-NRT. a long-standing NW/DL route, in line with their strategy to reduce NRT exposure. They certainly dont expect all their former customers in SFO to fly them over SEA - they are aware of the fact that there are many options - nonstop options - out of SFO, and are aware that they'll lose some customers. As far as UA at sea, UA had already pulled SEA-ANC years ago and re-entered briefly due to the CO merger. The only reason CO served that route was as a tag on from IAH, especially for the winter, which is when demand for nonstop IAH-SEA withered. Now with DEN and SFO as hubs, UA doesn't need that SEA segment anymore, so it went away.
Overall, UA serves the PNW well from all its hubs, with seasonal adjustments to capacity in line with seasonal demand adjustments. Delta serves all of its markets everywhere and makes massive seasonal adjustments.
I don't see the doom and gloom from not having a large PNW network that you seem to. DL is weak in Texas - a booming market. AA is weak in the PNW (and no matter how much is pointed out, not serving a place with one's own metal does put them in a weak spot). UA is very strong in SF and has flights from LAX to most of the largest markets. They can't be everything to everybody and have chosen to be big at SFO. DL took SEA because it was all that was left. And AA is one of a number of airlines in a fragmented LA marketplace.
I use to work as a corporate travel buyer and later in the corp sales division at one of these airlines and honestly don't see that UA's PNW presence would be a deterrent to a renewal, unless my company was primarily based and traveled extensively in the region. For access to the largest US markets and internationally, UA is just as competitive as the others, so it would all come down to where my travelers need to go.



Originally Posted by spin88
AAL is weak in the NW (WA/BC/OR/ID/MT) and in the pacific. It is adding flights to Asia and has strong partners (JAL/CX) and AS. For Corporate Travel there are no meaningful holes, other than own-metal pacific service.

DAL had major weaknesses on the entire west coast, and in CA in particular, and in NYC. It also had little south American network, and was overly dependent on connections in NRT, with no strong local partners. They have been agressively attacking each of these issues, and particularly ex-NYC/LAX and in the NW (and ex-SEA) have made major investments. At this point, they probably have the best nationwide network. The only weak spot is probably the lack of a TX hub.

United c2011 had the best network, with the only weak spots being the SE as you note. But they had US to backfill ex-charlotte and up and down the East Coast. Now with US gone, they have a major regional hole, and unlike with AA and AS, no code shares to fill it, let alone reciprocal FF benefits. But I don't see a natural place for a hub, nor that it would be profitable.

But I would argue that the cut backs on the NW (ex-PDX/SEA, and secondary cities) and the loss of market share ex-LAX, alone with pressure at secondary CA airports (e.g. SAN, SNA, SMF) and ex-SFO from VX is a bigger issue, and would be a better place to try to fix issues. There is a lot of valuable corporate traffic on these routes, and trying to serve them with connections at SFO will just not fly with the SFO delays.

It will be interesting if the weakness in both the SE and NW hurt them with corporate accounts at year end renewals.
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