United Airlines President: Leaving New York’s JFK ‘Was the Wrong Decision’ {2017}
Apr 23, 2017, 3:04 am
#181
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Location: CLE
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Maybe next headline closing the CLE hub a bad decision. Nice UA seems to be doing well here despite all the new competition. Still flying to non hub routes MCO, FLL, RSW, MKE, BOS, LGA, DCA, SJU, and CUN. Still a crew and maintenance base. The primary reason for pulling out of JFK is they wanted to consolidate everything into EWR. Although UA serves many Overseas routes from EWR still numerous cities are not served and other airlines into JFK and having a domestic operation there for traffic feed would be of great value.
Apr 23, 2017, 3:41 am
#182
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I am a fan of trains, and I will take NJT to EWR, I will also take the subway to JFK if I am near it. But I think my view is VERY, VERY unusual for (a) a non-NYC resident (b) flying premium cabin to NYC. Of the people I know who do this trip routinely (from SFO and LAX) and pay for premium cabin, 95% of them use a car service. I think we can all agree that if you are taking a car service, JFK is vastly superior to EWR much of the time.
Once you take your focus away from "I live in NY and know the quirks" and "I am not paying $2400-$3600 RT for each of my tickets, and think about the people who are paying that and don't know NYC so well, well JFK is just easier...
Once you take your focus away from "I live in NY and know the quirks" and "I am not paying $2400-$3600 RT for each of my tickets, and think about the people who are paying that and don't know NYC so well, well JFK is just easier...
I haven't really done it enough to say whether JFK would be better (though I've managed to get stuck in traffic taking well over an hour from JFK too), but I'm firmly of the opinion that all NYC airports are awful when it comes to getting to/from Manhattan. (And helicopter rides are a bit out of my budget.)
Apr 23, 2017, 7:08 am
#183
Join Date: Dec 2009
Posts: 350
+1
I cannot believe I am agreeing here with Kirby, but he is exactly right.
And that does not apply only to the ex-LAX market - here are two scenes from my recent BOM-EWR trip:
1) At UA BOM checkin line, I was asked by an Indian gentleman how far EWR was from New York. It transpired he was an elite Etihad flier, and apparently was persuaded by his agent to fly UA direct to EWR, instead of flying to JFK with EY via AUH. He had absolutely no idea where EWR was relative to New York, and was quite nervous about it.
2) At the same airport, a security guard that was checking boarding passes at the inter-terminal bus stop - a very lovely and courteous young woman in military uniform, incidentally - looked at my BP and asked: "What is this, EWR?" I explained it was New York's second busiest international airport, but she did not seem persuaded...
Bottom line: JFK is globally recognizable brand, New York's international gateway; EWR... not really.
I cannot believe I am agreeing here with Kirby, but he is exactly right.
And that does not apply only to the ex-LAX market - here are two scenes from my recent BOM-EWR trip:
1) At UA BOM checkin line, I was asked by an Indian gentleman how far EWR was from New York. It transpired he was an elite Etihad flier, and apparently was persuaded by his agent to fly UA direct to EWR, instead of flying to JFK with EY via AUH. He had absolutely no idea where EWR was relative to New York, and was quite nervous about it.
2) At the same airport, a security guard that was checking boarding passes at the inter-terminal bus stop - a very lovely and courteous young woman in military uniform, incidentally - looked at my BP and asked: "What is this, EWR?" I explained it was New York's second busiest international airport, but she did not seem persuaded...
Bottom line: JFK is globally recognizable brand, New York's international gateway; EWR... not really.
I think they've done a lot of branding in New york, but they need to do the branding worldwide outside of New York.
I get that there are some companies who prefer JFK because of location. I don't think that's most or even many. It would only be those located outside of Manhattan. Yes, there are some...but that's the case with every airport including small tiny ones.
Apr 23, 2017, 7:34 am
#184
Join Date: May 2013
Posts: 3,361
Kirby's point is that despite having higher margins at EWR than the estimates that DL enjoys at JFK/LGA, UA's overall profit margins have been much lower than DL's, and mistakes like moving ps flights from JFK to EWR may have contributed to that delta.
In the first quarter of 2017, DL's pre-tax profit margin was 9.26% (excluding special items) while UA's first quarter pre-tax profit margin was 2.3% (also excl special items). That's a huge difference.
In 2016, DL's pre-tax profit margin was 15.4% (again, excl special items) while UA's pre-tax profit margin was 12.2% (again, excl special items).
Looks like UA's margin has been down since the ps flights were moved, and UA's margins have been lower than DL's margin for quite some time now. Problem is, the NYC Newark fans aren't paying enough to cover for all of Smisek's missteps.
Moving the ps flights to EWR and closing JFK may have saved the company some nickels in costs but may have also cost the company some dollars in lost revenue (think of the "network" that was impacted when UA could no longer be found at JFK).
In the first quarter of 2017, DL's pre-tax profit margin was 9.26% (excluding special items) while UA's first quarter pre-tax profit margin was 2.3% (also excl special items). That's a huge difference.
In 2016, DL's pre-tax profit margin was 15.4% (again, excl special items) while UA's pre-tax profit margin was 12.2% (again, excl special items).
Looks like UA's margin has been down since the ps flights were moved, and UA's margins have been lower than DL's margin for quite some time now. Problem is, the NYC Newark fans aren't paying enough to cover for all of Smisek's missteps.
Moving the ps flights to EWR and closing JFK may have saved the company some nickels in costs but may have also cost the company some dollars in lost revenue (think of the "network" that was impacted when UA could no longer be found at JFK).
I think the data points to a near-term benefit from closing JFK with several tens of millions in lower costs and a yield bump from consolidating capacity. Kirby probably sees a longer term opportunity loss (2+ years) from a leakage of corporate traffic. The lack of JFK flights may also hurt his LAX aspirations.
Apr 23, 2017, 8:24 am
#185
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since you aren't sure you understand, let us pivot to WN. They flew to ISP and called it NYC. And OAK and called it SF. And BWI and called it DC. Purposeful - the marketing argument being flying to the larger hubs is inefficient
fast forward and they are now in LGA, SFO and DCA+IAD.
smisek and the HouCrew was a cancer.
Apr 23, 2017, 8:35 am
#186
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EWR could benefit from a name change. Something like "Newark New York International Airport" would signify it serves Newark but also serves as a gateway to New York City. Like "Baltimore Washington International Airport" promotes BWI as serving Baltimore and Washington DC.
I missed the days when UA flew from JFK to NRT/LHR/SFO/LAX/EZE.
Apr 23, 2017, 9:04 am
#187
Join Date: Oct 2016
Location: EWR
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*apart from EWR terminal A which is truly dreadful, but only used by a tiny proportion of UA flights.
Apr 23, 2017, 9:11 am
#188
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It is surprising. UA had trouble with p.s. profitability in JFK ... so EWR is no better? Flights are full every day and it is much better connected to the rest of the UA network. Tomorrow I am flying BOS-EWR-SFO to fly p.s. ... will do that until BOS-SFO becomes p.s. this summer.
I find it strange to hear that the JFK move was bad ... hmmm.
I find it strange to hear that the JFK move was bad ... hmmm.
Apr 23, 2017, 9:18 am
#189
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It is surprising. UA had trouble with p.s. profitability in JFK ... so EWR is no better? Flights are full every day and it is much better connected to the rest of the UA network. Tomorrow I am flying BOS-EWR-SFO to fly p.s. ... will do that until BOS-SFO becomes p.s. this summer.
I find it strange to hear that the JFK move was bad ... hmmm.
I find it strange to hear that the JFK move was bad ... hmmm.
Apr 23, 2017, 9:19 am
#190
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being jammed in the inter terminal trains is nasty. Ewr is a dump. Hence the "ew"
Apr 23, 2017, 9:33 am
#191
Join Date: Feb 2014
Posts: 514
Kirby's point is that despite having higher margins at EWR than the estimates that DL enjoys at JFK/LGA, UA's overall profit margins have been much lower than DL's, and mistakes like moving ps flights from JFK to EWR may have contributed to that delta.
In the first quarter of 2017, DL's pre-tax profit margin was 9.26% (excluding special items) while UA's first quarter pre-tax profit margin was 2.3% (also excl special items). That's a huge difference.
In 2016, DL's pre-tax profit margin was 15.4% (again, excl special items) while UA's pre-tax profit margin was 12.2% (again, excl special items).
Looks like UA's margin has been down since the ps flights were moved, and UA's margins have been lower than DL's margin for quite some time now. Problem is, the NYC Newark fans aren't paying enough to cover for all of Smisek's missteps.
Moving the ps flights to EWR and closing JFK may have saved the company some nickels in costs but may have also cost the company some dollars in lost revenue (think of the "network" that was impacted when UA could no longer be found at JFK).
In the first quarter of 2017, DL's pre-tax profit margin was 9.26% (excluding special items) while UA's first quarter pre-tax profit margin was 2.3% (also excl special items). That's a huge difference.
In 2016, DL's pre-tax profit margin was 15.4% (again, excl special items) while UA's pre-tax profit margin was 12.2% (again, excl special items).
Looks like UA's margin has been down since the ps flights were moved, and UA's margins have been lower than DL's margin for quite some time now. Problem is, the NYC Newark fans aren't paying enough to cover for all of Smisek's missteps.
Moving the ps flights to EWR and closing JFK may have saved the company some nickels in costs but may have also cost the company some dollars in lost revenue (think of the "network" that was impacted when UA could no longer be found at JFK).
Apr 23, 2017, 10:08 am
#192
Join Date: Oct 2015
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Newark is New Jersey. You referring to their LGA operation as a hub?
since you aren't sure you understand, let us pivot to WN. They flew to ISP and called it NYC. And OAK and called it SF. And BWI and called it DC. Purposeful - the marketing argument being flying to the larger hubs is inefficient
fast forward and they are now in LGA, SFO and DCA+IAD.
smisek and the HouCrew was a cancer.
since you aren't sure you understand, let us pivot to WN. They flew to ISP and called it NYC. And OAK and called it SF. And BWI and called it DC. Purposeful - the marketing argument being flying to the larger hubs is inefficient
fast forward and they are now in LGA, SFO and DCA+IAD.
smisek and the HouCrew was a cancer.
Yes, WN was in SFO, left for a while and came back, but OAK is their main operation in the Bay Area (and thank god for that when SFO experiences fog/rain/a slight mist/the threat of any of those things) As is BWI in the DC area.
Agree that LGA is a must have versus Islip, but SFO and DCA are "nice to haves" especially with DCA being so close in. Southwest isn't stacking the deck in SFO, and it can't in DCA.
Sure, JFK a more recognizable brand, but if you subtract folks that would always use JFK over EWR on a ps flight (because I'm guessing there are a reciprocal amount that would do the opposite),what UA actually loses in business because of EWRs brand is very likely immaterial at best. If it wasn't we'd be hearing about it in spades.
Having JFK (or having JFK back for that matter) would be a "nice to have." I'd personally love it, but not having it isn't going to be a deal breaker for the airline. It has a huge hub in the NYC area (see what I did there), that works very well for a lot of people.
Apr 23, 2017, 10:12 am
#193
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Apr 23, 2017, 10:15 am
#194
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I'm not familiar with this issue, but reportedly, BA was not willing to renew UA's lease at T7, which would have forced UA into the non-DL areas of T4 with frequent remote gating.
I don't think it's necessarily a given that UA would be, at this point, able to walk back into T7 and pick up where it left off.
I don't think it's necessarily a given that UA would be, at this point, able to walk back into T7 and pick up where it left off.
Apr 23, 2017, 10:18 am
#195
Join Date: Mar 2015
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As I mentioned earlier, I don't think UA can really consider going back to JFK until they actually have the aircraft to do so. And if/when they do, I would hope that they think about how to elevate the experience (e.g. perhaps going back to all Y+ seats on any JFK routes), instead of just simply doing the same old thing.