Originally Posted by
goodeats21
Thanks EWR764. Very thoughtful post.
If United is really re-entering markets where they totally pulled out, and AA/DL are also running CR2s, then I totally get that. That also makes sense why some voiced concern about price coming down, as that would be a lot of erosion of pricing power for AA/DL, if they didn't face United competition before.
I had no idea that United had started up service at that many airports that they previously were not serving.
I haven't had time to go back and pull up previous transcripts, but I recall the Smisek team doing re-banks at hubs as well. But I guess that was different, as they should now have more feeders, right? I guess I am still cynical that they can pull off tight connections, with high asset utilization, with reliance on UAX, and not impact their "CASM story". But I would be happy to be proved wrong on it.
I don't think the Smisek team ever actually got around to rebanking the hubs, if they discussed it. At CO, the team did the opposite at EWR and IAH in the post-9/11 era when the 'de-peaked' or 'rolling hub' concept was all the rage. ATL is so huge that the operation is somewhat amorphous but fits into a banked structure, while AA (under Kirby) was the first one to reverse course at ORD and DFW a few years ago.
UA management also notes that the CR2 flying is not favorable for CASM, which is where the increased utilization of existing assets can offset that, since it's additional ASMs at the margin using airplanes/gates/crews etc. already factored into the company's cost structure.
but I will note that the CR2s are not being used exclusively to restore / enter markets that United previously didn't serve.
It is true that the CR2s are not being exclusively used for these small markets...