Delta weak in Mountain-West despite SLC hub
#61
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IMO, A lot of UA's strength in the Mountain West region is because of EAS. I'm amazed at how many tiny airports throughout CO, NE, SD, UT, and WY receive daily service to DEN. While I haven't looked THAT hard, I can't think of another region in the US with so many subsidized routes.
https://www.transportation.gov/sites..._Feb2020_0.pdf
In addition to much of the Mountain West and Great Plains area, the upper Midwest (remote parts of Michigan and Minnesota) have quite a few EAS-served cities. Same with some parts of the Southeast in Mississippi and Alabama. For some of the cities on the list, it's infuriating from a taxpayer standpoint that they receive an EAS contract when there might be another reasonably sized airport serving the area within a 1-1.5 hour drive, especially in parts of the country where weather is a non-issue. But my speculation is that once the CRJ-200s are gone, even more cities will be clamoring for EAS contracts if major carrier service is dropped (which we could see at even more smaller markets across the Southeast and Midwest and such).
#62
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This is off-topic, but AA, UA & WN have hubs in the south-central US (aka greater Texas region). I believe Delta makes Austin a ‘large’ focus city within 3 years. Bigger then Boston, maybe similar to LGA. (Not like SLC or anything, but big enough). The money is coming in...changing demographics / influx of wealth and the tech sector continues to expand. Check back in 2024...
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I would just call it Texas, MSY/MEM don't have the growth and O/D traffic to support a buildup and PHX is already AA/WN territory
#65
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Having worked at IAD (then WHQ World HQ) for UA in the 2000's, I'm quite familiar with the IAD hub op. Back in the 2000's it used to be significantly larger. At one point they had hourly CRJs from LGA/RDU-IAD and some other cities. Hard to believe that nowadays. At the time, they only had 90 mainline flights a day, and somewhere between 200-300 UAX flights (many of the mainline are Int'ls). I don't think that's changed a whole lot, except for frequency reductions, which were severe after they shuffled regionals, and then the CO acq. IIRC, IAD has 4 main connection banks (and I think that's still the same). The busiest is the 5-6pm bank which has flights to pretty much all of it's European destinations. The late bank had a few more flights to LHR/FRA, and then EZE/GRU/KWI if memory serves. At the time I was there, all the TPAC flights (we only had NRT back then) left around noon. I would actually say IAD performs almost like more of a gateway than a true domestic connecting hub. Like many gateways (and hubs) the best revenue comes from the premium Int'l traffic, and that's why it still exists with EWR so close by. The DC Metro is a huge cachement area for premium traffic.
UA is not moving this hub to RDU, or anywhere else in the South. All airlines don't have to be strong in every market. UA is a bit week Intra-SE, just like DL/AA are intra Mountain West.
UA is not moving this hub to RDU, or anywhere else in the South. All airlines don't have to be strong in every market. UA is a bit week Intra-SE, just like DL/AA are intra Mountain West.
I hope you're aware that ATL wouldn't have the sort of service it does if it weren't for Delta having a hub there. Their O/D would never be able to support the amount of domestic and international flights they currently have. RDU isn't much different when it comes to O/D and no reason why a hub there wouldn't work.
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Additionally no one has said UA is staying out of an entire region - they already do serve many markets in the Southeast. They are just choosing not to be the carrier than effectively connects all those cities to each other within the Southeast since with significant other legacy and even some LCC competition, UA knows the yields would be trash and an operation going after connecting traffic and trying to rely solely on connecting traffic in area already well-served with two major hubs would be asinine.
I hope you're aware that ATL wouldn't have the sort of service it does if it weren't for Delta having a hub there. Their O/D would never be able to support the amount of domestic and international flights they currently have. RDU isn't much different when it comes to O/D and no reason why a hub there wouldn't work.
RDU makes a great focus city operation which is why you see DL operating many point-to-point flights since these routes can be supported by high O&D numbers. But RDU isn’t going to become a large scale hub for shuttling connecting traffic around the Southeast. Operating economics and the realities of what drives yields and revenue premiums don’t support this. If it was economical you wouldn’t have seen hubs like MEM, CVG, CLE, PIT (or even RDU back in the 90s with AA) downsized or closed completely except for flights to other hubs.
#67
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There’s quite a difference between a focus-city which is a smaller operation and is mostly focused on point-to-point flying which can be supported significantly by higher yield O&D versus building a hub that is trying to rely almost entirely on lower yield connecting traffic.
Additionally no one has said UA is staying out of an entire region - they already do serve many markets in the Southeast. They are just choosing not to be the carrier than effectively connects all those cities to each other within the Southeast since with significant other legacy and even some LCC competition, UA knows the yields would be trash and an operation going after connecting traffic and trying to rely solely on connecting traffic in area already well-served with two major hubs would be asinine.
It was explained to you why it wouldn’t work. You can’t just choose to ignore the realities of operating economics and the hub-and-spoke model and what makes it work. Additionally trying to say ATL isn’t all that different from Raleigh-Durham is silly when the ATL metro area is 3 times the population of Raleigh-Durham and the combined statistical area is nearly 3.5 times larger than Raleigh-Durham. 6 million vs 2 million and nearly 7 million vs 2 million. That’s not an insignificant difference.
RDU makes a great focus city operation which is why you see DL operating many point-to-point flights since these routes can be supported by high O&D numbers. But RDU isn’t going to become a large scale hub for shuttling connecting traffic around the Southeast. Operating economics and the realities of what drives yields and revenue premiums don’t support this. If it was economical you wouldn’t have seen hubs like MEM, CVG, CLE, PIT (or even RDU back in the 90s with AA) downsized or closed completely except for flights to other hubs.
Additionally no one has said UA is staying out of an entire region - they already do serve many markets in the Southeast. They are just choosing not to be the carrier than effectively connects all those cities to each other within the Southeast since with significant other legacy and even some LCC competition, UA knows the yields would be trash and an operation going after connecting traffic and trying to rely solely on connecting traffic in area already well-served with two major hubs would be asinine.
It was explained to you why it wouldn’t work. You can’t just choose to ignore the realities of operating economics and the hub-and-spoke model and what makes it work. Additionally trying to say ATL isn’t all that different from Raleigh-Durham is silly when the ATL metro area is 3 times the population of Raleigh-Durham and the combined statistical area is nearly 3.5 times larger than Raleigh-Durham. 6 million vs 2 million and nearly 7 million vs 2 million. That’s not an insignificant difference.
RDU makes a great focus city operation which is why you see DL operating many point-to-point flights since these routes can be supported by high O&D numbers. But RDU isn’t going to become a large scale hub for shuttling connecting traffic around the Southeast. Operating economics and the realities of what drives yields and revenue premiums don’t support this. If it was economical you wouldn’t have seen hubs like MEM, CVG, CLE, PIT (or even RDU back in the 90s with AA) downsized or closed completely except for flights to other hubs.
#68
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Airlines look at ALL of this stuff and look at competing and complementary factors. They also do not make such decisions in a vacuum. What works in one scenario doesn’t mean it will work elsewhere. Your argument about an RDU hub requires picking and choosing the facts that support what you want and ignoring the other factors that don’t support the argument of UA opening a large connecting hub at RDU and requires analyzing it in a vacuum to say “there’s no reason why a hub there wouldn’t work.”
#69
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There’s no defined percentage of connecting versus O&D traffic that says “this is the percentage at which a hub will work and a percentage at which it won’t.” Local population size is also one factor among many. Another factor is whether that local population or other aspects of that city generate traffic. Other factors include whether that hub is gaining traffic or canibalizing traffic from other hubs for that airline and how much competition that hub has to contend with from other airlines.
Airlines look at ALL of this stuff and look at competing and complementary factors. They also do not make such decisions in a vacuum. What works in one scenario doesn’t mean it will work elsewhere. Your argument about an RDU hub requires picking and choosing the facts that support what you want and ignoring the other factors that don’t support the argument of UA opening a large connecting hub at RDU and requires analyzing it in a vacuum to say “there’s no reason why a hub there wouldn’t work.”
Airlines look at ALL of this stuff and look at competing and complementary factors. They also do not make such decisions in a vacuum. What works in one scenario doesn’t mean it will work elsewhere. Your argument about an RDU hub requires picking and choosing the facts that support what you want and ignoring the other factors that don’t support the argument of UA opening a large connecting hub at RDU and requires analyzing it in a vacuum to say “there’s no reason why a hub there wouldn’t work.”
And no one has given me an answer of why UA still haven't been able to make IAD work after 35 years. They have steadily dropped and added routes, tried TED, and haven't made any improvements to their facilities.
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#71
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I'm one of the biggest RDU fans there are, but I'm also not delusional enough to claim it "isn't much different" than the ATL O/D market.
#72
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False. I've never in a single post said either of those. Maybe you're quoting the wrong person. UA doesn't "stay out" of the SE, they just don't have as good of an intra-SE hub as DL or AA.
Really?? Thanks for stating the obvious.
I'm one of the biggest RDU fans there are, but I'm also not delusional enough to claim it "isn't much different" than the ATL O/D market.
Really?? Thanks for stating the obvious.
I'm one of the biggest RDU fans there are, but I'm also not delusional enough to claim it "isn't much different" than the ATL O/D market.
#73
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The airlines don’t really want to compete with each other. One competitor is ok, more is bad. No chance UA wants to enter the SE when AA and DL have plenty of connecting flights.
#74
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Second, you seem to be under the false impression anyone on FT owes you that answer. The only people who would "owe" that answer are the people responsible for overseeing it and that is the UA execs in the Willis Tower in Chicago and they are only accountable to the board and the shareholders, and they obviously feel that maintaining the hub at IAD is in their interest for the time being. Given that Washington, D.C. is the nation's capital and the 6th largest metro area and the 4th largest CSA in the country, I don't see that changing.
UA serves all of these. They just choose to do it from IAD and EWR and IAH. They obviously feel the market within the Southeast to these cities is saturated enough.
UA clearly doesn't see a market for itself in funneling traffic intra Southeast or to the Caribbean with a hub in RDU or elsewhere in the Southeast that is only going to capture what is mostly price sensitive traffic, resulting in trash yields and doing more harm to themselves than they would to DL or AA. If your goal is a connecting hub, why specifically RDU? Why not BHM? Why not MGM or MCN or CHA? Why not build a hub at Dobbins Air Reserve Base in Marietta, GA? Heck, why not build a whole brand new airport out in otherwise empty farmland somewhere in Central Alabama solely for connecting traffic? If you feel confident your RDU hub-model would work, could you tell us why a BHM or MGM hub set-up to do the same thing wouldn't, especially if such a hub would be even more centrally located for much of the Southeast while still being well-set to capture connecting traffic out of the Northeast to the Caribbean, Texas, or Florida.
That's fine and well but population doesn't mean much if there isn't purchasing power. ATL metro median income is $55,753. RDU metro median income is $73,654. Quite a big difference. Atlanta also has more families while RDU has more single/married but no kids who tend to have more disposable income.
Put simply, Atlanta is the 9th largest metro area in the US and the 11th largest CSA in the US. Raleigh-Durham is 34th and there are plenty of larger cities/CSAs above Raleigh-Durham that do not have hubs serving them for which the similar arguments could be applied that you're trying to argue on why RDU would make an effective hub for shuttling intra-region traffic. In fact, many of them had hubs at one time - cities like CLE (16th largest CSA), STL (22nd largest CSA) and PIT (26th largest) and CVG (32nd largest, and was once a massive hub and is now s sliver of what it once was) - but they are now at best focus cities or merely spokes in the system because a hub-and-spoke model that relies mostly on lower yield connecting traffic isn't profitable. For comparison, CLT sits at 23rd on the list but Charlotte, as noted by Forbes, is now the second largest banking center in the US, behind NYC, in addition to being home to several other Fortune 500 companies along with many other regional HQs for other large companies, in case you're still wondering on one of the key factors in why Charlotte can maintain a sizeable hub and drive revenue premiums off of O&D traffic to help sustain the hub while doing it.
Last edited by ATOBTTR; Feb 3, 2021 at 9:12 am
#75
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I'm not saying it isn't a complex decision. And it's not just southeast traffic flows UA is missing out on. They have a very limited Caribbean presence. Even with MIA, AA has still maintained CLT's Caribbean network. But I'd never have a widget on my tail again if I could fly UA or AS efficiently from MCO. But there is currently no way to fly UA on a routing like MCO-MEM/TYS/BNA/SAV or GCM/SXM/STT.
And no one has given me an answer of why UA still haven't been able to make IAD work after 35 years. They have steadily dropped and added routes, tried TED, and haven't made any improvements to their facilities.
And no one has given me an answer of why UA still haven't been able to make IAD work after 35 years. They have steadily dropped and added routes, tried TED, and haven't made any improvements to their facilities.