"United to throttle down in Houston even as profits soar" - Houston Chronicle
Jan 25, 2016, 12:55 pm
#1
Original Poster
Join Date: Aug 2013
Posts: 38
"United to throttle down in Houston even as profits soar" - Houston Chronicle
Saw on A.net that there was a discussion about this article (paywall): http://www.houstonchronicle.com/news...as-6775660.php
Basically states that IAH will no longer see the planned growth it was originally marked for. Instead it will just see flat growth.
With that in mind, it still might make sense for UA to cut some frequency routes. Are there any routes that come to mind?
There was a lot of discussion about MUC and ISN mostly. ISN makes sense, but MUC not so much. That flight is usually pretty well traveled, not sure about cargo though.
Basically states that IAH will no longer see the planned growth it was originally marked for. Instead it will just see flat growth.
With that in mind, it still might make sense for UA to cut some frequency routes. Are there any routes that come to mind?
There was a lot of discussion about MUC and ISN mostly. ISN makes sense, but MUC not so much. That flight is usually pretty well traveled, not sure about cargo though.
Jan 25, 2016, 2:32 pm
#2
Join Date: Feb 2011
Location: Washington D.C. via Sao Paulo via Houston via Washington D.C. via Boston via New York
Posts: 1,172
Oil and gas market is down at the moment and that's what Houston is built on, that combined with Southwest making Hobby a viable option for LCC travel, United is getting pissy about it and have been very vocal about the Hobby expansion.
Jan 25, 2016, 2:37 pm
#3
Join Date: Oct 2009
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Oil and Gas Companies here in Houston are downsizing and economizing like crazy. Not surprised that this is hitting Airline Travel out of IAH. Almost every week there are articles about lay-offs and I expect the small fry to start folding soon too.
Jan 25, 2016, 3:24 pm
#4
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Saw on A.net that there was a discussion about this article (paywall): http://www.houstonchronicle.com/news...as-6775660.php
Basically states that IAH will no longer see the planned growth it was originally marked for. Instead it will just see flat growth.
With that in mind, it still might make sense for UA to cut some frequency routes. Are there any routes that come to mind?
There was a lot of discussion about MUC and ISN mostly. ISN makes sense, but MUC not so much. That flight is usually pretty well traveled, not sure about cargo though.
Basically states that IAH will no longer see the planned growth it was originally marked for. Instead it will just see flat growth.
With that in mind, it still might make sense for UA to cut some frequency routes. Are there any routes that come to mind?
There was a lot of discussion about MUC and ISN mostly. ISN makes sense, but MUC not so much. That flight is usually pretty well traveled, not sure about cargo though.
If UA is looking to shift some capacity, send it up to CLE!
Jan 25, 2016, 3:27 pm
#5
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Posts: 69,232
The challenge will be maintaining flat capacity while the 50-seat planes are dropping out of the fleet. This generally means route or frequency cuts even when total capacity is ticking up only a small amount. Holding it flat means there will almost certainly be cuts around the hub.
Jan 25, 2016, 3:34 pm
#6
Join Date: Mar 2013
Posts: 18
The challenge will be maintaining flat capacity while the 50-seat planes are dropping out of the fleet. This generally means route or frequency cuts even when total capacity is ticking up only a small amount. Holding it flat means there will almost certainly be cuts around the hub.
Jan 25, 2016, 4:47 pm
#8
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The O&G fraction of the Texas economy is showing stress-Halliburton announced shedding another 4K jobs. Judging from anecdotal stories, primarily real estate, starting to spill over into other sectors. I was not surprised when execs at the previous quarterly telecon expressed surprise at the disappearance of the HVF oilman. Reminded me that the merged entity is no longer a Houston based enterprise.
Jan 26, 2016, 8:49 pm
#9
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I'd be surprised to see MUC go away... Lots of connecting traffic.
Jan 26, 2016, 8:57 pm
#10
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Article clip:
"For Jack Stelzer, a retired Houston-based airline consultant and senior airline executive, United's announcement sparked some unease. He said he wishes United would invest more in the city and add international routes instead of ceding ground to foreign carriers that have entered the market the last couple of years.
"'I'd be somewhat concerned about how United seems to be backing away from Houston in small steps while other carriers are coming into Houston,' he said."
Isn't that the whole United story since the merger, in one market after another? When are they going to fight for market share, or try to stimulate traffic, instead of reflexively "ceding ground"?
"For Jack Stelzer, a retired Houston-based airline consultant and senior airline executive, United's announcement sparked some unease. He said he wishes United would invest more in the city and add international routes instead of ceding ground to foreign carriers that have entered the market the last couple of years.
"'I'd be somewhat concerned about how United seems to be backing away from Houston in small steps while other carriers are coming into Houston,' he said."
Isn't that the whole United story since the merger, in one market after another? When are they going to fight for market share, or try to stimulate traffic, instead of reflexively "ceding ground"?
Jan 26, 2016, 9:15 pm
#11
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It's not the first time Houston has seen its economy decline due to low oil prices and it won't be the last either. Oil & gas is notorious for its boom and bust business cycles.
UA is just reacting to the fluctuations in the economy and I have no doubt that contractions in seat capacity are all but inevitable. No reason to think that the sky is falling however.
If they're smart they'll take the opportunity to diversify their operations and spread the fleet around the other hubs though. Record low oil prices all but guarantee increased profit margins for all carriers in the next few years.
UA is just reacting to the fluctuations in the economy and I have no doubt that contractions in seat capacity are all but inevitable. No reason to think that the sky is falling however.
If they're smart they'll take the opportunity to diversify their operations and spread the fleet around the other hubs though. Record low oil prices all but guarantee increased profit margins for all carriers in the next few years.
Jan 27, 2016, 6:44 am
#12
Join Date: Jun 2014
Posts: 117
The O&G fraction of the Texas economy is showing stress-Halliburton announced shedding another 4K jobs. Judging from anecdotal stories, primarily real estate, starting to spill over into other sectors. I was not surprised when execs at the previous quarterly telecon expressed surprise at the disappearance of the HVF oilman. Reminded me that the merged entity is no longer a Houston based enterprise.
Jan 27, 2016, 7:37 am
#13
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The challenge will be maintaining flat capacity while the 50-seat planes are dropping out of the fleet. This generally means route or frequency cuts even when total capacity is ticking up only a small amount. Holding it flat means there will almost certainly be cuts around the hub.
Feb 27, 2016, 7:43 pm
#14
Join Date: Dec 2015
Posts: 49
Houston is not as hitched to O&G as it was in the 80s. You have substantial Healthcare, finance, and tech footprints here now which would soften the blow.
Meanwhile Southwest is doing very well out of HOU and other carriers are increasing their flights to IAH. I think I read recently ANZ is moving their AKL/IAH route to a 787? and going from 3 to 5 weekly.
Meanwhile Southwest is doing very well out of HOU and other carriers are increasing their flights to IAH. I think I read recently ANZ is moving their AKL/IAH route to a 787? and going from 3 to 5 weekly.
Feb 28, 2016, 1:55 am
#15
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Southwest is not the LCC that it used to be although that is how it is still perceived by many. Virtually every time I have compared UA to SW, SW is the exact same price and sometimes even more than UA for markets served nonstop by both airlines out of houston.