Should UA develop new hubs/focus cities?

Old Jun 12, 19, 8:38 am
  #106  
 
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Originally Posted by jpezaris View Post
Not only that --- Because of the irregular nature of the traffic around both AUS and IAH, it isn't a set 4 hours, either, but can vary considerably. (The same is true between Baltimore and JFK.) Uncertainty isn't good for travel planning.
I will admit that I was frustratingly late — to the point that the plane started boarding while I was in the security line — the last time I drove from Austin to IAH, but it definitely didn’t take four hours.

Originally Posted by Kmxu View Post
What is the definition of a focus city? I guess that it serves O/D traffic from this city to nearby cities. With this said, AUS can be a focus city if it offers nonstop flights to nearby TX cities and a few cities around TX, even though IAH can offer a lot of more connecting flights to these same cities. AUS may become a focus city if UA can make money. With this definition, DCA is just a focus city for AA, as discussed previously.
Just my two cents.
Well, in order to build a focus city at AUS, they’d either need new capacity or they’d need to shift capacity from elsewhere. And, because AUS already has excellent connectivity, they’d likely be competing with somebody head-to-head on the new routes, meaning their ability to extract a nonstop premium is fairly small. (People who want the nonstop badly enough will already drive to Houston).

I mean — what routes would you want them to fly? MAF-AUS is probably the largest intra-Texas market where they wouldn’t have head-to-head competition. OKC-AUS is available now that ViaAir stopped all flights.

I’d be thrilled with more nonstop options from AUS, but I just don’t see how it helps UA any to offer them.
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Old Jun 12, 19, 9:20 am
  #107  
 
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As far as the Southeast goes, TPA and MCO (arguably) have the potential to have hub-like capacity with the right investment.

CVG and MEM maybe as well, but less so.
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Old Jun 12, 19, 10:49 am
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One a broader scale, UA's narrow focus to generate as much international traffic as possible ultimately left them as the #3 or often #4 carrier in the vast majority of their non-hub cities/airports. That presents quite an uphill climb if they want to markedly improve their position in any of these places.
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Old Jun 12, 19, 11:39 am
  #109  
 
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Originally Posted by fly18725 View Post
Umm, I don't think anyone was talking about the economics of the city or MSA, but rather the economics of the hub itself.

Specifically, SFO generates more, higher yielding O&D traffic. Therefore, it is economically superior as a hub to other hubs that have less O&D traffic or lower yields, e.g. DTW. Therefore, an airline would be stupid to not "trade" a hub in DTW for a hub in SFO. Of course, this is a dumb argument (that is becoming circular) because we're past a point where airlines would trade hubs.
The original poster made a claim about the cities themselves not the airports, so that's what I addressed.

I am curious, do you have any data to show that SFO as a hub generates higher margins than DTW as a hub? Not trying to be sarcastic, genuinely curious. The source I have, which is slightly out of date shows otherwise in terms of O&D yield.


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Old Jun 12, 19, 11:58 am
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I'm not an expert on airline financials, but shouldn't there be some kind of stage length adjustment? Short stage length has higher CASM.
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Old Jun 12, 19, 12:41 pm
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Originally Posted by findark View Post
I'm not an expert on airline financials, but shouldn't there be some kind of stage length adjustment? Short stage length has higher CASM.
Cost numbers by hub are much more difficult to calculate, that is why I asked if they had any information on margins specifically, since they said SFO was an economically superior hub.
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Old Jun 12, 19, 12:58 pm
  #112  
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Originally Posted by MIDWESTERNFLYER View Post
...And, just because a city that a hub is in is superior economically, doesn't mean an airline would trade one of their hubs to be in that location.
This thread is about airports

Any airline management that would trade a superior economic airport / hub / focus for a inferior economic airport / hub / focus is going to have issues with its shareholders (unless it has a grant plan for changing that situation). Additionally such trades are not in the realm of possibilities or speculation.

The question in this thread is if and where should UA hubs (unlikely IMO) or focus city airports.
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Old Jun 12, 19, 1:03 pm
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Originally Posted by jsloan View Post
San Antonio is larger than Austin, but AUS carries much more traffic than SAT and recently expanded.

That said, I don't see the value for UA in having ether AUS or SAT as focus cities when they have a hub within driving distance.
So interesting backstory regarding SAT and pmUA trying to make it a focus city. This was in the 2005 timeframe well before the UA/CO merger was in the works.

Trans States approached UA with a proposal to launch several nonstop markets from SAT. At that time there were a considerable amount of conventions being moved to SAT while MSY will still reeling from the effects of Hurricane Katrina. The nonstop routes were ones that at that time weren't served nonstop, but WN carried the majority of the traffic. The thought was that by offering 1-2 nonstop flights/day in these markets, people would pay a slight premium over WN for the convenience of a nonstop, it would capture the people who ordinarily flew UA for their larger network reach but were forced to fly OAL because UA lacked market presence, and it would be a low-risk opportunity for UA to gain a presence in a region they didn't already have coverage because Trans States would operate under an at-risk agreement where they be responsible for the costs of the operation (and subsequently collect the revenue) but UA would market and sell the tickets.

Despite the offer of nonstops, UA wasn't able to capture the market share from WN mainly because UA didn't advertise the operation well enough, some of the convention surge died off, and also the reality that WN connectivity didn't add a considerable amount of extra flying time and there were a larger number of flights into/out of MSY that people had an option of choosing.
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Old Jun 12, 19, 1:29 pm
  #114  
 
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Originally Posted by WineCountryUA View Post
This thread is about airports

Any airline management that would trade a superior economic airport / hub / focus for a inferior economic airport / hub / focus is going to have issues with its shareholders (unless it has a grant plan for changing that situation). Additionally such trades are not in the realm of possibilities or speculation.

The question in this thread is if and where should UA hubs (unlikely IMO) or focus city airports.
You are confused because you joined this discussion mid-way through:

A poster named spin88 originally said: "UA has the best hub locations by far of the US3, in larger cities than its competitors"

I refuted that claim and that is how this conversation involving cities started, and then you and a few other posters joined in not knowing the full context of what was being discussed.

To your next point, I don't know why you are lecturing me about "trading" airports? I was the one who said it was a terrible idea, in fact I had a multiple paragraph monologue about how it was a bad idea, after multiple posters disagreed with me.

Please read the discussion, so you are addressing your posts to the right people
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Old Jun 12, 19, 2:31 pm
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Originally Posted by MIDWESTERNFLYER View Post
You are confused because you joined this discussion mid-way through:

A poster named spin88 originally said: "UA has the best hub locations by far of the US3, in larger cities than its competitors"

I refuted that claim and that is how this conversation involving cities started, and then you and a few other posters joined in not knowing the full context of what was being discussed.

To your next point, I don't know why you are lecturing me about "trading" airports? I was the one who said it was a terrible idea, in fact I had a multiple paragraph monologue about how it was a bad idea, after multiple posters disagreed with me.

Please read the discussion, so you are addressing your posts to the right people
I agree it's a fair question what is the margin of DTW / profit contribution.

A low landing cost hub with large corporate O&D spend (auto in DTW's case) and little competition can be very attractive even if it's not a world money center with premium cabin demand. CLT and ATL are the extreme examples. Big coach yields make big profits this cycle at least.
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Old Jun 12, 19, 4:54 pm
  #116  
 
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Seems that the goalposts are moving in a rather circular argument, totally tangential to this thread...
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Old Jun 12, 19, 5:19 pm
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With constant conventions and vacation traffic, I've thought UA should pursue flights between LAS and competitor hubs or larger cities.
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Old Jun 12, 19, 5:44 pm
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Originally Posted by atword View Post
With constant conventions and vacation traffic, I've thought UA should pursue flights between LAS and competitor hubs or larger cities.
That seems to be what DL is doing although they don't call it a focus city surprisingly. Just flew SAN-LAS this weekend on DL.
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Old Jun 12, 19, 5:53 pm
  #119  
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Maybe not the be-all/end-all, but UA has less hubs/focus cities than DL or AA. While
Many of UA’s hubs are in prime cities, the lesser quantity surely means that their geographic reach isn’t as great or is suboptimal - clearly most evident with the hole in the Southeast. Additionally, their most prominent hubs (EWR and SFO) go sideways when the weather gets bad - and both are limited by geography from ever contemplating expansion.
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Old Jun 12, 19, 10:02 pm
  #120  
 
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+1 on HNL. Offer nonstops to SE Asia/Australia and add more HNL-mainland flights to high revenue markets.
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