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Could the Coronavirus be UA’s opportunity to get back to JFK?

Could the Coronavirus be UA’s opportunity to get back to JFK?

Old May 5, 20, 4:11 pm
  #1  
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Could the Coronavirus be UA’s opportunity to get back to JFK?

Obviously all the airlines have been hurting, but if an airline like AA or even DL has significant cutbacks at JFK, is there a once in a lifetime opportunity to get back to JFK? Scott Kirby himself admitted $misek was foolish for dumping it in 2015. The premium transcon market is in the toilet now, but if slots were to become available is it prudent for UAL to acquire them for future use?
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Old May 5, 20, 4:12 pm
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Could it? Sure.

Should it? Probably not.
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Old May 5, 20, 4:34 pm
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I say no way. They exited JFK years ago, why on earth would they return? As much as I hate every square inch of the EWR hell-hole, that choice has been made.
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Old May 5, 20, 5:12 pm
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I don’t think UA has the money to think about that given the current burn rate. If things stabilize and other airlines bail, it wouldn’t be the worst idea. But the route itself (particularly to JFK) seems highly predicated on business demand - who knows how long it takes to come back. I also doubt UA wants to put capex into new space at this time either, if they hit pause on the Polaris Lounge at IAD (which was nearly done).
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Old May 5, 20, 6:50 pm
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Never.

NYC, by itself, constitutes almost 15% of all the confirmed cases nationwide. That number does not reflect the severity of the tri-state area. Practically, NYC just experienced another 9/11, but more deadly.

In this case, why would an airline re-invest to a location that it has previously abandoned?
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Old May 5, 20, 6:54 pm
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Originally Posted by garykung View Post
In this case, why would an airline re-invest to a location that it has previously abandoned?
Because NYC isn't going to completely die nor even be shut down indefinitely.

Look beyond the immediate now and figure if it is worth UA (or anyone else that survives) trying to pick up the pieces of those that fail. That's what's at question here.
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Old May 5, 20, 6:56 pm
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not a chance. EWR-SFO/LAX has been super successful for UA. All the other domestic itineraries they can serve from LGA. Other than connecting to *A carriers at JFK it never made much sense.
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Old May 5, 20, 7:08 pm
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Originally Posted by cfischer View Post
not a chance. EWR-SFO/LAX has been super successful for UA. All the other domestic itineraries they can serve from LGA. Other than connecting to *A carriers at JFK it never made much sense.
I think the cachet is to fly into an NYC airport. LGA has the perimeter rule, so forget about TCON flights. Rightly or wrongly, a lot of folks do not associate EWR with NYC (even though it is arguably easier to get to Manhattan from it vs. JFK). The ship has sailed, though, and any revisiting of the decision, if UA makes it, won't be for years, if even this decade.
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Old May 5, 20, 7:14 pm
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Let me preface this with the fact that I never say never... but as I type it out it seems more unlikely with every keystroke.

Hypothetically, it could be possible that they pick up some slots for certain markets that their corporate clients demand. Remember that UA used to have all of Disney's business... until they left JFK. So they might pick up slots from AA/DL/AS/B6 for certain key hubs that either have high corporate/premium demand (LAX, SFO) or are in-demand for connections off of partners (ORD, IAD, I guess?). The issue then becomes the high fixed costs associated with operating a station with service 16 hours a day, and premium passengers are interested in expensive lounges, and even which terminal could they get space in (Likely T7, but T1 isn't off the table if DY or another carrier there goes kaput, and in T1 they could use the LH lounge). If it lets them pick up multiple $50M+/year clients, they might do it.

I bet UA can capitalize on its extremely strong point of sale in SFO in a way that AA/DL/B6 have not (supposedly JFKLAX is more profitable than JFKSFO for all 3), but EWR gives them everything they need right now, with the added benefit that it's cheaper. So it really depends on whether they have a corporate customer that they can't afford to lose (anyone with satellite offices in Queens?)
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Old May 6, 20, 2:21 am
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It seems like they’re starting to replicate the “mistake” they regret from JFK at LAX now. Considering they’re cutting international routes from LAX in favor of their SFO hub. With that being their current mindset, I can’t imagine them going back to JFK with their dominance at EWR.
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Old May 6, 20, 3:31 am
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Originally Posted by sbm12 View Post
Because NYC isn't going to completely die nor even be shut down indefinitely.

Look beyond the immediate now and figure if it is worth UA (or anyone else that survives) trying to pick up the pieces of those that fail. That's what's at question here.
Still no, given future travel can be seriously impacted.
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Old May 6, 20, 6:11 am
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Originally Posted by garykung View Post
NYC, by itself, constitutes almost 15% of all the confirmed cases nationwide.
Silly basis for long-term planning, but even so, NYC cases are falling right now. You want to isolate a market for COVID surges? Cut off MSY, DTW, ORD, and maybe all of Texas. Point is, all current data is the shortest of short term.

Originally Posted by garykung
In this case, why would an airline re-invest to a location that it has previously abandoned?
Airlines do it regularly as market assessments change.

But just because JFK will see fewer movements for the next few years, and just because UA regrets leaving, doesn't mean it has the vision or wherewithal to return. A surviving, smaller airline will emphasize SFO, EWR, and IAH.
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Old May 6, 20, 8:29 am
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Originally Posted by VFR View Post
Hypothetically, it could be possible that they pick up some slots for certain markets that their corporate clients demand. Remember that UA used to have all of Disney's business... until they left JFK. So they might pick up slots from AA/DL/AS/B6 for certain key hubs that either have high corporate/premium demand (LAX, SFO) or are in-demand for connections off of partners (ORD, IAD, I guess?). The issue then becomes the high fixed costs associated with operating a station with service 16 hours a day, and premium passengers are interested in expensive lounges, and even which terminal could they get space in (Likely T7, but T1 isn't off the table if DY or another carrier there goes kaput, and in T1 they could use the LH lounge). If it lets them pick up multiple $50M+/year clients, they might do it.
This is asssuming corporate travel picks back up anytime in the near future. And also why would UA be better positioned to pick up these contracts, instead of the current contract holder? Is UA uniquely positioned to come out of this situation financially better than DL or AA (AA, yes, DL probably not)? Even though UA is telling people to expect massive layoffs come October 1st, so they aren't expecting to be in a finacially healthy spot after this.
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Old May 6, 20, 8:43 am
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Originally Posted by cfischer View Post
not a chance. EWR-SFO/LAX has been super successful for UA. All the other domestic itineraries they can serve from LGA. Other than connecting to *A carriers at JFK it never made much sense.
Exactly right. And if anyone is being actually fair, folks from Manhattan that have actually tried connecting to EWR almost universally admit it's faster and more convenient from midtown than JFK.

It's not that UA can't move into JFK ... it's "why would they?" Makes no operational sense whatsoever.

Originally Posted by garykung View Post
That number does not reflect the severity of the tri-state area. Practically, NYC just experienced another 9/11, but more deadly.
Orders of magnitude more deadly.

Here in NJ, we lost 704 of our own in the 9/11 attacks. Horrific.
As of yesterday, we've lost more than 8,200 to COVID-19.

For those outside the NY area, I know it's not as hard hit, and please be grateful for that. Here, it's a very tough time. Everyone here is - at most - a degree of separation from someone who's passed from this thing. Not sick, not had the sniffles, but gone.
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Old May 6, 20, 8:44 am
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Unless UA invests a bit more in their product, they don't really have the ability to compete with B6, DL, or AA at JFK. All three of the aforementioned airlines offer better products on this route at the moment (AA offering F, otherwise their J is essentially the same as UA's).
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