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United forced to suspend JFK service due to expiration/lack of slots, end of Oct 2022

United forced to suspend JFK service due to expiration/lack of slots, end of Oct 2022

Old Sep 7, 2022, 3:23 pm
  #46  
 
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I'm about equidistant to EWR and JFK (guess where I live :-) so I don't have a preference but I end up at EWR 9/10 times just given the volume of flights there. But the real head scratcher for me is that I always heard JFK-SFO/LAX was restarted due to corporate preferences for JFK. Okay... but then you put 757s with crappy J seats on these supposedly premium heavy routes?! Those seats may have been competitive 10 years ago but with JetBlue's Mint seats, AA, DL, not to mention United's own Polaris seats, I find it hard to believe that their corporate customers are all of a sudden happy with flying on UA again. Last year, they used to commonly fly 767s out of JFK, and EWR was a mix of 757/777/787. Now, EWR is almost entirely 777 to SFO/LAX, and JFK is pretty much always 757. I get that with the return of travel, they might be short of planes / pilots, but one would expect that the JFK-SFO/LAX routes would be pretty high up on their priority list to get true Polaris cabins to keep their corporate customers happy.
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Old Sep 7, 2022, 3:32 pm
  #47  
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Originally Posted by mraju99
I'm about equidistant to EWR and JFK (guess where I live :-) so I don't have a preference but I end up at EWR 9/10 times just given the volume of flights there. But the real head scratcher for me is that I always heard JFK-SFO/LAX was restarted due to corporate preferences for JFK. Okay... but then you put 757s with crappy J seats on these supposedly premium heavy routes?! Those seats may have been competitive 10 years ago but with JetBlue's Mint seats, AA, DL, not to mention United's own Polaris seats, I find it hard to believe that their corporate customers are all of a sudden happy with flying on UA again. Last year, they used to commonly fly 767s out of JFK, and EWR was a mix of 757/777/787. Now, EWR is almost entirely 777 to SFO/LAX, and JFK is pretty much always 757. I get that with the return of travel, they might be short of planes / pilots, but one would expect that the JFK-SFO/LAX routes would be pretty high up on their priority list to get true Polaris cabins to keep their corporate customers happy.
UA couldn't fill butts with the larger 767 planes.
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Old Sep 7, 2022, 3:49 pm
  #48  
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Originally Posted by EWR764
I think people are missing the boat on this. The phrase "negotiating in the media" comes to mind.

First, UA only was able to re-enter JFK because of slot exemptions occasioned by the pandemic; they never were able to buy or were awarded additional permanent slots. They simply used slots that nominally belong to another carrier that was able to suspend flying as a consequence of the waivers. The current slot exemption is through 10/29/22, the IATA northern summer season. If the FAA does not extend slot waivers another season (all indications are they will not) then United will lose the ability to use those slots unless it contracts with the slotholder.

Second, UA clearly has not been able to source its own slots since resuming JFK service. There has been no incentive for any airline to unload slot holdings at JFK to date, since the exemption has been in place. None of the incumbent carriers with meaningful slot portfolios have been in such dire straits that they needed to sell JFK slots to raise cash. Other carriers that have temporarily suspended service due to the exemption are likely to restart service to preserve their slots. As an aside, I would expect a number of slots to shake loose post-10/29 once the exemption ends and airlines are once again held to usage thresholds to retain slots (e.g., Aeroflot, Norwegian, Interjet, some Chinese carriers), which United should have a chance to secure. It's also unclear which dormant slots United has been using for its 4 daily arrival/departure pairs.

Third, many industry observers expect the DOJ to reach a pre-trial settlement with AA/B6, and it is possible that a settlement will involve a divestiture of assets, including BOS gates, JFK slots/gates and LGA slots/gates. This would allow AA/B6 to preserve their NEA, which it seems extraordinarily committed to. My impression is that AA is willing to give up a great deal to ensure the NEA survives DOJ scrutiny, since without it, their JFK position is in serious jeopardy of enormous losses going forward, some of which would be unavoidable in light of other obligations, including its lease with the PANYNJ and JV with BA. With a September 27 trial date approaching, those discussions are probably underway. United has an interest in making a public argument that the AA/B6 NEA is anticompetitive, with JFK-LAX as an example, and positioning itself as a carrier that would benefit from additional slots at JFK to more effectively compete with AA/B6. The irony here is delicious, of course, but, as the saying goes, "don't hate the player, hate the game."

Fourth, I don't read this at all to be an indication that United is struggling at JFK. Well, they probably are, at least as compared to EWR, but that's beside the point. Perhaps it's better to say that United isn't threatening to pull out of JFK because it is struggling. The argument in favor of keeping JFK service from LAX/SFO in 2015 was chiefly that high value (including longtime managed United corporate contract) traffic originating at West Coast points of sale inbound to New York exhibited a clear preference for JFK over EWR. Once UA obtained the use of JFK slots and restarted LAX/SFO service a year into the pandemic, with 767s, it was obvious that P&L on the individual JFK segments didn't matter. United believes it needs to be in the market. It isn't going to pull out of JFK unless it has absolutely no other choice... meaning, no slots. To obtain them, and "restore competitive balance" , it is either asking the FAA to create more slots, or take them from the "anti-competitive" AA/B6 agreement.

No doubt a lot of horse trading is going on behind the scenes here. It will be interesting to watch over the next few weeks.

One more note: it is true that UA traded its JFK slots to Delta in return for additional EWR slots in 2015. The next year, the FAA brought EWR down to a Level 2 airport, so those EWR slots United "traded for" from Delta went away. But, United still technically holds 12 slot pairs, leased to Delta. At some point that lease will be up for renewal, an option United may decline if it is able to, but for now those slots are basically untouchable for United operations.
Ssshhh. Folks weren't supposed to know that UA/Kirby was really trying to do...

David
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Old Sep 7, 2022, 3:50 pm
  #49  
 
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Originally Posted by Repooc17
UA couldn't fill butts with the larger 767 planes.
*premium butts. Corporate travel on the West Coast has lagged the rest of the country, but Y demand is always strong.

76Ls were only on the JFK transcons because, at the time, there weren't many other options to fly them. This summer, they've been almost entirely deployed to Europe, as intended.

In the future, this would probably be a niche product for the 737-MAX10 or A321 (either/or, with premium seats).

Last edited by EWR764; Sep 7, 2022 at 3:56 pm
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Old Sep 7, 2022, 3:53 pm
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Im not sure why people are being so harsh on Kirby for this. Hes pretty much admitted in other outlets earlier that it was a mistake for Smisek and team to leave JFK. If he cant buy slots at a reasonable price, this seems like a reasonable public relations strategy to try and retain slots.

The fact that the FAA removed the slot controls on EWR less than a year after the swap with DL shows just how stupid and clueless the old management team was. They should have had a better pulse on how the FAA viewed one of their most valuable hubs.
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Old Sep 7, 2022, 4:52 pm
  #51  
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Originally Posted by PsiFighter37
Im not sure why people are being so harsh on Kirby for this. Hes pretty much admitted in other outlets earlier that it was a mistake for Smisek and team to leave JFK. If he cant buy slots at a reasonable price, this seems like a reasonable public relations strategy to try and retain slots.

The fact that the FAA removed the slot controls on EWR less than a year after the swap with DL shows just how stupid and clueless the old management team was. They should have had a better pulse on how the FAA viewed one of their most valuable hubs.
Or the clear delusion that they actually knew what was going on at their fortress hub.

David
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Old Sep 7, 2022, 5:20 pm
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Originally Posted by DELee
Or the clear delusion that they actually knew what was going on at their fortress hub.

David
I have zero sympathy for UA. I say that as a UA fanboy, much like a company I worked for and told to walk away from certain markets despite my success. Shame on UA for making a mistake, but shame on UA hoping the FAA can help.
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Old Sep 7, 2022, 5:50 pm
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Its confusing UA said it was a mistake to pull out if JFK now threatening to pull out again. EWR is their hub what do they want to add at JFK.
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Old Sep 7, 2022, 6:03 pm
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Originally Posted by buckeyefanflyer
Its confusing UA said it was a mistake to pull out if JFK now threatening to pull out again.
The current "threat" to pull out isn't so much a threat as much as it is going to be the reality if they don't get slots. The slots they have been using are held by other airlines that have been going unutilized due to the pandemic. Those slots, as of now, won't be available for them beyond the end of October. If they're going to try to get additional slots allocated, then might as well push for it to be more than their current allocation so they can serve some of the other destinations their JFK-preferring customers want.
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Old Sep 7, 2022, 6:44 pm
  #55  
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Exactly who is being threatened by United?

If you guys don't give us more slots, we're going to leave... again!!!
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Old Sep 7, 2022, 7:11 pm
  #56  
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Originally Posted by Lux Flyer
The current "threat" to pull out isn't so much a threat as much as it is going to be the reality if they don't get slots. The slots they have been using are held by other airlines that have been going unutilized due to the pandemic. Those slots, as of now, won't be available for them beyond the end of October. If they're going to try to get additional slots allocated, then might as well push for it to be more than their current allocation so they can serve some of the other destinations their JFK-preferring customers want.
How many slots are we talking about UA can compete for? If we are talking about anything in single digits, then UA might as well just pull out (again). You need to go big or go home at JFK.
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Old Sep 7, 2022, 7:22 pm
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Originally Posted by Repooc17
How many slots are we talking about UA can compete for? If we are talking about anything in single digits, then UA might as well just pull out (again). You need to go big or go home at JFK.
I'm sure UA would take whatever it can get. But the ballpark of the pre-2015 schedule of 5-6x LAX and 6-7x SFO is probably the minimum "competitive" schedule with departures in both directions throughout the day.
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Old Sep 7, 2022, 7:37 pm
  #58  
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A source tells me Kirby recently told employees he wants 10x daily from both LAX and SFO. That would be going big
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Old Sep 7, 2022, 8:05 pm
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If the JFK slot waiver expires, does UA even have the choice to stay? if no slot owner is willing to lease or transfer slots to UA? isn't that end of story?

Suspect some slot owners would either be happy to see UA leave ?
how many / who would be willing to relinquish the desired number of RT slots (probably at least 10, possible perhaps 20 as mentioned earlier)?
Would too high of costs make this prohibitive?

The previous management, exiting from JFK and long term leasing their slots, has left the present management in a bind
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Old Sep 8, 2022, 12:42 am
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If they really wanted slots, couldn't they just pay....more money to an existing slot owner?

I feel like the real headline should be that UA doesn't want to pay what the market will bear for some JFK slots.
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