WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,721
WN has a higher passenger share of the LOCAL market than UA. Even though UA boards more passengers overall because it is a hub, WN carries more of the local market.
And that is precisely the problem. UA is running a hub up against a carrier that carries more of the local market than UA. The economics of carrying connecting passengers on RJs while competing against a low cost carrier who has a higher share of the local market don't work.
That same problem exists across UA's network. It is using RJs to push connecting traffic thru hubs that have significant competition in the local market. UA is having to compete for passengers at much higher costs than other carriers in other hubs and doesn't gain the revenue necessary to support its hubs.
As for AA and JFK, whether AA calls it a hub or focus city doesn't matter. What does matter is that there is no evidence of a carrier operating a competitive operation at an airport competitive with other carriers who have much larger hubs. In most non-hub cities that are in other carrier hubs, such as ATL for AA, AA's flights are to/from AA hubs. But JFK doesn't work that way. AA's flights are not largely to its hubs and are in markets competitive with other carriers that not only serve those markets but much more.
AA's ability to maintain an operation that is significantly smaller than other carriers who have larger hubs is very difficult.
You need only look at what US was at one time at LGA to see how a focus city/niche carrier strategy doesn't work in a large highly competitive market against other carrier hubs.
The difference with LAX is that no carrier is dominant and can't be because of the lack of gates or growth potential. AA, DL, UA, and WN are all within a few percent in terms of size in the local market.
And that is precisely the problem. UA is running a hub up against a carrier that carries more of the local market than UA. The economics of carrying connecting passengers on RJs while competing against a low cost carrier who has a higher share of the local market don't work.
That same problem exists across UA's network. It is using RJs to push connecting traffic thru hubs that have significant competition in the local market. UA is having to compete for passengers at much higher costs than other carriers in other hubs and doesn't gain the revenue necessary to support its hubs.
As for AA and JFK, whether AA calls it a hub or focus city doesn't matter. What does matter is that there is no evidence of a carrier operating a competitive operation at an airport competitive with other carriers who have much larger hubs. In most non-hub cities that are in other carrier hubs, such as ATL for AA, AA's flights are to/from AA hubs. But JFK doesn't work that way. AA's flights are not largely to its hubs and are in markets competitive with other carriers that not only serve those markets but much more.
AA's ability to maintain an operation that is significantly smaller than other carriers who have larger hubs is very difficult.
You need only look at what US was at one time at LGA to see how a focus city/niche carrier strategy doesn't work in a large highly competitive market against other carrier hubs.
The difference with LAX is that no carrier is dominant and can't be because of the lack of gates or growth potential. AA, DL, UA, and WN are all within a few percent in terms of size in the local market.
