Hubs, route structure, etc

[EMBFA]

Regardless of who runs the show...

The only other possible hub in the Southeast, CLT, where UA has minimal presence and US is the only real competitior to DL's mega ATL, is not going anywhere. Anyone who says otherwise is a moron.

Headquarters would likely remain in ORD. Training centers in ORD DEN PHX and CLT may be maintained due to sheer size of the airline.

All PIT and PHX operations centers etc will be gone.

LAS, done. No need for a low yield leisure hub, unless they want to continue the nighttime hub idea for aircraft utilization. In these times though the planes may be better off on the ground.

PHX and DEN and PHL and IAD are the two tricky ones. One of each will become an O&D focus city while the other remains a connecting hub.

If able to do so, I'd keep DCA and IAD as a high O&D dual presence- Shuttle and east markets from DCA, transcon and international from IAD. PHL's geography and more established routes are better for a Northeast connecting hub, with larger aircraft and less frequency. Parking the massive amount of rat jets clogging up the corridor will be a huge help. Making better use of LGA and BOS slots with larger aircraft and more important destinations would help also.

DEN and PHX is a toughie too. PHX is infested by WN while DEN has weakened F9. DEN is better located as a hub and a much better facility.

The question of Express carriers is interesting too, as that's where most of the capacity reduction will and should come from...

Piedmont (owned by US Airways)
PSA (owned US Airways)
Air Wisconsin (US)
Mesa/Freedom/Air Midwest (US and UA)
Chautauqua/Republic/Shuttle America (US and UA)
Colgan Air (US and UA)
Trans States Airlines/GoJet (US and UA)
SkyWest (UA)

UAL's AFA scope clause does not permit owned flying to be done by flight attendants not on the seniority list, so I wonder how the wholly owned F/As would be handled. A smart AFA would integrate them and tighten the scope clause to all aircraft over 50 seats be flown by mainline list... that would ensure no layoffs and keep a much larger workforce with a better quality of life.

Reductions in ground staff at affected hubs are likely, but I don't think there will be huge reductions in mainline flying, at least not to the degree US Airways east employees saw when almost 50% of some work groups were laid off.

I'm just speculating as to what makes sense, not sticking my tongue out at a percieved enemy like some of the above posts... Keep in mind some pieces could be sold to others. Also keep in mind nothing has been announced yet.

 

[gaucho99]

What are the chances the headquarters could be placed in Tempe? I'm assuming ord would be the logical choice, but are there any arguments to make it in Arizona? Lower costs? Tax benefits? I'm just brainstorming. Are there any valid reasons for headquarters to be in Tempe?

 

[Pacemaker]

Here's a link showing top domestic O & D markets (pax, not yield)

http://www.orlandoairports.net/reports/ran...&d_rank.htm

2006 data, but you get the picture. CLT's not even in the top 30. ATL is #5. (interestingly, LAS was #1)

 

[RowUnderDCA]

Thanks for breaking this out.

Everytime the possibility of a UA/US combo comes up, I get confused. I just don't see how the domestic systems mesh well.

It seems to me to be almost a good of a recipe for capacity reduction as DL/US.

My sense is that airline executives just don't really think that domestic operations and systems matter much anymore, because the economics are so bad. I'm not convinced that Feds think that way yet.

I'm not sure that I think that disregarding efficient domestic aircraft utilization and yield-enhancing market breadth is a good idea going forward.

It does seem to me that the only places that US helps UA domestically is SE coverage (CLT) and NE biz markets (DCA/LGA/BOS).

PHL/IAD/DCA/CLT does create concerns for the Feds, especially IAD/DCA.

Eventually, I think that cost considerations of running both PHL and IAD are going to cause the demise of one or the other. It would seem that the Feds couldn't have much of any problem integrating UA and US if UA simply trades in most of its east coast operation for US's east coast operation, operating IAD as a Star Alliance hub, focusing on Star partners operations and providing only the most demanded connections. But on the other hand, especially if consolidation is not over after UA/US, the combined carrier might be interested in operating a NYC hub and IAD and not bother with PHL at all. And on top of all that, PHL is going to have some massive airfield reconfig projects (is UA's concourse going to be re-built at IAD, too).

All this makes me think that anything could happen.

I agree most with EMB about the solution that I'd prefer as a result of all this consolidation: wipe the rjs out of congested skies and airfields. But to do that, you need more narrowbody, main-line craft; the ability to reject RJ contracts; and the ability to shift and alter resources (express gates to mainline gates).

So, I don't share the notion that the JP Morgan has provided that a UA/US combo would be relatively easy.

I have no idea what to do with the west, except to upgauge aircraft at SFO and LAX, I suppose.

 

[smoot4208]

Charlotte, Chicago, San Francisco aren't going anywhere. Those are not arguable. The rest we will soon find out. According to the Charlotte Observer, IAD/DCA both could stay due to US reduction in BWI which it says contributed to the monopoly. My take is that LAS is done, PHX is done(due to lowcost competition) and either IAD/DCA. IAD may depend on whether US is able to get more INTL gates in PHL. Like I said SFO, ORD, and CLT aren't going anywhere so don't even try to rationalize them being slashed.

 

[phllax]

If this happens, I bet IAD will remain with reduced domestic presence. Yields at DCA are pretty good considering the lack of competition due to slots.

Remember, PHL is the largest MSA in the country with a single airport. UA is down to 4 gates, plus handling AC at a 5th. Either move AA or the combined DL/NW from A to D and voila, more international gates!

 

[BuffaloJoe]

Not gonna move UA out of Term D without a BIG fight. UA installed its own in ground fuel lines there. Not giving them up without getting a good buck, if at all.

 

[sharktooth]

Charlotte, Chicago, San Francisco aren't going anywhere. Those are not arguable.

Charlotte seems the worst, its proximity to ATL, it really is too far north to properly serve the Caribbean. It is kinda half way to nothing.

If one wants a goad to DAL and their ATL hub, then keep CLT, but it really does not work for Caribbean destinations, at all. MCO would be far more advantageous to US. Other than BMW and the occasional NASCAR bent-metal fest, CLT really has no industry, to speak of.

 

[whlinder]

Speaking of DCA slots, doesn't US lease a good number of slots from NW? How long are those leases for? Just wondering what would happen if NW/DL, with DL's #2 presence at DCA, decided to break the slot leases or not renew them in an attempt at overtaking US at DCA.

 

[ClueByFour]

All PIT and PHX operations centers etc will be gone.

Not without about a $50 million payout to PA, the former won't.

 

[LD3]

Here's a link showing top domestic O & D markets (pax, not yield)

http://www.orlandoairports.net/reports/ran...&d_rank.htm

2006 data, but you get the picture. CLT's not even in the top 30. ATL is #5. (interestingly, LAS was #1)

What other airport can US move a pax thru for $1.27? That is the per pax charge in CLT, maybe the low cost offsets the lower O&D numbers. That per pax cost number came directly from the AD's office....

 

[Travelpro72]

Not without about a $50 million payout to PA, the former won't.

You got that right. Considering the history and well just working with Usairways in general PA and Pittsburgh have their hoonies covered this time.

 

[CLT-Douglas]

The outcome of PIT's hub due to it's high costs for US Airways was certainly evident when combined with it's O&D stats. PHL's costs per enplaned passenger (CEP) is $8.19, IAD's CEP will approach $22.00 in 2009. If both IAD and PHL have comparable O&D stats, and lowering costs is the name of the game, the CEP difference will come into play at these two airports. The CEP at IAD further illustrates why this hub should concentrate on O&D and not be used as a domestic connector hub. The cost is far lower at CLT to connect a massive amount of passengers in a cost effective manor for the airline.

 

[Elevation]

Between DEN and PHX is really a tough one. Cons: DEN has high costs and aggressive expansion by SWA and F9, PHX has huge SWA presence and lower yields. Pros: DEN facilities and central location, PHX population growth, weather. Bottom line is SWA is gonna be big after F9 goes away and the DEN and PHX yields will be the same in time. With the high cost of facilities it may be hard to stay in DEN when it turns into a low cost hub for SWA. In the end PHX and DEN both reduced 20% but remain small hubs, SWA gains 50% of the market in both cities.

 

[coolflyingfool]

Article now appearing in the LAS VEGAS SUN newspaper stating employees are telling them that the LAS hub is done on AUG 19. There is NO WAY any merger is going to happen that quick, so it may appear that LCC is taking down LAS on its own accord. LAS is a very low yield destination and this may allow LCC to give up some high priced leased aircraft or move them to more profitable runs on the East Coast. just my thoughts.......