Two Questions

[Ukridge]

I may have asked this a few months ago, but as I am flying back and forth from London to Frankfurt with Lufthansa twice a month or so, I am able to gain a small perspective of one of United's main Star colleagues. It seems that with the introduction of the newer long range Airbus 340 models that airlines such as Emirates are planning ultra long haul flights from destinations such as Chicago and New York to the Gulf. One of the Lufthansa staff mentioned to me that this is something that Mayruhber (CEO) is keeping under watch as it means that airlines now have the capability for global point to point service and can skip the nodal construction of the Star hub concept.
It sounded as if Mayruhber's concerns lie not so much with Emirates per se,( although any threat must be watched) but rather the concept of the point to point global potential. In other words I do not know how many passangers Emirates would siphon off from Lufthansa. The concern seems rather that 'someone' else could step in and try on Lufthansa's pitch.
This question then goes to the relationship between United and Lufthansa. As we discussed previously, United seems to wish to fly only an infintesimal fraction of the Star flights to continental Europe that LH operates to the Americas. This from my humble observation post seems as if it will prove of vital interest in the future. Why stop in Frankfurt (or any other hub for that matter) if you do not have to? Why stop in Japan from Singapore when you can now fly non-stop? It seems as if not only will the established old blood carriers continue to face challanges from the young vulgarians, but now as well, from efforts to by-pass the global hub and spoke system.
Also, does United offer the wealth of newspapers on short range flights that Lufthansa does? This is a very nice service on behalf of the Teutonic Corps as they have very broad selections in the waiting area. Very nice touch. (I know United offers them on the trans-atlantic flights in business class)
Cheers

 

[Cosmo]

Why stop in Frankfurt (or any other hub for that matter) if you do not have to? Why stop in Japan from Singapore when you can now fly non-stop? It seems as if not only will the established old blood carriers continue to face challanges from the young vulgarians, but now as well, from efforts to by-pass the global hub and spoke system.

Ukridge:

IMHO, I don't think most of these new ultra-long-haul flights will negatively impact the global hub-and-spoke system to any significant degree, although they may have some short-term affects on a few specific hubs. Remember, most (if not all) of these new flights have an airline and/or alliance hub at one end of the route, and in a few cases, at both ends. Air Canada's flights from Toronto to Delhi and Hong Kong and Emirates' flights from Dubai to New York are examples of the former, and Singapore Airlines' flights from Singapore to Los Angeles is an example of the latter. In addition, there are probably only 40-50 cities worldwide that currently have the hub strength and/or local traffic base that would be required at both ends of a route to support such flights. Passengers from all other cities would still need to connect through at least one hub to get to their ultimate destination.

Instead, I believe what you are seeing (and the Lufthansa/Frankfurt situation that you mentioned is a good example) is the effect of comparative advantage that different carriers and/or alliances will have in different markets. While Lufthansa and its Star Alliance partner United might now lose some of their U.S.-Dubai traffic to Emirates' new flights, United could respond by beginning Chicago-Delhi or Washington-Delhi flights in order to recapture some U.S.-India traffic that might transit Dubai once Emirates' new service begins in June.

And so it goes, back and forth. Somebody's hub will nearly always be bypassed by the ultra-long-haul flights. But no carrier or alliance will be able to offer nonstop service in every market that could conceivably support such service by at least one carrier. Rather, IMHO carriers and alliances will continue to strengthen their own hubs by offering more frequent and faster connections to as many worldwide cities as possible, and in the process bypassing as many other carrier/alliance hubs as they can.

 

[Ukridge]

"IMHO carriers and alliances will continue to strengthen their own hubs by offering more frequent and faster connections to as many worldwide cities as possible, and in the process bypassing as many other carrier/alliance hubs as they can. "

Very interesting point! This will be a chess match worth watching as the carriers/alliances jockey for position. I may be wrong in my thinking, but it seems as if the the real revolutionary changes in this industry are just on the horizon. By this I mean as the alliances struggle to gain domination on both ends of the spectrum - the regional feed as well as the longer segments from which they can gain advantage and therefore profit. In theory I would think that an alliance would wish to control the product from A to Z and this is why I believe that at some point the alliances will have to go after the LCCs of the world while also protecting their global span. We certainly will see.

As always thanks Cosmo. You bring a lot to this forum with your reasoned explanations and they are much appreciated.

Cheers

 

[mweiss]

I disagree with Cosmo in some respects. What used to force the market to these international hubs was the direct correlation between aircraft size and range. The DC-9 had a short range, while the 747 had the longest range. Technology has changed since the 1960s, allowing 737s that can fly from HNL to the west coast, 767s that can fly from ATL to Europe, and 777s that can fly from JFK to HKG.

As smaller airplanes can go longer distances, the thinner routes that never could support a 747 but could support a 757 can now be considered for nonstops, instead of connections, or single connections instead of double connections. Routes like DEN-DUB come to mind.

What remains somewhat unclear is how small the airplanes can become before the comfort levels degrade to the point where people decide that the extra connection is better than the discomfort.

Of course, this runs counter to the demand that has appeared for the 380, but I'm not sure the two approaches are mutually exclusive. Some routes will remain very dense, even in a point-to-point fashion, especially in terms of time (e.g., routes to Europe tend to concentrate on early-morning arrivals, and do not have much demand for, say, leaving New York at 1PM and arriving at 3AM in London). Recall, for example, that Japan has supported all-coach 747s due to heavy demand. Such a market would easily support the move to 380s.

 

[Just Plane Crazy]

IMHO UA and LH are not going to be the big losers with Emirates offering Non-Stop from DUB-JFK. BA and AA are going to suffer more. The other thing you have to add to the equation is that if you travel for business, you can get a connecting flight in FRA to any major European City and not be longer than 2 hours in the air. Doing this from LHR you have to add another hour. Stopovers to conduct some additional business without paying much more is important to passengers and that will keep UA and LH in the game.

As for the offering of newspapers on LH, they used and most probably still receive these papers and magazines for free or at a very very discounted price.

 

[G4G5]

I agree AA and BA will most likly feel the pain. How long before Kuwait and Gulf Air are doing the same thing?

 

[JFK777]

Emirates is a hugely ambitious airline, its ordered 45 A380's. Before flying to the USA its flown everywhere from Dubai to Japan, Australia, South Africa & The UK. In the UK it flies to LHR, LGW, BHX, MA and GLA; talk about covering all the basis. Emirates A345's are just long thin aircraft.

I see Emirates type of flying happening from BIG Cities like Jfk, Ord, LAx, SFO, IAD and Mia. JFK or ORD to India should happen, those cities can support it. No European hub is going to be hurt by these new ultra long flights, smaller city service to Europe will still need the connecting hub. On DL/AF from CVG to CDG how many people are only going between those two cities? There will be a place for the connecting hub, Singapore Airlines isn't replacing service from LAX, its increasing daily flights from 2 to 3.

 

[ZMAN777]

To add to this discussion, allow me to interject a new twist on city-pairs that the advent of new Boeing 7E7 will have on the industry. I firmly believe that this aircraft may very well bring the LCC's (JetBlue comes to mind or say SWA BWI/PHL-HNL!) to the long-range domestic/international arena, and in a big way.

Think of it. A 767 size aircraft that will have the capability (assuming the performance profiles from Boeing are accurate) to fly JFK-HKG or SIN. Talk about long-thin routes! The city pair possiblilities are incredible, and will offer the LCC's the opportunity to offer service to international destinations without having to buy the "big metal" of a A380, 747, or 777. or the A340/330 variety and do it more efficiently.

At the same time, this aircraft will offer the major hub carriers the added flexibility to serve established city-pairs that are not efficiently served year round as well as open up new routes that before have proven long-shots.

This aircraft offers much more promise/potential for more carriers, IMHO, than the A380 (even though I believe it too will have its niche) as it'll be much more flexible in terms of operating costs, not to mention simple infrastructure needed to support it.

Cheers,
Z

 

[ual06]

Can't help but wonder about adequate utilization of these ultra-long-range birds. It is impossible for these birds to return to departure airport for the flight on the next day. Therefore at least two birds will be required to fly each daily departure. A lot of time on the ground for each of the two birds.