Ual For Sale

[Busdrvr]

Come on BUS, we know that when DEN INTL opened 10 years ago and Continental scaled way back here. UniTED was gouging the CRAP out of the DEN market till F-9 came into play! And with it came cheaper fares which MANY in the DENVER market welcome and still enjoy today.

I don't expect you to understand this, but there is a differance between what people actually pay for fares and what the "book" price is. Additionally, up until around 2000, nobody wanted to fly FRNT, despite the so called "low fares" (and if you look at load factor they still don't). Do you think some people see additional value in flying UAL instead of FRNT?

Before FRNT, people could still connect on another airline. Yet they chose UAL's direct flights instead. What the small minded usually doesn't understand is that the ""S" curve is not do to airlines being able to command higher top end ticket prices. The S curve was alive and well during the days of regulation. Even at Identical fares, hub dominance led to higher revenue. Quite simply, that's why SWA was so opposed to the UAL/U merger. They knew they couldn't compete with the added "value" the network would provide the customer.

 

[Busdrvr]

think it is a pretty big stretch to say that the presence of a hub airport equates to population growth in the metropolitan area. If United suddenly decided to close their Denver hub and move it to Wichita, would Wichita suddenly go on a growth spurt. The presence of good air service is no doubt an attraction to a metropolitan area, and the location of the airport figures prominently in the geographic growth of the area.

Yes ICT would, if nothing else due to the increase in workers to support the hub. I don't make the population growth argument, that's Mike's. I contend it spurs economic growth. Look at SEA and AUS. Did Dell and MS spur industry in those regions? did they bring in businesses that found a benefit to being near them? Likewise, if you business requires extensive air service, where you gonna move? Near a hub? Near a hub that meets your travel objectives? If you make a product that serves primarily SA, you gonna put your company in DEN or DFW/MIA?

 

[KCFlyer]

think it is a pretty big stretch to say that the presence of a hub airport equates to population growth in the metropolitan area. If United suddenly decided to close their Denver hub and move it to Wichita, would Wichita suddenly go on a growth spurt. The presence of good air service is no doubt an attraction to a metropolitan area, and the location of the airport figures prominently in the geographic growth of the area.

Yes ICT would, if nothing else due to the increase in workers to support the hub. I don't make the population growth argument, that's Mike's. I contend it spurs economic growth. Look at SEA and AUS. Did Dell and MS spur industry in those regions? did they bring in businesses that found a benefit to being near them? Likewise, if you business requires extensive air service, where you gonna move? Near a hub? Near a hub that meets your travel objectives? If you make a product that serves primarily SA, you gonna put your company in DEN or DFW/MIA?

[post="252684"][/post]​

How come Kansas City didn't see a spurt of economic growth when Braniff, Eastern, and TWA attempted to make MCI a "hub" airport?. FWIW, neither did we see an economic decline when those hubs were dismantled. And MCI is one of the most affordable airports for airfares in the US (unless you are going to Dallas).

 

[mweiss]

Negative, Although Mikes Bezerkeley friend tilted a study to suggest higher cost travel due to hub dominance, other (IMO, more thorough) studies indicate the opposite, suggesting that consumers in the most dominated "overpriced' markets, actually enjoy CHEAPER air travel. had Mike done a more thorough google search, he'd found it....

[post="252578"][/post]​

Um, if you go back to what I originally said

Depends on who you ask.

...you'd see that I'm only pointing out that the case is very unclear.

Do I think hubs cost a region more than the benefit they provide? I don't know. There is a great deal of research on both sides, and they come to different conclusions, depending on what you're looking at.

It's like the earlier topic in this thread. Are taxes fair or not? Depends on your perspective. Speaking of which, busdrvr, I'm waiting for the list of 38 taxes that benefit the LCCs.

 

[mweiss]

Yes ICT would, if nothing else due to the increase in workers to support the hub.

Sure it would, and there is a degree of multiplicative factor to airline jobs, but it's a relatively small one. Here's what I mean:

Did Dell and MS spur industry in those regions?

I'll specifically call out Seattle, because I'm more familiar with the results there, and there's a decent analogy to be made there. In Seattle (or, more precisely, King/Snohomish/Pierce counties) in the mid-90s, a Boeing job had a multiplicative factor of 1.1, meaning that every new Boeing job created an additional 1.1 jobs in the area in secondary support (e.g., avionics companies, restaurants, grocery stores, anything for whcih the new job created demand). At the same time, a Microsoft job had a multiplicative factor of 3.

Which do you think the airline's hub employees look more like? Which is likely to have a more significant direct impact (specifically, this is in response to your first comment above).

 

[mweiss]

Before FRNT, people could still connect on another airline. Yet they chose UAL's direct flights instead.

Of course. There is no question that, for most people, nonstop flights provide greater utility than connecting flights. As a result, the demand for nonstops is higher than for connecting flights. Affinity programs augmented this effect.

The S curve was alive and well during the days of regulation.

Of course it was. It's just that the airlines couldn't choose the airfare to charge.

Quite simply, that's why SWA was so opposed to the UAL/U merger. They knew they couldn't compete with the added "value" the network would provide the customer.

[post="252679"][/post]​

You're overstating the case. It would certainly have added value to the network, but it's not as if WN would be unable to compete. It would have been harder, but not impossible.

Personally, I expected to find that a 2000 UA/US merger would have collapsed under its own weight. We'll never get to find out, though.

 

[Corinth2103]

Okay Folks..TOPIC DRIFT AHEAD..sorry Jim, but you're wrong concerning the SMSA or metro areas of Houston and DFW.
No chicanery involved with the Census Bureau and the powers-that-be in DFW but I'm sure they wish they had that much influence over the Census Bureau. Houston DOES include Galveston..and stretches to the north to include Montgomery County and The Woodlands, Kingwood, etc along with other bordering counties to the west and east in SE TX.

The DFW area does include Ft Worth and Tarrant County as it's next door to Dallas County...15-20 miles if you do your calculations and measure western Dallas to eastern Ft Worth. The bordering counties to the north and south are also included as they are in any other metropolitan area in the US.

Houston may be the 4th largest city in the US from city limit to city limit, but it's not the largest metro area or ADI (Area of Dominant Influence) in either Texas or the South.
DFW Airport and the availability of cheap land have helped the DFW area grow at a rate of roughly 1.2 million people since the 1990 and 2000 Census and why it's knocking on the door of 6 million in 2005.

Largest Metropolitan Areas

Rank Metropolitan Area Name States 2000 Pop.
1 New York-Northern New Jersey-Long Island New York, New Jersey, Connecticut, Pennsylvania 21,199,865
2 Los Angeles-Riverside-Orange County California 16,373,645
3 Chicago-Gary-Kenosha Illinois, Indiana, Wisconsin 9,157,540
4 Washington-Baltimore District of Columbia, Maryland, Virginia, West Virginia 7,608,070
5 San Francisco-Oakland-San Jose California 7,039,362
6 Philadelphia-Wilmington-Atlantic City Pennsylvania, New Jersey, Delaware, Maryland 6,188,463
7 Boston-Worcester-Lawrence Massachusetts, New Hampshire, Maine, Connecticut 5,819,100
8 Detroit-Ann Arbor-Flint Michigan 5,456,428
9 Dallas-Fort Worth Texas 5,221,801
10 Houston-Galveston-Brazoria Texas 4,669,571
11 Atlanta Georgia 4,112,198
12 Miami-Fort Lauderdale Florida 3,876,380
13 Seattle-Tacoma-Bremerton Washington 3,554,760
14 Phoenix-Mesa Arizona 3,251,876
15 Minneapolis-St. Paul Minnesota, Wisconsin 2,968,806
Source: Bureau of the Census, U.S. Dept. of Commerce

Okay..TOPIC DRIFT OVER...back to the regularly scheduled topic.....

Tim

 

[whlinder]

Rank Metropolitan Area Name States 2000 Pop.
2 Los Angeles-Riverside-Orange County California 16,373,645
3 Chicago-Gary-Kenosha Illinois, Indiana, Wisconsin 9,157,540
4 Washington-Baltimore District of Columbia, Maryland, Virginia, West Virginia 7,608,070
5 San Francisco-Oakland-San Jose California 7,039,362

[post="252756"][/post]​

You'd think as a hub carrier in these markets that UA would be doing better than Ch.11....

 

[Fly]

You'd think!

 

[whlinder]

Digging up this old topic which drifted into a discussion that had nothing to do with "UAL for Sale", but rather the impact of a hub on economic and population growth in a metro area.

Here is some recent relevant info, discussing how Fairfax County in the DC metro area has grown to rival downtown DC as the region's economic core.

Gerald L. Gordon, president of the Fairfax County Economic Development Authority, said he has taken to joking that "we are the downtown and Washington is our suburb."

Although the whole region benefits from proximity to the federal government, he said, Fairfax's success also can be explained by access to Dulles International Airport, good public schools and other services and a vigorous effort to recruit companies through a business-friendly climate.

 

[RowUnderDCA]

I don't care for Virginia