Western US hub strategies for all carriers, including DL

[WorldTraveler]

At the suggestion of Kev, and I agree, this thread is specifically about western US hub development and applies to all carriers.

The genesis of the thread involves questions about SLC's future alongside DL's SEA hub but the west is a focus for all carriers right now.

Since this IS airline forums, the labor implications of such strategies are fair game.

this is a valid business strategy discussion and if kept as such without name calling, it can be a means for all to participate.

The primary discussion is DL and UA's 3 hub strategy in the west (LAX, SLC, and SEA for DL; LAX, DEN, SFO for UA) compared to AA's two hub strategy (LAX, PHX)

DL looked at what UA has done and figured what is necessary to be at least on parity with them. UA is still the largest legacy carrier in the western US. Their strategy has worked.


DL has not been as strong in the west as a whole but has had more focus throughout the west instead of just one or two hubs - LAX and PHX for AA, SEA for AS.

DL and UA do not believe they need to have as large of an operation in LAX - a more competitive market - because they can still focus on the top markets with more point to point service and leave their other hubs to serve smaller cities.

it is far from clear how DL and UA's strategy vs. AA's will work but there is no evidence that DL's growth in SEA is working while they have lost nothing in SLC.

UA seems to be holding its own in the local LAX market, DEN is stabilizing with F9's pulldown, and SFO is still growing.

The clear difference between what DL and UA are doing is that DL and UA have a strong position in each of their hubs and the markets they serve since LAX is still highly fragmented along with geographic spread....

DL and UA's position in the west is interestingly similar to AA/US in the east.... with the difference that DL and UA's western int'l ops are less spread out than AA/US' in the east.

 

[jcw]

The best line already is "the genius"

What other lines just make you roll over in laughter

 

[Glenn Quagmire]

No. Don't give the d-bag a new thread to regurgitate the same crap over, and over, and over again.

 

[commavia]

The best line already is "the genius"

What other lines just make you roll over in laughter

 
I love how the magnanimous forum expert has been so generous as to offer us a discussion on hubs "for all carriers" curiously located ... on the Delta forum.  Telling.

 

[WorldTraveler]

so, none of you really have anything to contribute but decided to just drop in to dive bomb?

the question is a valid question... and it addresses the question of the validity of DL's 3 hub network - and the duplication that some see between SEA and SLC, and even MSP.

UA has a similar structure in the west and has for years. They are the largest legacy carrier in the west. DL apparently realized the value that UA has in its western US network.

for its part, WN has a multi-hub/focus city western US strategy as well.

AS and AA are the two that have highly regionalized strategies rather than a broad western US strategy.

Is it possible that AA and AS' both are forced to work together - or even merge because both have structural limitations compared to DL and UA with multicity hubs and int'l gateways? AA and AS do complement each other.

but then you get into the same issues that DL has had with AS - either you merge or AS sees more value in serving multiple carriers which will hurt any of its partners in isolation.

 

[robbedagain]

give it some time and AA with its LAX hub will be on par or better than DL SLC or even SEA hubs   not to mention may be even UA SFO and DEN hubs   DP is no dummy    he will see to it AA will fight it out to win    

 

[topDawg]

DL and UA do not believe they need to have as large of an operation in LAX - a more competitive market - because they can still focus on the top markets with more point to point service and leave their other hubs to serve smaller cities.

I disagree. United is still right there with AA in flights and I believe Delta might be larger than United in market share now. 
 
I know its every AA fan boys dream but LAX is, has been, and always will be to fragmented to have more than a 200-250 flight a day hub. You have competition on basically every route and unlike New York (with Europe) it is to far south to be a great connection point. 
 
United and Delta just, IMO, have better hub locations for Asian networks than AA has. Of course American doesn't have much of a choice. LA or Portland is about it. 
 

it is far from clear how DL and UA's strategy vs. AA's will work but there is no evidence that DL's growth in SEA is working while they have lost nothing in SLC.

I don't think its far from clear. American (or Delta) would be all over SFO if they could do it. As we are seeing this summer LAX-PVG is going to the 789 as well as a second daily SFO-PVG. AA on the other hand is burning money on LAX-PVG. 
I think there is a reason why Parker has come in and added DFW-Asia and not LAX-Asia. Not only does LAX-Asia have tons of competition, anything AA does now is going to get a reaction add from at least United if not Delta also. (who wants to bet the moment AA adds LAX-PEK or ICN United adds it too? LAX-PEK with three carriers and Air China having 4x daily....sounds like an awesome way to light cash on fire)
 
The only issue for United in the market place is Denver. Great hub, money pit with two other LCCs pumping in capacity like its nothing. (and United's smart idea to fight F9s 32S and WNs 737s with CR2s and ER4s)   
 

UA seems to be holding its own in the local LAX market, DEN is stabilizing with F9's pulldown, and SFO is still growing.

No question about it. The only big market places United has jumped out of are LAX-PDX/SEA. 1) those two cities have natural flow over SFO that has 500 flights a day on United to LAX, also it is a market place that American isn't even. (though oddly enough WN just added LAX-PDX and Delta is capacity dumping in LAX-SEA. Up from basically all E75s and 1 757 to all 737s (mix of 800/900ER) a 757 or two and one E75. (and at 8xish daily) 
 

The clear difference between what DL and UA are doing is that DL and UA have a strong position in each of their hubs and the markets they serve since LAX is still highly fragmented along with geographic spread....

Well and United is years and years along in a market place that is basically out of meaningful room to grow (SFO). Place again, SFO is the crown jewel of the west coast for a hub. LAX is to far south and fragmented and SEA is too far north (fine for Asia, not so much for domestic flying) and not nearly as large as LAX/SFO (and you have to worry about spill over to YVR also)   
 

DL and UA's position in the west is interestingly similar to AA/US in the east.... with the difference that DL and UA's western int'l ops are less spread out than AA/US' in the east.

I think all three airlines are comparable on the east. ATL,LGA,JFK,DTW,CVG for Delta. MIA, CLT, DCA, PHL, ORD for AA and EWR, IAD, ORD for United. United clearly lacking a southern hub. 

 

[topDawg]

give it some time and AA with its LAX hub will be on par or better than DL SLC or even SEA hubs   not to mention may be even UA SFO and DEN hubs   DP is no dummy    he will see to it AA will fight it out to win    

I'll take that bet Rob. To much fragmentation in LAX for it to ever be comparable to United at SFO. 
 
SLC/DEN aren't really comparable and AA is already larger at LAX than Delta is at SEA. (not on the international network but total flights.) 

 

[Kev3188]

At the suggestion of Kev, and I agree, this thread is specifically about western US hub development and applies to all carriers.

The genesis of the thread involves questions about SLC's future alongside DL's SEA hub but the west is a focus for all carriers right now.

Actually, I asked to break a discussion of DL's hub at SLC off from a thread about the demise of the MEM hub, but this'll work, I guess.

 
 

I love how the magnanimous forum expert has been so generous as to offer us a discussion on hubs "for all carriers" curiously located ... on the Delta forum.  Telling.

That's on me. See my above comments. Sorry...


On a selfish note, since this is now a sort of omnibus thread, here's a cut-n-paste I posted yesterday about the greatest airport on Earth (PDX). it was exiled to a non-carrier forum. Hopefully now, it can see the light of day...

----------------------------------------------------------------------------------------------------------------

Looks like AS will move to E, and UA will move to C?
 
http://m.bizjournals.com/portland/blog/real-estate-daily/2014/12/n-two-airport-deals-port-proposes-98m-pdx.html



As part of that...



Only in PDX would the airport carpet have it's own Instagram account. But it is iconic, and now it's being replaced...



http://intransit.blogs.nytimes.com/2014/12/16/in-portland-its-curtains-for-an-airport-carpet/?partner=rss&emc=rss&_r=1

 

[topDawg]

 

Actually, I asked to break a discussion of DL's hub at SLC off from a thread about the demise of the MEM hub, but this'll work, I guess.

 
 

That's on me. See my above comments. Sorry...


On a selfish note, since this is now a sort of omnibus thread, here's a cut-n-paste I posted yesterday about the greatest airport on Earth. it was exiled to a non-carrier forum. Hopefully now, it can see the light of day...

----------------------------------------------------------------------

Looks like AS will move to E, and UA will move to C?



http://m.bizjournals...es-98m-pdx.html





As part of that...



Only in PDX would the airport carpet have it's own Instagram account. But it is iconic, and now it's being replaced...



http://intransit.blo...ss&emc=rss&_r=0

am I the only clicking on the links only to have the thread pop up again?

 

[Kev3188]

 

The only big market places United has jumped out of are LAX-PDX/SEA. 1) those two cities have natural flow over SFO that has 500 flights a day on United to LAX, also it is a market place that American isn't even. (though oddly enough WN just added LAX-PDX and Delta is capacity dumping in LAX-SEA. Up from basically all E75s and 1 757 to all 737s (mix of 800/900ER) a 757 or two and one E75. (and at 8xish daily)

Don't forget that AA is also apparently adding some E75 flying (operated by CP) on PDXLAX.

UAL's network in the PacNW is a shadow of what it once was, and their capacity on PDXLAX certainly embodies that...

 

[Kev3188]

 

am I the only clicking on the links only to have the thread pop up again?

No, you weren't...

I think I've got 'em fixed if you want to check it out again...

 

[commavia]

"[AA] do[es] not believe [it] needs to have as large of an operation in [NYC] - a more competitive market - because [it] can still focus on the top markets with more point to point service and leave their other hubs to serve smaller cities."
 
I am going to copy and paste this into every thread hence where we are treated to the doom and gloom of how AA is a shambles in NYC and cannot compete because it has fewer slots than its competitors.  AA can be competitive in NYC - not as large as rivals, but competitive - even despite a structural access disadvantage driven by slots, just as Delta and United can - I agree - be competitive at LAX even despite what appears to be a structural access disadvantage driven by gates.
 
Now cue the ruminations on why the two are fundamentally different and not comparable and AA is doomed in both places ...

 

[topDawg]

 

Don't forget that AA is also apparently adding some E75 flying (operated by CP) on PDXLAX.

UAL's network in the PacNW is a shadow of what it once was, and their capacity on PDXLAX certainly embodies that...

That has been pushed by some AA fan boys for a while, I'll believe it when I see it. 
 

 

No, you weren't...

I think I've got 'em fixed if you want to check it out again...

Okay thanks! 
 

"[AA] do[es] not believe [it] needs to have as large of an operation in [NYC] - a more competitive market - because [it] can still focus on the top markets with more point to point service and leave their other hubs to serve smaller cities."
 
I am going to copy and paste this into every thread hence where we are treated to the doom and gloom of how AA is a shambles in NYC and cannot compete because it has fewer slots than its competitors.  AA can be competitive in NYC - not as large as rivals, but competitive - even despite a structural access disadvantage driven by slots, just as Delta and United can - I agree - be competitive at LAX even despite what appears to be a structural access disadvantage driven by gates.
 
Now cue the ruminations on why the two are fundamentally different and not comparable and AA is doomed in both places ...

I don't think the two are completely comparable because of LGA/JFK split. Also because Delta and United are able to be a good bit bigger by flights than AA is in New York, where in LAX DL/AA/UA are all able to be fairly close in flight numbers. 
 
But for the most part I agree with you. 

 

[WorldTraveler]

Don't forget that AA is also apparently adding some E75 flying (operated by CP) on PDXLAX.

UAL's network in the PacNW is a shadow of what it once was, and their capacity on PDXLAX certainly embodies that...

I believe I read that WN is adding PDXLAX service next summer... not sure if IIRC but if so that will make that market very crowded.
 

"[AA] do[es] not believe [it] needs to have as large of an operation in [NYC] - a more competitive market - because [it] can still focus on the top markets with more point to point service and leave their other hubs to serve smaller cities."

I am going to copy and paste this into every thread hence where we are treated to the doom and gloom of how AA is a shambles in NYC and cannot compete because it has fewer slots than its competitors. AA can be competitive in NYC - not as large as rivals, but competitive - even despite a structural access disadvantage driven by slots, just as Delta and United can - I agree - be competitive at LAX even despite what appears to be a structural access disadvantage driven by gates.

Now cue the ruminations on why the two are fundamentally different and not comparable and AA is doomed in both places ...

the difference still is that DL and UA have chosen to serve EVERY major business market from NYC depending on the market and have a lot of other cities thrown in as well. AA simply doesn't have that kind of coverage from NYC

Size does matter. It has been repeatedly shown that carrier size relative to competitors results in market strength. Given enough of a size difference, that will be true in LAX... but it doesn't happen in LAX now - where all 3 of the network carriers are within 1% of each other in average fare because no carrier has enough of a size advantage vs. other carriers.

Most LAX carriers are highly competitive and also dominated by one carrier... in order for a 2nd carrier to gain a substantial revenue advantage, they will have to have a similar size advantage in the majority of those markets.

In order for AA to duplicate that strategy at LAX, they would need about 400 flights/day in order to serve the top markets that other carriers serve and do so with enough frequency to really have a decent sized presence.

The only way that strategy can work is if AA obtains ALL of the growth gates - and no other carrier has any growth and that simply is not going to happen.

AA will grow its facilities at LAX. That has never been in doubt.

The assumption that AA will be able to grow and other carriers will not be able to is flawed.

LAX simply does not have the space even with all of the facilities that are potentially on the drawing board in order for any carrier to have the size advantage at LAX that DL and UA have in NYC while accommodating the growth that will include other carriers at LAX, including foreign carriers.

and it still doesn't change that DL and UA have two west coast hubs each and the 2nd (larger) gateway is better suited geographically and competitively for Asia traffic.