I’m Skeptical That United is Really Planning a Huge Growth Push at LAX

Bloomberg ran the headline and the news spread like wildfire. “United Airlines Said to Plan Los Angeles Push in Comeback Effort.” Could it be that after years of shrinking and ignoring Los Angeles that a big comeback is in the works? While I don’t doubt that United will be paying more attention to LA, color me skeptical that this is really going to be a major growth push.

The story appears to have come out of a pilot meeting with President Scott Kirby. In that meeting, he reportedly said “the company needs more space and is studying plans to claim most or all of a future terminal.” In particular, he was suggesting that United could gain control of the eventual-Terminal 9.

If Terminal 9 sounds familiar, it’s because it was one of the proposed new terminals allowed under a revised agreement with the neighborhood to the north of the airport, along with Terminal 0 and the new Midfield Satellite Concourse. So Terminal 9 is most definitely planned for the future, and now United wants it.

This is, of course, pretty funny since United only gave up the 4 gates it had in Terminal 6 a couple years ago. Now it may wish it had those back. Go figure. But I, for one, am not convinced this is really about United expanding.

I knew United had designs on Terminal 9 at LAX from previous conversations I’ve had with people at the airline. But the way I interpreted it, this wasn’t about United trying to do a big expansion as much as it was about trying to co-locate with its partners.

There have been a lot of changes at LAX lately, and the end result is that American (with its move of 4 gates from Terminal 6 to Terminal 5 today) now has a bit of Terminal 5, all of Terminal 4 and behind-security connections to the Bradley Terminal (TBIT) where American’s most important partners are.

Delta is beginning its move to take over Terminals 2 and 3, and that will be done in the next few months. Delta’s closest partners will be there as well, and a new behind-security connector to TBIT will be built. This means American and Delta will have an ideal (or as close as ideal as you can get at LAX) location with respect to their partners.

With Southwest likely to develop a new Terminal 0 to house its expansion (along with international flying) and Alaska staking its claim in Terminal 6, United finds itself without a way to bridge the gap between it down in Terminals 7 and 8 and its partners that are primarily in TBIT. That’s where Terminal 9 could come in handy. For the visual folks out there, here’s a terribly crude map:

With Terminal 9, United could conceivably bring over its joint venture partners Lufthansa, Swiss, Austrian, ANA, and Air New Zealand. (Air Canada is already moving over to Terminal 6, at last check, as part of the Delta terminal move.) Presumably other Star members could look at moving as well, depending upon how much room Terminal 9 would afford.

United is already spending a lot of money on refurbishing Terminals 7/8 to make for a better experience. Having an expanded customs facility with partner airlines attached in Terminal 9 would make it even better than that.

Does this mean United would then be positioned to launch a major growth spurt? I just don’t see it. I think United will continue to try to cater to locals as it does today. But are we going to see United add service to some of the mid-size markets that Delta and American own today (Indy, Raleigh/Durham, Nashville, etc)? It’s hard to imagine there being much room for that… or much interest since United is really focusing on serving those from San Francisco.

Maybe United will beef up frequencies and add some flights on the margin to make the airline more attractive. But a concerted, big, growth plan just seems unlikely.

Of course, I also thought when Scott Kirby and friends at US Airways took over American, they’d cut back in LA. I got that one wrong. Will Kirby prove me wrong again? I suppose we’ll find out when a Terminal 9 is built… many years down the road… if United gets to occupy it. For now, this just sounds like rhetoric to get the pilots excited about future growth potential. That is certainly a time-honored tradition in this industry, but it’s not always indicative of what happens in reality.

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