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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37 Comments on "I’m Skeptical That United is Really Planning a Huge Growth Push at LAX"

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Itami
Guest

Out of curiosity, Cranky — where did the “Cats and Dogs” in joke come from?

Like you, I suppose I’ll believe this when I see it. Or at least when UA makes a more public announcement to that effect. In either case, LAX so big of a market that Number #3 isn’t all that bad of a place to be in. AA is the #3 in NYC and they can still be relevant with travelers and corporates.

Dave
Guest
Cranky, I respectfully disagree with you. The signs are all over the place that United is in a lull before the storm. The construction in Terminals 7 and 8 is monumental and the upgrades are huge. I also would argue United gave up the Terminal 6 gates simply because they are so out of the way and such an island in their LAX footprint that they were more difficult to operate than they were worth (though I did like the United Club over there — a lot more quiet and civil). I recognize that United is building up SFO, but… Read more »
Jdel
Guest

Aside from the infrastructure growth, what are some routes and markets they would expand into? LA is a huge market, but also hugely saturated.

David SF eastbay
Member

Building a new terminal 9 is a long ways away, so why is this even a news item now?

So who gets tiny terminal 1.5 which I just noticed, kittens and puppies….LOL :-)

Neil
Guest

Jetblue, Frontier, Spirit and others will battle for scraps. Too bad lax is such a landlocked airport. Just like some of their roadways, they should go double decker. Humor me with that one.

George
Guest

OK I get Terminal 0-goodbye paid parking lot. MSC-hello “SkyTram” or whatever the people mover system will be called. Terminal 9?!?!. Where are they going to put it? There is this little road called Sepulveda just about where Terminal 9 might(?) go. What’s the plan-a gazillion dollars to rework Sepulveda and the entrance to LAX? A standalone terminal to the east of Sepulveda? How does the monster Consolidated Car Rental/Parking facility by the 405 play into this? Or is it just to early to worry about this?

A Finn In Texas
Guest

CF,
I apologise for being confused. When I lived in Helsinki getting around that airport was easy. LAX seems confusing. I have my parents flying in in April and they have to switch to American Eagle. A friend of mine told me that American closed a terminal for Eagle where you had to take a bus. My father is in a wheelchair. My friend told me that people in wheelchairs are not allowed on the bus. Please advise if you can. Thank you

jeff
Member

The “Eagle’s Nest” is still alive, and is still busing, but the buses and terminal are definitely wheelchair accessible.

Dave
Guest

Wait – DL is already beginning its move over to T2/T3? I thought that was another 4-5 months out. Any sense of when they’re set to begin operating flights out of T2/T3? And I guess there won’t be a Sky Club for some time.

Tim Dunn
Member
I am guessing the AA/DL gate swap is the first one that is being done because AA wanted to make sure it benefitted first before it supported the plan. Remember, there are nearly 2 dozen airlines moving in order for DL to gain a bunch of extra gates and they are all voluntary. it isn’t the least bit lost on AA that DL has the most near-term growth potential and AA has no choice but to play nice if it wants to get the next big chunk of gates. DL expects to be fully located in Terminals 2/3 by May… Read more »
Zorro
Guest

Cranky, I think Kirby is going to prove you wrong again; UA is serious about this plan. Their 16% share today will diminish if they let AA and DL continue with the current binge with increasing capacity. I understand Oscar and the Board are invested in growing at LAX. Star Alliance CEO’s held a recent meeting in LA. Something is definitely brewing.

SeanMcQ
Guest

After I read the article Friday I wondered how soon you would have a post about it. It does make sense from an operational standpoint Cranky. You’ve pointed out before how padded UA’s schedule is at LAX and a lot of that is gate space. Planes land 25 min early and then end up with a late arrival because they are waiting for gates to open up. The lane between 8 and 7 is often clogged so T9 would allow more breathing room.

I don't live in LA
Guest

Another LAX terminal article – yay!

Tim Dunn
Member
Whether UA is serious or not, the decision to let go of gates in T6 has consequences that include having even fewer gates while they remodel their other terminals. They simply didn’t think out their needs or the construction process because if they did they wouldn’t have cut their gate capacity to the minimums esp. right before construction. Even if they do move forward with T9, LAWA has a full slate of projects and there is no assurance whatsoever that LAWA will move forward with T9 out of the order of all of the other projects if for no other… Read more »
LAXd
Guest
Building a Star Alliance terminal would create competition for the MSC North/South. It’s not just about gates but all the lounge space in the MSC and TBIT West that LAWA needs to rent. Without the Star Alliance, who takes up that space? United might have a greater case to make if it wanted T9 just for itself or if it agreed to share the terminal with JetBlue, Spirit, et al. Of course, that still doesn’t clear the primary physical obstacle to a Terminal 9, namely the Eagle Terminal. At the moment, there are no main terminal gates LAWA can trade… Read more »
Alex Hill
Member

AA taking gates at T5, reconfigured into regional jet configuration to get a few more in, while the T5 cats and dogs move over to T9 or TBIT could make room to get rid of the Eagle’s Nest in principle, I think.

Tim Dunn
Member

AA has said for years they would give up their hangar and the Eagles Nest for space in the MSC and/or terminal 5. The Eagles Nest only accommodates RJs – small ones at that with any kind of customer service so they are happy to trade those gates for full mainline capable gates.

LAWA has to be careful to not relegate airlines other than AA/DL/UA to distant gates or it will be charged with playing favorites to the highest bidder.

Alex Hill
Member

Not just small RJs. AA’s E175s operate out of the Eagle’s Nest as well.

I would think that T9 would be relatively desirable (obviously depending on the actual design), as a brand new facility which can be accessed via the first cut-off road, meaning you don’t have to slog by T2, T3, T4, TBIT, T5, and T6 to get in or out.

Alex Hill
Member

Will terminal 9 take the physical space of the Eagle’s Nest? If it does, I assume AA will get commensurate gate space in TBIT or T5, with then-current occupants of TBIT or T5 moving over to T9?

jaybru
Member

The cost, the space to build all these gates, moving here, moving there.

Why don’t airports simply have a million hard-stands everywhere, wherever, with a consolidated check-in area (Union Station), a consolidated TSA area, a single departure shopping center area with airline clubs, restaurants, shops, duty frees, whatever, and busses, trams, plane-mates going out to the stands, and then no more piers, terminals, and all that gate infrastructure.

OMG, UA/AA/DL and all the uppity-up folks, like I want to think of myself, brushing shoulders with the unwashed Spirit/Allegiant/Frontier, well, whatever they are! Just an opinion.

Ryan
Member

Cranky, do you know how much growth potential Delta is gaining from the move? It seems that if LAX wasn’t catering to the highest bidder, than the only benefit of the move would be less traffic congestion. However if there is significant growth potential for Delta then it would most likely come off as catering to the highest bidder.

Tim Dunn
Member
Cranky can and should respond but I can assure you that Delta is not spending nearly $2 billion to relieve congestion esp. since they have one of the better on-time records at LAX already. The number of gates DAL gets depends on when they talk about it. They have the right to reconfigure terminals 2 and 3 to hold up to 27 gates plus they can gain access to gains at TBIT depending on how heavily they use their international gates in Terminal 2. DAL says the biggest benefit will be to allow it to co-locate with several of its… Read more »
Alex Hill
Member

It’s worth mentioning that the airport, not Delta, paid nearly all the cost of the Terminal 5 renovation, as I understand it; I believe the plan all along was that T5 would not be Delta’s long-term home.

Tim Dunn
Member
That is true in nearly all cases at airports unless the airline specifically owns the terminal – which is becoming increasingly rare. The airport then turns around and adds the increased costs in the airline’s lease but these days more concessions help offset actual costs to the airline. The real cost to an airline, esp. at LAX, is the aggravation of working around construction and virtually every airline has had hampered operations because of construction and remodeling. At Terminals 2/3, Delta is paying some of the cost of the remodeling/refurbishment with its own money, likely because they can ensure the… Read more »
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