United’s Big Summer Expansion Confirms Its Focus on Connecting Traffic

When Scott Kirby left American to take over as President of United, he noted that United needed to do a better job of attracting connecting traffic. This week, United put out a big summer expansion plan, and guess what? It’s all about connections.

You may still be scratching your head as to why an airline would ever want to focus on connections. We’ve heard for years that travelers flying nonstop are much better for the bottom line. They pay a premium to fly nonstop while at the same time cost less because there’s only one flight instead of two or more. It is still true that airlines want to serve those high-dollar business travelers, but a lot has changed since those days.

Most notably, the rise of low cost carriers focusing on big markets has changed the game to some extent. Now you may have all kinds of low fare competition flying from, say, Philly to Ft Lauderdale (to use an American Basic Economy market), but you have almost no competition flying from State College to Ft Lauderdale via Philly. I took some random days this summer where availability was good, and the cheapest fare from Philly to Ft Lauderdale was $162.40 roundtrip (regular coach is $40 more than that Basic Economy fare). But if you add State College on either end and have the same exact flights between Philly and Ft Lauderdale? The roundtrip price is $413.59. Southwest and Spirit may be able to get you from Philly, but they can’t touch State College. And those fares are good money.

You might be wondering why I’m giving an American example in a post about United. It’s because American (and really, US Airways before the merger) was a pro at this. Look at Charlotte. There isn’t much local demand there, but there are so many smaller cities with limited demand that American can feed them all through Charlotte and turn it into a powerhouse. Did you know American serves 16 cities in the Carolinas alone? It’s insane.

And of course, Scott Kirby knew this all too well. So when he got to United, he found an airline that wasn’t looking at things the same way. It did have something working like this to some extent in its Denver hub, and Denver, it turns out, was the most profitable hub in the system. Outside Denver it was a different story. Look at a place like Chicago where American has much greater depth. It serves the Champaigns, Dubuques, and Bloomingtons of the world while United doesn’t… or didn’t.

So it was no surprise to see United announce it would add or upgrade service in 31 markets earlier this week, and most of them are focused on connections. Here’s how the markets that get new service break down.

Chicago Goes Small
I mentioned how United didn’t serve some of the same markets as American from Chicago, but it’s building those up. You’ll now see nonstops from Chicago to Charlottesville (Virginia), Champaign (Illinois), Columbia (Missouri), Reno/Tahoe, Rochester (Minnesota), and Tucson (goes year-round from winter-only). What do all of these have in common? American flies every single one. United is also adding Spokane, a market American doesn’t fly.

Chicago also gets more frequencies to Ft Lauderdale and Ft Myers, undoubtedly well-timed to connect to these and other flights.

San Francisco Goes Broad
San Francisco is seeing a different kind of build-up. It’s getting nonstop service to larger cities that don’t have service today, but these are markets that don’t work on their own. They only work because of connections. Look for new nonstops to Cincinnati, Detroit, Spokane, Hartford, Munich (summer only), and Santa Rosa (California). There will also be an extension of winter flights to New Orleans and Kalispell to be year-round.

These are almost all decently-sized markets, but they aren’t ones that work without a ton of connecting traffic. Munich, of course, is large but there’s no way SFO can support two daily nonstops (Lufthansa has another) without a ton of traffic feeding both ends.

The one outlier here is Santa Rosa. That’s a market that American just started from Phoenix. I was quite surprised to see United start it, however, because it’s a mere 1.5 hour drive from there to SFO. There will not be a single local traveler on these flights yet they’re operating 3 times a day. But guess what? United thinks there’s opportunity to connect a bunch of people from there via SFO to the world. As an added bonus, this will allow United to now choose between Monterey and Santa Rosa when it starts canceling flights when the fog rolls in. So congratulations on that, Monterey.

Denver Gets Tweaks
As I mentioned, Denver is the most-profitable and most connection-dependent hub in the United system. That means it’s where Kirby wants it to be, so he’s just extending his reach a bit. There will be new nonstops to Columbia (Missouri) and San Luis Obispo. There will also be more frequency to Albuquerque and Florida.

Washington/Dulles Gets Frequency
There honestly isn’t a ton happening at Dulles, but we are seeing some of the smaller markets get increased frequencies to build-up the hub a bit more. That includes more flights to Jacksonville, Providence, Portland (Maine), and Roanoke (Virginia). The Ft Lauderdale flight which used to be winter-only now goes year-round.

Newark Goes West
Newark admittedly isn’t seeing much of a change, but if there is a trend, it’s that flights are going west. Newark gets a new nonstop to Sacramento and a second one to Portland (Oregon). Its winter-only Salt Lake flight goes year-round. It also gets more flights to Atlanta and Detroit.

Houston/Intercontinental Gets Little
Ok, so Houston really isn’t getting much at all. It gains a nonstop to Springfield (Missouri) and added frequencies to Atlanta and Charleston (South Carolina). But that’s it for now.

Los Angeles Gets Nothing
Los Angeles is noticeably absent on this list. Why? Because LAX is not a connecting hub. I’m in no way surprised to see LAX left off completely.

These changes are substantial, and it shows the direction United is looking to go.

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57 Comments on "United’s Big Summer Expansion Confirms Its Focus on Connecting Traffic"

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Pedro
Member

Not much local demand in Charlotte? Metro population almost 3 million now….guess you mean in relation to larger cities

Kilroy
Guest

Google says Charlotte’s metro area population is 2.38 million. That’s about the same as Cincinnati, and compare the operations at Delta’s Cincinnati hub to those of American in Charlotte…

I think Brett’s point is that compared to almost all the other true hub cities in the US, Charlotte is among the smallest in terms of local demand and/or population.

Jason
Guest

There would also be especially little local demand for the many flights within the Carolinas and other under 300-ish mile flights where almost everyone would just drive to save time and money.

Kilroy
Guest

Great point. Similarly, there is relatively little demand to places like Columbia, SC from even major airports in the US (see: David Samson & United’s PANY/Newark scandal), and vice versa, but running pax through the Charlotte hub makes things work.

Steven Lorenza
Guest

Charlotte is peanuts. Sorry.

noahkimmel
Member

Seems like a lot of additions – are the added fights being offset by cuts? higher utilization? new airplanes? I would think if you want a more hub / banked schedule that would also increase ground time.

Alex B.
Guest
This is admittedly reading way, way between the lines regarding Dulles, but a few things add up here: IAD’s strength is a decent O/D base, particularly for international traffic. UA does a lot of connecting there, but my understanding is that it’s not nearly as high of a connecting percentage as, say, CLT. The airport has a lot of room to grow, unlike EWR. United signed a new lease at IAD; they’re working with the airport authority to lower costs; and UA is doing more flying there recently. One way to bring down the fixed costs is to grow traffic… Read more »
Don Roberto
Member

Maybe United and IAD could finally replace the decrepit C/D concourse.

Tory
Member
I would love to hear from Cranky building on this, possibly even in a stand-alone post. It seems like IAD has a lot of the same potential CLT had before AA/US built it up, or JFK did before JetBlue exploited it. I know its geography is not quite as advantageous as ATL or CLT, and it has the problem of BWI and DCA pulling away local fliers, but the DC metro has a lot more population than CLT and the equivalent of ATL. What would keep UA from turning IAD into a “best of both worlds” hub with domestic connections… Read more »
mikebeau
Member

United previously grew DOM connections at IAD (mainly north-south along the East Coast). Once in competitive response to USAirways growth at IAD (1998/99ish) and once to respond to Independence Air (2006?). If I recall, they had at least 4 daily R/T to even the smallest markets with higher frequency to markets like ORF, LGA, BOS. The four main banks were approx 8am, 12pm, 5pm and 10pm (this included new INTL flights to S. America, Mid East and additioanl frequencies to LHR/FRA/CDG).

southbay flier
Guest
1) Good luck driving SFO – STS in under two hours at rush hour or on weekends. It can be done, but there is a lot of traffic on 101. But, then again, I would be very leery of booking this flight due to a high probability of cancellation since SFO can’t handle weather. 2) I was surprised that UA never served CMI since I was a student in there in the 1990’s. They used to serve DNV, but it was AA, NW, and TW serving CMI when I lived there. Now, it’s just AA since DL pulled out twice.
ANCJason
Guest

19th Avenue alone is the reason these flights will be a success…and the CASM doesn’t need a huge load factor – they could probably survive 50% with the yields they’ll most likely get out of a market like Sonoma/Marin. Maybe SMART will help with the airport overall.
The airport lobbied for DEN but the aircraft weren’t available: http://sonomacountyairport.org/wp-content/uploads/aviationcommminutes_11-17-16.pdf

This route will also be the shortest in UA’s network, beating out ORD-MKE.

Kilroy
Guest

> This route will also be the shortest in UA’s network, beating out ORD-MKE.

Looks like it’s shorter by a mile. Wow.

Does that figure include “shortest in the network,” or “shortest by a mainline plane” (excluding regionals)? I know when I flew ORD-MKE the captain mentioned something about it being the shortest route, but I can’t remember if he was referring to just mainline metal or all flights operated by the airline.

ANCJason
Guest

Network

David Jordan
Guest

Air Wisconsin entered the CMI market in 1985 when it acquired Mississippi Valley Airlines (MVA). October 1986 marked systemwide branding as a United Express carrier and the airline withdrew ORD-CMI on February 10, 1993.

United Express more recently served BMI (2000-2008), but CMI makes more sense due to greater distance from existing stations PIA and SPI.

Tim Dunn
Member
First, United started fixing its excessive use of costly 50 seat regional jets several years ago by acquiring more 2 class RJs and using mainline aircraft in longer and more highly competitive markets. Second, Denver has improved for UA because Frontier is much less of a factor than it was years ago and fares have risen in what was once a 3-way battle between UA, WN and F9. UA used small RJs in many long markets from DEN so the profitability was bound to improve when lower unit cost larger aircraft began to replace 50 seat RJs. With all due… Read more »
Tower18
Guest
I was going to mention something like your last point as well. I noticed that many of the larger markets being added just happen to be competitive routes with DL. I always thought it was strange that UA didn’t serve SFO-DTW…you’d really think they’d have enough local+connecting feed to give that a shot, rather than sending everyone to DL. Same with CVG. Then, you also see that EWR is adding year-round SLC and getting more ATL and DTW. Again, the DL pattern. DL flies EWR-SLC non-stop all year (granted, just once daily). UA must feel like they can take advantage… Read more »
Steven Lorenza
Guest

I can’t think of a lot of traveling experiences that are worse than flying united and making connections. From being stranded at Dulles all day waiting for my 1 hour flight to Richmond or Raleigh to their surly and mean staff. I just say no to United.

Itami
Guest
The paradigm shift between local and connecting traffic is a lot like what many carriers around the world have seen with respect to domestic vs international traffic. The popular notion (especially in the US) was that domestic routes were a loss leader to feed the international moneymakers. Now in the post-consolidation, Open Skies, 787/350 world, it’s international routes facing the fiercest competition while domestic markets have become the cash cows for carriers lucky enough to have large ones. At least in places like the US, Australia, and to a lesser extent Japan. Unrelated, I had read somewhere that after a… Read more »
pddee
Member

Thanks for the news on United’s plans for expansion of service. Too bad there is nothing there indicating any sort of improvement of service to Monterey, my local airport. Ever since the daily flight to Denver was dropped, getting back east in a timely manner has become a bit more of a challenge. Maybe something will be forthcoming somewhere down the line. I much enjoy your blog – thanks for the great detail and service.

Patrick Dunne

ANCJason
Guest

With the similar demographics and similar distance from SFO it is strange that STS gets 3x daily when MRY has only has 2x daily, although this is the winter season and maybe STS will go down to 2x daily after September.

David M
Guest

MRY also has flights to LAX.

ANCJason
Guest

Good point

John S
Member

Excited to see 3 new UA flights to/from COU, my hometown airport. AA is the only airline serving our airport now and the flights are always packed. They obviously studied the load factors and realized there is room for some competition.

charcoal22
Member
Here is my question. Why doesn’t United have any flights out of MDW? They were actually founded there. I know they have been in and out in the past. They could, I believe, profitably fly to/from MDW to their other main hubs, and then offer international service from there. I live in Chicago and don’t understand why United doesn’t have at least some flights out of MDW. I sometimes see United charters at the airport. By the way, Southwest RULES at that airport, and that is the airline I fly since I prefer that airport. Any help?
ANCJason
Guest

The “TED” subsidiary tried it around ten years ago but didn’t last. I’m no means an expert on UA but I would assume that it not only cannabalized/competed too much with their existing ORD routes but also MDW is not a premium pax market (which is why WN dominates it) which airlines like UA survive on. Plus there aren’t but one or two available gates at MDW….at least there weren’t when F9 was doing the ILG/TTN routes. Others will know much more than I.

Tim Dunn
Member
you are right and the two reasons for UA and AA not flying to MDW are related. WN loves to operate its hubs/focus cities from airports it can dominate and where there are few gates for competitors. No carrier wants to start service in another carrier’s strength market and not be able to defend it if necessary. WN has plenty of gates it can use to run off a competitor. DL has been the most aggressive at serving WN hubs and it does so by serving at most its largest hubs. In the process, Delta becomes the largest carrier from… Read more »
ANCJason
Guest

Very informative observations. Thanks much.

charcoal22
Member

Please read

USBT
Guest
Good to see the daytime PDX-EWR restored and daily too. It was (I think) 5x weekly until early 2015 when it was pulled. That is a huge advantage for us UA fliers going to India as it gives us a one stop to DEL/BOM, arriving at 9pm-ish, as opposed to flying Lufthansa and arriving at stupid o’clock in the early morning. Otherwise the Delta partnership with Jet Airways would have swept up the PDX-DEL/BOM market via AMS, as well as TLV** and connections to the tier 2 European cities that United serves from EWR. ** – yes we can get… Read more »
Charles
Member

Another addition that I think is interesting: DEN-KOA goes from Saturday only to daily this summer on a pmCO 752. If my memory is correct, I don’t think UA has ever flown anything DEN-Hawaii daily except for DEN-HNL. But doing DEN-KOA daily definitely gives a broader reach into the interior of the mainland better than the traditional Hawaii gateways (SFO/LAX) do. Interesting to see how this enables things like COU-KOA to be done with only one stop.

John S
Member

Funny you should mention that. I am looking to book a COU-OGG or COU-KOA this winter :)

IO
Member

this O&D seems like a marginal move. how much margin? imo, very little.

jaybru
Member
Just wondering how much of a waste (cost, use of air space, etc.) our national air system is by what you are talking about here. State College is a good example–traffic is split up 4 ways–SkyWest/Delta via DTW; Piedmont/AA via PHL; CommutAir/UA via IAD; and ExpressJet/UA via ORD. Why should there be 4 operators out one place like this, and the same for every one of the many State Colleges across this faif land? Do people decide/particularly care what/how to fly from the “State Colleges” of the country–the spoke operator and its reputation and its aircraft/seats, distance to a hub,… Read more »
Tim Dunn
Member

that’s EXACTLY what deregulation was intended to end.

I can assure you that four operators at a small airport don’t matter in the scope of the national ATC system.

more importantly, four operators add competition which many small cities want.

Itami
Guest

I can’t say I follow. If only one carrier flies from State College to a “connector”, then chances are that they’d be the only hub and spoke airline that flies to other spokes from there, like AA at PHL. So you’d really have pretty much no competition for connecting traffic unless you expect people to ticket-split. Or are you talking about dismantling the hub and spoke system and just have everyone compete on point-to-point routes?

Tory
Member

Not really. There’s a certain amount of daily demand out of a place like State College – what does it matter if those seats are spread over 4 carriers or 1 if it’s the same total number of seats? In fact, 4 is better because there is price competition!

Hyun Gu Kang
Guest

Back in 2003, I flew from CHO to CMI for a reunion (Go Illini!). CHO-CVG-CLE-DTW-CMI. On the return, CMI-DTW-CVG-CHO. The other option was connecting at IAD and ORD, but that was not practical either. Now, there are more one-stop options, like via ORD or (CVG when Delta had it) Delta used to the only carrier for it, but now, American. Soon, United. Too bad it is unlikely that I will fly that route ever again.

u600213
Guest

Since I reside in Springfield MO, the new flights from SGF to IAH are very important to me. AA has been adding flights at SGF while UA had cut back until now.

Aaron
Guest
Kirby addressed in an employee letter why LAX is not getting any growth. We are not adding any additional flying at LAX at this time because we need more gates before we can embark on a growth journey there. We are committed to LAX for the long game – exemplified through our recently remodeled and reopened United Club — and we’re working hard to secure additional facilities that will give us the ability to compete vigorously. I believe in the future of LAX and its critical role as one of our hubs, and, as we are able to get commitments… Read more »
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