Update 9/27 at 412p PT: In a true coincidence, I’m told that Brian is no longer with United as of today.
In August, I proclaimed that while Los Angeles was still a focus city for United, it was no longer a hub thanks to the way it was being scheduled. There was plenty of debate in the comments section, but why bother debating when you can go straight to the source? At the Boyd Conference in Tahoe last week, I sat down with Brian Znotins, VP of Network for United to talk about that and more. Today you’ll read about both LA and San Francisco with more to come in a later post on aircraft and new management. But first, let’s just get right to the point, shall we?
Cranky Flier: I want to start in LA, because I wrote a post a month or two ago…
Brian Znotins, VP Network for United: I saw that
Cranky: Ok, you saw it, so I was saying it’s not really a hub anymore; it’s focused on LA origin and destination traffic. That generated a whole ton of discussion about “is it, what is it, what isn’t it?” So… what is it?
Brian: Definitely a hub.
Cranky: Definitely a hub.
Brian: Absolutely a hub. I was a little surprised to see that.
Cranky: Can you expand on that?
Brian: We launch flights from there that do have a lot of connecting traffic, like Melbourne is very dependent upon connecting traffic.
Cranky: Melbourne, sure…
Brian: We’ve invested in the hub. We’re adding a second Heathrow trip in the summer that’s probably mostly local, but for us, you talk about flying a mainline airplane to Phoenix, the local market is not that great…
Cranky: You have mainline back in Phoenix again?
Brian: Yeah, yeah. [Ed note: I do not see mainline flying loaded in the schedules going forward, but I’m told it was there earlier this year?] And so you do need connections on that to make it work. So for us, it was actually a big surprise for me to see you write that article.
Cranky: Well, when you look at the schedules, a lot of the cities you have, you know, one in Albuquerque and one in Tucson and they come in at different times. And there don’t seem to be defined banks as much. It doesn’t look like a traditional hub.
Brian: I don’t think it can. Even Newark doesn’t have banks. It’s more of an infrastructure issue. We’re pretty gate-constrained in LA right now.
Cranky: Are you really gate-constrained?
Brian: Yeah, we’re investing $600 million in the terminal right now so that’s taking down gates. We don’t have the same kind of problems other carriers are having, but enough that we can’t really concentrate flights any more than we already are. Much like Newark, it doesn’t look like a bank structure, the same thing is true in LA. Even in San Francisco, you see some sign of banks, but the airspace constraints keep you from doing a lot of that too.
Cranky: There’s just a lot more volume in those other cities. You have more frequencies.
Brian: There’s no question we have invested more in San Francisco than we have in LA. Anytime we fly a San Francisco route and an LA route, the San Francisco route over-performs the LA route… higher share of business traffic, more schedule differentiation. We’re absolutely investing more in San Francisco than in LA but we’re not totally ignoring LA either. It’s just a tougher market. For us, LA is much less successful than San Francisco and we don’t have a strategic priority there to build an Asia-Pacific gateway, we’ve already got the best one. So if I’ve got a new long haul airplane to add, some will go to LA, but most will go to San Francisco.
Cranky: So what does the future of LA look like? You haven’t had much growth. I mean, some internationally. But you haven’t had much growth domestically. Of course all the short haul stuff has gone away, so what does the future look like in a few years?
Brian: One of the reasons the short-haul stuff went away is because [Embraer] Brasilias just aren’t an option. SkyWest basically called us and said “we can’t fly these airplanes for you anymore.” So markets like Carlsbad, where that’s the only option…
Cranky: Yeah, you have no choice there.
Brian: Yeah, then there are other markets where the economics of that airplane are the only thing that worked in the market. Other markets we converted to 50-seaters, and others we’ve pointed toward San Francisco and converted to 50-seaters. That was a lot of it. It wasn’t necessarily “de-hub LA.” And domestically there’s no question we haven’t focused on LA. We haven’t invested our growth there. We didn’t really grow as an airline from 2010 to 2014. We shrank overall, but in 2015, 2016 we started to grow again. LA has stabilized, especially taking out the JFK [flights]. Getting out of JFK was more about JFK than LA. Our p.s. service is doing great…. No question LA is a tough market, but we’re still committed to it.
Cranky: And everyone else is growing a lot.
Brian: You know, if I wanted a West Coast gateway and San Francisco was already taken, you can maybe think of LA as an option. I can see why some might want to give that a try.
Cranky: Now San Francisco, what you’re building there is pretty incredible. We were just helping someone the other day who had to go from Hangzhou to Austin.
Brian: Oh yeah, and hopefully…
Cranky: They did book on United.
Brian: That is fantastic. I’m so happy to hear that.
Cranky: But that’s the kind of thing you look at and say “Holy crap, how does this even exist today?” You’re reaching into some pretty deep places at this point. Is it all working?
Brian: It’s meeting expectations. We knew we were a little early. You know we were early into Beijing and Shanghai and those are just wonderful performers for us. They over-performed for so long that even the significant decline we’ve seen in the last three years still means they’re a good performer, just not the stratospheric good performer they used to be. These others are still developmental markets for us, and they’re at expectations. And they continue to grow.
Cranky: Do you want to keep trying more of these or are you in digestion mode right now?
Brian: So it depends how the market develops next year. We generally thought one route a year. This year the challenge we faced was we were trying to get slots in Shanghai for our second service, and we weren’t getting them. It took us like a year.
Cranky: Well, you got it.
Brian: But before we got it, we gave up, and said “OK, this isn’t likely to happen, let’s fly to Hangzhou instead.” So we actually took Hangzhou that was going to be a 2017 add and moved it forward. Then we got slots for Shanghai. So now we have that one we have to launch. We’re still looking at 2017, but we want to average about 1 a year.
So there you go. United still considers LA a hub, a smaller hub for sure and one that’s by far secondary to San Francisco, but a hub nonetheless. What do you think? Does this make sense to you?
And until 2010 AA didn’t call LAX a hub or err “cornerstone”. I tend to be of the opinion that it’s focus city perhaps with a few markets catering to connections but clearly O&D is the bulk of what they are serving.
What happened to the term “connecting complex”? Seem to recall AA used that term publicly throughout the 1990s and into the early 2000s.
“LAX IS STILL A HUB.” Heard that before. DL said the same thing at CVG where they finally took the airport layout out of Sky Magazine.
Cranky, revisited this is 9-12 months and see if the flights decline on UAL out of LAX
I disagreed with you when you said LAX was no longer a hub for UA, and still do. A second-tier hub? Sure. Definitely more along the lines of what IAD is for UA now, but absolutely still a hub. I think UA is smart for not ramping up at LAX and trying to “win” that market.
(Even though I’m selfishly hoping someone comes in with SDF-LAX nonstop.)
Sure, this makes sense, but only in the same way that Cincinnati is still a hub for Delta. If it is politically convenient to call it a hub, then call it a hub. But realistically, these will be the first flights cut in the next downturn.
exactly. No executive would be silly enough to admit a loss of prestige of a city. It would upset customers, airport and government officials, and spur a whole bunch of bad press about competition taking over. If they have significant presence, which they still do, they will keep calling it a hub until it is long past the point of no return
sorry about that
OK the comments are posting but they aren’t showing for me on either Chrome or Firefox.
Dan – Yeah, I have an email in to the postmatic guys. Trying to figure out what’s up. For now, email it is!
Maybe more like a large focus city then a hub. Now, SFO is a hub.
I think the definition of a “hub” is pretty fluid, and it is interesting to me the degree of controversy the UA operation at LAX generates. For instance, I don’t see anyone arguing the fact that Delta identifies SEA and BOS as hubs, or AA @ JFK, yet all are smaller than UA at LAX, none have truly banked flight schedules and all have certain feed-oriented traffic flows, but are not omnidirectional hubs in the sense of ATL, CLT, DFW, ORD or even SFO. So why is the UA @ LAX operation even worthy of such critical analysis as to its hub status? Is there a comparable operation elsewhere in the world for which “hub” status is similarly disputed? I can’t think of any.
I think a lot of it stems from UA/CO merger-related consternation.
It’s a hub, right up until it isn’t a hub…Long term I can’t see UA LAX remaining a ‘hub’
thanks for the post. it’s good that he sat down with you to talk about Los Angeles/San Francisco. Wish you could have gotten a hold of the COO. IMO, Mr. Zontins lacks transparency and is not believable….sounds too much like a politician….sir latest polls show you losing and you’ve laid off some of your staff….politician, no–I don’t believe in polls and i needed to do some re-org to be more effective & efficient.
– Obviously I don’t buy that LA is not a focus city for United. Yes, there may be some gray area as to when an airport is such, but i think numbers would show otherwise. being in willful or ignorant denial does not remove a reality.
Great Q&A Brett! Good straightforward questions that explain the LAX thing once and for all.
BTW you hit a few nerves with the historonic know-it-alls at airliners.net.
Deserve extra props for that hehe
Oh man, this is hilarious. For those who want to read it: http://www.airliners.net/forum/viewtopic.php?f=3&t=1343875
I don’t comment over there, but for anyone searching for my secret plot to profit off United’s LA hub decisions, good luck. Since they apparently don’t like the way I’ve worded my disclosure over there, let me put it this way. I don’t stand to make any money off any airline’s network decisions.
The conspiracy theories are laughable.
Wow, far too many tin foil hats over there…
I’m having issues getting the comments to load, so I’m posting a comment to see if that works.
Good interview, btw.
Don’t see how LAX can be a hub without reasonable service to SEA. UA’s abandonment of that market has led to both DL and AA launching their own service. Really ought to serve it for both O/D and LAX unique flow
Pretty sure UA flies LAX-SEA, or at least contracts it to regionals.
Comments are back up again. Sorry about that.
@Carl… can Delta call LAX a hub without service to ORD? A much larger local market than SEA and Delta has no presence.
We can find examples like this all over. I just wonder why United at LAX is unique as a target of criticism for its hub status? United has significant real estate investment at LAX. Multiple longhaul and regional international flights to three continents. Extensive service to major business markets. 150+ daily UA-coded departures. Crew domiciles. Maintenance facilities. Regional partners. A forthcoming flagship lounge facility. What else does United need (or need to do) for it to be secure in this designation?
Just because it’s smaller than it was during the dotcom bubble, or that other airlines have strengthened their respective LAX positions doesn’t mean United needs to abdicate its label as a hub. It’s a silly premise, IMO, but as devout avgeek I find the analysis very interesting and for that I sincerely appreciate Brett’s work.
In the grand scheme of things, whether an airport is a “hub” or not is rather unimportant. But the debate always makes for fun reading (not unlike the arguments found in DOT dockets).
I am waiting to see whether a United employee email announces the dramatic scale-down of LAX. Although I was surprised to see United didn’t jump on the LAX-Beijing route authority like American and Delta did.
They wouldn’t have stood a chance since they already hold about as many China frequencies as American and Delta combined.
United was also sitting on frequencies for a second SFO PVG flight that It managed to obtain slots for right before the DOT could have revoked UA’s PVG award and given AA and DL each an additional PEK flight.
If UA wants to call LAX a hub so be It. They carry connections just like AA and DL
To Sum up what Znotins said, we have a large, hub at SFO which we dominate so there Is no reason to try to be as large at LAX as we once were . AA and DL can duke It out there
In an interesting turn of events, I’m told that as of today Brian is no longer with United. Things are indeed changing quickly over there.
It makes sense in the sense that….well….considering Mr. Znotins’ position, I wouldn’t expect any verbiage that could be suggestive of and interpreted as a waning commitment to United’s remaining Los Angeles franchise.
Otherwise, there is an old saying that I’ll paraphrase here: Why question what your eyes are telling you.
In my hand is the June, 1999 UA System timetable. The front cover highlights, “LAX – United’s Newest Hub.” The back cover touts nonstop service to 48 U.S. cities and 12 international destinations. The number of combined UA/UAX flights? 379 (200 UA, 179 UAX).
“Brian: ‘One of the reasons the short-haul stuff went away is because [Embraer] Brasilias just aren’t an option. SkyWest basically called us and said “we can’t fly these airplanes for you anymore.” So markets like Carlsbad, where that’s the only option…'”
“Cranky: ‘Yeah, you have no choice there.'”
I’ll point out that UA’s former DEN codeshare partner, Great Lakes, had established an LAX operation prior to the Skywest Embraer drawdown. What a potential boon to Great Lakes if it had had the opportunity assume even a portion of the former Skywest LAX network.
There hasn’t been any company wide communication regarding Brian’s departure, and he is still in the org chart. Maybe something will come out tomorrow if it’s true.
Anthony – This was confirmed to me by the corp comm team at United, so it’s definitely true. Interesting that they haven’t updated anyone internally.
They may have updated someone; just not me!
there may be announced and unnanouced “retirements” coming-up. probably from either side or mutual.
Maybe Brian will resurface at American.
Anecdotally I noticed yesterday that they killed off morning and evening San Antonio flights I have been taking for years. That is highly unfortunate for me… those have disappeared before, but never quite so completely as seems to have happened in October.
This really is a silly debate, but just the kind we AvGeeks love, right?
If you accept the general industry definition of a “hub”, technically all UA has to do is connect one passenger over LAX to qualify.
To those pointing to CVG as a comparison, CVG is still a hub for DL–albeit a small one. I see CVG options connecting from the West Coast to East Coast cities appear in my delta.com search results all the time.
Likewise, I often see connections over LAX appear in my united.com search results–including a (wholly domestic) itinerary I flew on UA over LAX earlier this year.
interesting you published this the day Brian was let go at UA