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.
