When United first announced that it would shift flying in Newark to focus more on local traffic while Washington/Dulles would be bulked up to handle connections, you may have flashed back to the American-TWA merger. At that time, American said it would focus Chicago/O’Hare on local traffic while St Louis would handle connections. That failed spectacularly, but don’t make the mistake thinking this is the same thing. What United is doing may be motivated by the same reasons (capacity constraints), but this plan is far more likely to work.
When American and TWA merged, TWA was a shell of its former self. It did, however, still have a large hub in St Louis. American, meanwhile, saw gridlock at O’Hare, and it couldn’t add enough flights to satisfy local demand. So it made what may have seemed like a smart decision. It would make O’Hare a local operation while flowing connections over St Louis. It was a different era back then, and connecting flights were cheap. St Louis didn’t have all that much local demand — certainly not enough to support that massive hub — and so the plan failed. The St Louis hub was eventually abandoned.
Now, United is saying it wants to do the same thing in the Northeast, something that’s possible because it has two big hubs post-merger that are very close to each other: Newark and Washington/Dulles.
Newark is gridlocked, and it’s not going to get any better. Seeing no good way out, United is adjusting the operation to focus more on local traffic.
Service will increase in the following markets:
|Burlington, VT||Charleston, SC||Ft Lauderdale|
|Fort Myers||Greensboro, NC||Memphis|
|Nashville||New Orleans||Norfolk, VA|
|San Antonio||Sarasota||West Palm Beach|
At the same time, Key West service will go year-round and Palm Springs will get a seasonal nonstop. Note that all of these are destinations with higher local demand, including the never-ending pit of demand that is Florida. United isn’t running away from low cost carriers here either. Many of these are markets served by Southwest, JetBlue, and Spirit. Why? Because those airlines serve the markets that local travelers want and need. United is doing the same.
Since Newark doesn’t have a ton of room, United has to be cutting from somewhere to fund this growth. Some routes are being cut outright. The 8 daily flights to Baltimore, Des Moines, and Hartford are all being scrapped. Further, flights from Chattanooga, Ithaca, and Scranton will all be shifted from Newark to Washington/Dulles.
What do these flights have in common? They all carry little to no local traffic into Newark. United says it would rather serve local markets from Newark than it would serve connections. That would seem to counter President Scott Kirby’s professed love of high dollar connecting markets like the ones he used to have in Charlotte when he was at American, and the ones he has in Denver now. But the difference is that New York airports are so congested that local fares are only going to climb higher without any meaningful increase in capacity. United is playing to what it knows to be the best strategy in one of the world’s most important air travel markets.
But what about Washington’s Dulles Airport? For years, United has neglected what, to the surprise of many, has actually been one of its best performing hubs. Time and time again people have predicted its demise. I know I’ve done it. I was highly concerned that Dulles would be challenged once US Airways pulled out of Star Alliance and merged with American to make National an even greater powerhouse. But Dulles still serves a very important role. It is THE international gateway from the DC area, and the government traffic alone is enough to sustain a slew of long-haul flights. That area surrounding the airport in Virginia has gone from a backwater to being the home of many headquarters and US bases of operations for foreign companies. The demand is there, and it’s going to be keep growing.
Further, Dulles has room to grow. It has plenty of runway, and with National basically full, growth is going to have to go elsewhere. Dulles stands to benefit. With so much capacity available, United is shifting those three heavily connecting markets to go via Dulles instead. This will not only help support more of the flights that exist today, but they’ll bring high fares. Further, Dulles is the closest thing that United has to being able to hub in the Southeast. It’s a poor alternative to Atlanta and Charlotte, but it can at least pick off some connections around the edges.
Because of the massive local demand alone, Dulles is no St Louis. But the rise of connecting fares from small markets can also help to turbocharge the hub. To me, this small shift feels like a test to see if it can actually work. I am far from convinced that Ithaca and Scranton to Dulles will thrive, but there’s no place for those cities in Newark anymore, so United is looking at plan B.
I suppose the only way we’ll know if this is truly a success is if United decides to actually put any kind of money into fixing up that dreadful terminal experience. The so-called “Temporary Midfield Concourse” that houses all of United’s mainline gates (C and D) has been in place for 30 years. When the airport built the underground train a few years back, it aligned the station to be further away from the terminal since that’s where a permanent replacement is supposed to be built someday.
There are many hurdles to building a new terminal there. The airport authority has been rife with corruption and spends money like a drunken sailor. United has to find a way to keep its costs down there while also making for something that’s better than the barely-passable experience that exists today. If this strategy to shift connections works, and I think there’s a good chance, then I think United won’t be able to ignore the obvious infrastructure problem any longer.