United Prepares to Lose A Lot of Money In JFK Return

JFK - New York/JFK, United

After nearly five years away, United is finally returning to New York/JFK with flights to both LA and San Francisco. You’ve undoubtedly heard about this, because it’s been written about by anyone who covers the industry, and that’s why I went with this wholly-misleading headline to grab your attention. Oh sure, United is going to lose a lot of money in the near term, but in the long run, this is definitely the right move for the airline.

United’s Big Mistake

When United left JFK in 2016, it gave the short-sighted reason that it had a mega-hub at Newark and JFK just wasn’t necessary. This was unsurprising since it happened under the reign of former Continental CEO Jeff Smisek. From a Continental perspective, Newark was the be-all, end-all. I don’t mean to suggest Newark isn’t a powerful hub, but JFK is still important for a very niche group of travelers.

Original image via Juan Monroy/CC-BY-NC 2.0

You could draw a line through Manhattan and those on one side just don’t want to go to Newark. The further they get into Brooklyn/Queens/Long Island, the less likely they are to even consider Newark as an option. For those traveling under 1,500 miles (or to Denver for some weird reason), LaGuardia is the preferred option, but the perimeter rule prevents nonstops going further than that (except on Saturdays, seriously). For longer trips, JFK is the number one choice.

Does United really care about people flying to Phoenix or Vegas or elsewhere beyond the perimeter? No. It cares about business travelers in the incredibly important markets of LA and San Francisco, both also still considered United hubs last time I checked. Those sweet, sweet corporate deals can hinge on being able to provide nonstop service in that market, and when United walked away, American and Delta really benefited, as did JetBlue. (Alaska? Meh, maybe a little.)

When this all went down, Scott Kirby was still President of American, and he must have done a happy dance. As soon as he went to run United, he knew exactly what being at JFK meant, and so he said he wanted back in. That, however, proved difficult. JFK had no available slots, but probably more importantly it had no available terminal space either. United had traded its JFK slots to Delta for some at Newark (which soon after didn’t matter when slots were lifted there). It left its space in Terminal 7 at JFK to Alaska/Virgin America, which also took over the old lounge. There was no room at the proverbial inn.

The Great Thing About COVID-19

Though the pandemic has been disastrous for the airline industry, here is one bright spot for United. The tanking of demand has opened the door for United to step back in at JFK, though it’s not entirely clear how.

United will operate two daily flights to both Los Angeles and San Francisco beginning February 1. And where did those four slot pairs come from? A United spokesperson confirmed to me that the FAA granted them through the rest of the winter season ending March 26, 2021.

I’m trying to get clarification from the government on just where those slots came from, but since yesterday was a holiday, I wasn’t able to get an answer. I’ll update here when that comes in.

Update 11/13: An FAA spokeperson tells me:

These United slots are allocations for just this season and do not carry historic precedence with them. These slots are granted to United on a temporary basis for winter 2020 only. The available slots were returned by other airlines on a temporary basis under the terms of a waiver of the minimum slot usage requirements for flights impacted by COVID-19. Please see our COVID regulatory relief page, which includes info about slot relief

There is a slot waiver in effect through March 26, so airlines can keep their slots even if they don’t fly them. It would seem rather strange for an airline to surrender slots during that time, so I assume that there may be some mechanism for United to fly slots that are temporarily unused for the winter.

What happens on March 27? Well, United does not currently have access to slots then, but it feels confident enough that it will get them to justify starting the service on February 1. If the slot waiver does, in fact, expire on March 27 and not get extended, it seems likely that United expects to get some slots permanently. The question is… who will give them up? I have no answer for that just yet, but there are plenty of candidates.

A Terminal Problem

Meanwhile, what about terminal space? United is coming right back into where it was previously. It’s somewhat amusing to think that a return to Terminal 7 means British Airways had to give the airline space. I wonder how BA’s good buddy American feels about that. But there’s little question that T7 has the space these days.

Here’s a look at Cirium schedule data showing average daily departures by month from Terminals 7 and 8.

Average Daily Departures by Month From New York/JFK

Data via Cirium

You can see that Terminal 7 had been slowly creeping downward even before the pandemic. Some of that is because as American shrinks, it has more room in Terminal 8 for its partners to move. There’s also just less flying going on in T7, especially in the mornings. Here’s a proposed schedule for February.

Departures and Arrivals by Hour, February 2021, JFK Terminal 7

Data via Cirium

Other than a single ANA flight, the only departures before 3pm are on Alaska. And Alaska has been operating a severely-reduced schedule at JFK since the pandemic began. It remains to be seen what comes back in the long run for that airline.

In the long run, I’d expect we’ll eventually see United over in Terminal 1. Right now, that’s nearly impossible since, as I understand it, it’s not set up for domestic arrivals and there isn’t much room. But there is a plan to re-build Terminal 1 with more gates. With Lufthansa over there, this would be an obvious place for United to go. That, however, is way down the road.

The Flight Plan

United will bring airplanes in the night before, staggered so the first flight can arrive from SF, disembark, be towed off the gate, and then the LA flight can come in.

  • San Francisco 1:30pm –> JFK 10pm
  • Los Angeles 2:30pm –> JFK 10:50pm

In the morning, Alaska’s big departure rush is between 7 and 8, but United goes mostly after that. Again, it staggers so it can use a single gate.

  • JFK 8am –> San Francisco 11:37am
  • JFK 9am –> Los Angeles 12:39pm

The afternoon flights are probably trickier since it comes during primetime, but United will again use a single gate. I tried to ask United whether it will use a dedicated gate or just roam with common use gates, but United did not respond.

  • Los Angeles 7:30am –> JFK 3:50pm
  • JFK 5:10pm –> San Francisco 8:47pm
  • San Francisco 9:10am –> JFK 5:40pm
  • JFK 7pm –> Los Angeles 10:29pm

This provides two flights in the morning and two in the evening to get a skeleton schedule that will appeal to business travelers. It makes sense, though it’s very thin compared to what others can offer. That is likely because demand is just so low right now.

A Big Ole’ Airplane With Few Seats Onboard

As if it’s not’s daunting enough to go into a business-heavy market when business travel barely exists, United is using quite the aircraft on this route. It will use its newly-refurbished 767-300ERs which have a whopping 46 Polaris-style flat beds, 22 premium economy, 47 Economy Plus, and a mere 52 in coach. That is a big airplane that is VERY premium heavy.

In the long run, this could make sense. After all, American had done well with its lightly-configured A321Ts on the route, but for now, American has walked away from those, instead turning to more densely-packed 777s. United is doing the opposite, but I suppose there is a reason.

United has retired the old 757s that used to fly under the p.s. brand. The airline wants to offer a competitive premium flat bed from the start, but the other 757s are pretty light on premium and are generally used for short international flying more than anything. Meanwhile, these 767s were refurbished to fly to places like London which have huge business demand. Right now, that does not exist, so there’s no reason to fly them.

In other words, these airplanes are sitting around with nothing else to do, so United might as well use them and show off its nice onboard product to the few who fly. It’ll need that in the long run to make up for its lack of frequency. As an added bonus, these 767s have room for containerized cargo, something United noted in the press release which should help toward covering the cash costs.

Still, that’s why I say this will lose a lot of money. But in this case, it’s an investment in the future, an investment that needs to be made now while the window of opportunity exists. United should be at JFK, and it will eventually benefit. It’s just going to be awhile.

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54 comments on “United Prepares to Lose A Lot of Money In JFK Return

  1. UA had no choice but to get back in as it obviously is missing out on expanding its corporate contract base further by not offering JFK to LAX/SFO and Kirby knows the math on these routes really well, given his prior role at AA. Terminal 7 is far from ideal, as is UA’s set up. This time, it will not have a UA Club (that space was converted into an Alaska Air Club), and as pointed out in the article, T7 eventually will be demolished. UA does go back into JFK with a much more competitive product than when it left in 2015. The original “ps” service, launched in late 2003, replacing the tired old UA 767-200s that were the workhorse of the JFK-LAX and JFK-SFO routes for UA, were a cut above in every way, but the competitive landscape was different then. UA’s Polaris hard product is very good, and it puts some pressure on DL, given that the 767s and 757s it flies to LAX/SFO from JFK are becoming tired and worn and do not completely reflect the strong brand ethos DL has. AA will resume the A321T services eventually. Part of the reason for removing them for November was to perform heavy maintenance and clean them up a bit (my last few flights on them were great service wise, but the cabins do show a lot of wear and tear for planes that entered service in 2014-2015). AA has the frequency (notably to LAX) and still retains strong corporate contracts in the NY area, though that is a bit less relevant now as business travel is substantially down. B6 is the one with the most dynamic and cutting edge product in MINT. The only exception is the lack of lounges. I suspect AS will abandon LAX/SFO to JFK flying in the near future. The domestic standard First Class product just isn’t competitive and AS would be better off ceding the market to AA (oneworld partner) and flying SEA (and PDX) so AA does not have to, and maybe SAN too.

  2. CF1/  T7 at JFK is a cute facility and all gates are common use, not dedicated.  The only constraint on gate assignments is aircraft size. All but one gate of the 12 gates can accommodate a 767.  And some of AA’s partners like Cathay have left for T9, and some other foreign flag carriers like Ukraine International and Aerolineas Argentias  have T7 and JFK.2. T1 at JFK is owned and  managed by a consortium made up of LH, JAL, AliItalia and AF, with several other tenant airlines. The consortium has granted an exclusive ramp handling contract to the incumbent FBO, which handles the below the wing work for all carriers at T7.  The exclusivity agreement is over 25 years old.  This is a barrier for UA since their IAM agreement guarantees all ramp work be done by UA IAM ramp employees at JFK and about 10 or 12 other locations versus an FBO.3.  JFK-LAX/SFO is very unique in terms of demand for a Premium Product,with them being by far the largest domestic Premium revenue markets in the country.  In fact, I believe JFK-LAX is the largest overall revenue market in the US.   UA has advantages.   They will have the best Premium Product on board their newly refurbished Premium 767-300s vis-a-vis JetBlue and AA, plus their enormous point of sale and corporate agreement advantage in NYC, SFO and at least in LAX for Jetblue, will be a big plus for them.  In addition, although Delta flies a Premium Product in both markets and has greater point of sale strength in NYC versus JetBlue and AA, they also are much weaker POS in SFO and about equal in POS with UA in LAX as is AA..  (I suspect Delta may respond with 767’s since they have so many that are now not flying.)  And lastly, Alaska’s former Virgin schedule to LAX and SFO from JFK was shrinking prior to covid, and has shrunk much more with covid.  Since they also lack a competitive Premium Product, it appears their better ong term option for the JFK slots may be to fly JFK to SAN, PDX, SJC, etc.4/ I agree UA will lose a lot of money with the start up, but all carriers in the market are also operating at a loss.  The strength of spool up and recovery will be interesting for all, with UA’s international connectivity in LAX and DFO to Hawaii, Australia, New Zealand and Asia possibly becoming a key differianting strength.5/  UA’s many STAR Alliance partners at JFK may supply some slots, and Alaska’s long term decisions may have a bearing.  One also has to wonder if UA has any slots leased to other carriers that they may be able to reclaim.6/ Have to wonder if UA has a financial advantage by operating what are nearly fully depreciated 767-300s versus AA and JetBlue’s much newer A321’s.I suspect long term DL and UA will be the leaders in both markets.  Should be interesting.Sent from Samsung tablet

    1. Interesting analysis. But I’m confused as to why you keep capitalizing the term “premium product”. It’s not a proper term, nor is the term “premium” capitalized unless it’s the proper name of anything. Very confusing.

      1. Also, what connectivity at LAX does United have in Asia that makes this a “differentiator”? United’s flights to New Zealand go from SFO, as do flights to Australia (though there is some connectivity from LAX to Australia too). United serves Hawaii from LAX, but has a more robust schedule at SFO that would actually allow connectivity from the JFK flights (these schedules arrive into LAX after most of the flights to Hawaii save HNL depart). As for the rest of Asia, for connectivity, all of United’s star partners serve JFK so people could just go nonstop. If they insist on flying United, they could either go to Newark and just fly nonstop. Or if they don’t want to go to Newark they could go to LaGuardia and connect in Chicago to most of the same destinations. The LAX flights are mostly reliant on the local traffic.

    2. A lot of good points here, but some that are not entirely accurate. DL, like UA, has mammoth corporate contracts in the NY area as well and can hold its own on LAX/SFO, though I would agree that SFO is a weaker POS origin for DL as it just doesn’t have the tech sector contracts that UA does. T7 is to be demolished at some point so UA will have to find a new home by 2022 at JFK. CX and QF already moved to T8 (not T9, which does not exist) a while back. I suspect AS will decamp to T8 soon as well and reduce its footprint at JFK to just SEA, PDX, and maybe SAN, and fly those routes so AA does not. The Star Alliance airlines assigned to T7 right now are NH and LO. BA (and IB) are preparing to move to T8 in 2021.

      1. FYIThere is active planning in progress to replace T7 with and a major multi gate facility that will be connect T6 and/or extend T6. The plan includes FIS facilities, counters, bag systems and gates which will extend into the entire footprint of T7.   JetBlue will expand into many of the new gates.  But a certain number will be allocated for the use of other carriers, primarily the non BA carriers in T7 and others as a planning assumption.Not sure of the number of gates, but it is sure to be more efficient than T7 since some of T7’s are limited to small aircraft, and it will be a large increase to the total count of T7/T6 gates.The new facility plan will have a phased approach with carriers occupying parts of the new facility as they exit T7, while the exit of BA (and maybe Alaska) to a similar extension of T8  with American as the landlord will allow phasing flexibility.  T7 can be phased in such a way as to close it down in sections to support the phasing.With UA now establishing a beachhead in T7, I have to imagine they will want to be included in the development work for the new facility either as an exclusive use leaseholder in parts, or a common use permit holder.Although a lead financial firm has been selected for the capital raise, I suspect the Project will now shift past 2025, as the BA/AA T8 project will also slide because of the cash is king, cash reserve concerns from covid.  Post covid, many carriers and airport operators may prioritize repairing their balance sheets over starting and/or continuing major “cash burn” projects. With hard work, focus and commitment to JFK and the Port Authority of NY and NJ, I suspect UA will be able to manage through their plan as they presumably incrementally grow a transcon franchise at JFK, which they essentially had prior to 5 years ago.In fact the construction delays may be fortuitous for them.Sent from Samsung tablet

  3. If my preferred airline did to me what UA did 5 years ago to its valued JFK fliers, I wouldn’t go back to them. Loyalty is a two-way street.

    1. I don’t think this is intended for JFK fliers; I can’t imagine UA has much loyalty there. Their NYC loyalty is with travelers for whom EWR is reasonably convenient, and UA’s LAX/SFO service will always be more robust out of EWR than JFK. As Cranky says, this is for LA/SFO-based flyers.

  4. Slight correction AA didn’t fly PDX – JFK, but did fly SEA – JFK though. PDX – JFK was served by DL daily & B6 5X weekly.

  5. SorryCorrection to item 1.Ukraine International and Aerolineas Argentias have LEFT T7 and JFK.Sent from Samsung tablet

  6. A couple things:
    United has always held slots at JFK even if they weren’t operating them themselves. The most recent FAA slot holder report shows UA holding roughly 22 daily slot pairs at JFK. Also, the FAA did not grant a full waiver. Airlines are required to give unused slots back to the FAA a month before operation and those slots would be waived. Those returned slots can also be allocated out to other airlines such as United or cargo carriers who want to grow at JFK, albeit on a temporary basis.

  7. The irony is that Scott Kirby presided over the most valuable non-merger asset transfer in US airline history that gave Delta 1/4 of the slots at LGA for $60 million net net after US, as part of the AA merger, was required to divest virtually all of the DCA slots that it received from DL.

    Then, when another UA mgmt team walked away from JFK and tried to swap slots with DL, the DOJ blocked the EWR part of the transaction but DL was able to continue with its part, receiving all of UA’s former JFK slots.

    AA and AS are probably the most likely to be negatively impacted by UA’s return to JFK while B6 and DL will double down in protecting JFK and DL will very likely expand its EWR network potentially to the west coast as well as in other UA hubs.

    UA will undoubtedly compete for the JFK combination carrier cargo market which DL has had since AA pulled its 762s; AA might be competing for that market with its widebodies now. The value of the 767 and the 777s if AA uses them will be to carry lots of passengers, not cargo or high yields.

    AA’s A321T and UA’s high J 763s are high CASM aircraft, the same strategy that UA used from JFK before and which led to B6 Mint. With a decrease in premium passengers, UA will be doing a lot of free upgrades to win over customers while B6 and DL will fight for all they can get. Just as with the CRJ550, UA moved in the wrong direction in adding premium capacity before covid and the strategy will be even harder to sustain now.

    With indications that UA wants to start service to its other hubs from JFK, all of which are served by DL and B6, fares will plummet even as NY appears determined to hold onto the most onerous covid restrictions in the continental US.

    UA’s domestic network is already under attack with WN’s new service to ORD and IAH, WN’s heavy growth at DEN, and B6′ EWR growth; UA’s ability to fight another market share war will be extremely challenged even as its international network will be heavily reduced until at least the summer of 2022.

    So, yeah, not only will UA lose lots of money but it seems determined to look as much like Pan Am as possible. Perhaps the globe in UA’s livery is not a mistake after all.

    1. I think you mean sales upgrades. There are no CPU between JFK and SFO/LAX – all passengers, include Premier members, need to use either PlusPoints or mile+co-pay.

    2. I don’t like how politicized COVID-19 numbers and restrictions have become. However, it’s worth noting that the CDC specifically breaks out NYC from the rest of NY state (and yes, I don’t think that the NYC includes the suburbs etc, or the metro area, so one could easily quibble, but stay with me here)… Whether one would like to attribute it to so many people in the NYC area already having had COVID-19, or to the tight restrictions in place in the area, or to the color of the mayor’s socks, the CDC reports that NYC’s COVID cases per 100k residents is lower than all but only 5 states and a handful of US territories/possessions (https://covid.cdc.gov/covid-data-tracker/#cases_casesper100klast7days). The states of NY (excluding NYC), NJ, and CT all have COVID-19 rates that are low or better than average compared to many other states as well.

      If COVID-19 rates in the NYC metro area remain low, one has to imagine that at the business community in the NYC area to put enough pressure on the local and state governments to succeed in getting the COVID-19 related travel restrictions and post-travel requirements loosened up a bit, but we’ll see.

  8. @Tim Dunn, USAir’s LGA to DCA swap was the biggest derp in the history of derps. Then again, they couldn’t make money in BOS or LAS either.

  9. Cranky (and all),

    Denver is exempted from LaGuardia’s perimeter rule, as I understand it, because when the current perimeter rule was enacted in 1984, Stapleton was already being served from LaGuardia and thus it was “grandfathered” in, with that exemption transferred over to the new DEN upon ts opening. I believe United and Continental served the market nonstop, and – I think – the original Frontier joined by the 1984 enactment of the rule. The Port Authority and FAA were likely amenable to this grandfathering given Denver’s staus then (as now) as a significant post-deregulation hub.

    Interestingly, before its acquistion by Delta, Western fought the rule legally as it wanted to operate its new 737-300s (as I understand it) between LGA and its Salt Lake City hub, but the courts sided with the Port Authority. For a few years after the acquistion of Western by Delta, Delta did indeed operate a LaGuardia-Salt Lake nonstop on Saturdays only, as allowed by the perimeter rule.

    I beleive the Saturday exemption is because the 1984 perimeter rule’s raison d’etre was to “fight congestion”, and Saturday was the lightest day. (The original 2,000 mile perimeter rule that was first enacted in the 1950s, if I have my facts right, was explicitly enacted to assist in the devleopment of Idlewild – now Kennedy – Airport.)

    It will be interesting to see if the perimeter rule remains in place at LaGuardia with the facility’s almost complete reconstruction of the passenger terminals (as well as the improvements to taxiway circulation patterns, although it remains a 2 runway airport). The terminals are/will be significantly roomier now (with the exception of the small, 6-gate Terminal A/Marine Air Terminal – still a pleasure to use), but accommodating flights beyond the current perimeter doesn’t necessarily mean more passengers as – given the slot restrictions – it would liklely mean swapping existing flights for new destinations, and the equipment used would still likely be in the (at largest) 757 size range, which already serve LGA. (Although LGA can handle 767s.)

    1. The future of the LGA perimeter restrictions are indeed more murkier than ever. NYC’s position as a huge corporate headquarters location might be challenged by even higher taxes and work from home. Less business travel could put the pressure on LGA with a shift in traffic to JFK and EWR which can offer a “full portfolio” of flights. LGA, like DCA, has a higher percentage of regional jet flights, the economics of which don’t work as well in a lower business travel environment. The Port Authority might be forced to make LGA more attractive for airlines and one way would be to lift the perimeter restrictions.
      UA’s desire to be more significant at JFK would be even further challenged if it has to compete from LGA, where it is much smaller than DAL and AAL right now, to the west coast.

      1. “NYC’s position as a huge corporate headquarters location might be challenged by even higher taxes and work from home.”

        I keep reading this comment regarding NYC, but it’s a prediction based on what’s occurring now & not once everyone gets vaccinated. By then Broadway will be operating, hotels will fill, restaurants will be busy, stores will be filled with customers & companies will occupy the CBD once again. If not, then every global city will ultimately suffer the same fate as NYC & that will hinder economic growth. And as for the travel industry goes, forgetaboutit.

      2. Tim Dunn and Sean – I think you are both right, in a way.

        Tim is correct in that business travel might never return to what it was in the “beforetimes”, and part of that is attributable to work-from-home (or “live-at-work”, more accurately) practices. But that is certainly not unique to New York City, and in fact may end up hurting other geographies even more than New York City, because…

        …Sean is right, I feel, in that New York City’s economy is not solely dependent on a business monoculture, as we’ve discussed before on this blog’s comments board, I believe. Like Orlando and Las Vegas, the tourism market will (eventually) return to New York City post-vaccine. (Who doesn’t visit London or Paris because of the latest cholera outbreak, after all?)

        And (as I have also said before on this blog’s comment board, I think) New York City’s obituary has all too often been prematurely written, and – while the City will change, as it always does – I wouldn’t bet on its becoming moribund any time soon. And – honestly – low taxes have never ever been New York City’s forte, and plenty of places will always be “cheaper”, so that is really an irrelevant non-argument (in this context, at least).

        Tim is also correct, however, in noting that the Port Authority may need to lift the perimeter rule to “keep LaGuardia competitive”. However, the competition is – in my opinion – not coming from where Tim thinks it may come from (i.e., the collapse of business travel forcing airlines to abandon less economic regional jets and to make LGA more efficient). Rather, I feel it may stem from the fact that – in the mid-to-long term – much of the closer-in travel markets that LaGuardia serves will be better served by improved rail services. Amtrak has – admittedly – made great strides along the Northeast Corridor, and continues to do so. The metamorphosis of the Eastern Air-Shuttle/Trump Shuttle/American Shuttle and Pan Am Shuttle/Delta Shuttle services from self-contained “show-up-and-go/no reservations required” airline-within-an-airline operations (with dedicated high-capacity fleets and – frequently – second sections of flights) to essentially marketing slogans for anything close to regular scheduled hourly services is a testament to the improvement along the Northeast Corridor. So – in my opinion – LaGuardia will need to lose the perimeter rule simply because it will no longer be needed for technical reasons, for political reasons, and – as I understand it, given improved airliner performance – for technical reasons.

        1. There is a difference between obituary and a shift in demand that reduces population, increases taxes, and allows people to work further from NYC due to technology. NYC just happens to be at the forefront of a huge shift shift away from expensive urban areas that multiple data sources happened during 2020 and esp. from NYC. The Census will provide further insight but we will also see the truth when covid restrictions are eventually lifted. Vote totals already provided some insight into US population shifts.

          Increased rail has always been a dream for some but it requires enormous time and money that no single administration will succeed at achieving. The US didn’t allocate the land for rail infrastructure and passenger rail largely uses the same lines as freight trains which limits its success if there is even sufficient capacity to add passenger service. And the growth of rail still has to overcome the growth of work from home; it doesn’t matter how people go to work when they do if there are much fewer of them leaving their houses.

          Aviation infrastructure is already in place because the US made the decision to make commercial airlines the primary means of intercity common carrier transportation. Highways and personal cars are the primary means of personal intercity transportation.

          and the economic challenges facing airports is that they are all financially unstable because of the reduction in demand. Attempting to grow rail when the economics of existing public infrastructure are already challenged makes it much less likely that rail will move forward now. Airlines can go bankrupt and assets be redistributed but public infrastructure will require that airports have to be bailed out in addition to spending money to build and expand rail.

          No one knows for sure how air travel demand will look post-covid but there are very few people that don’t recognize that there will be permanent reductions in the levels of travel demand. Coupled with major population shifts, it will take decades to rebuild demand levels in cities that have the most to benefit from rail.

          1. Tim – we’ll have to agree to disagree ? (And – in all seriousness – I do appreciate the civil discourse that Cranky allows us to enjoy on his blog!)

            I know we’ve essentially had this conversation before on this blog’s comments board, but I’m just much more convinced than you are that global cities are not solely about business/business travel; and I also still think that agglomeration effects and other advantages of central urban settings will (post-pandemic) still allow cities to remain the most important business centers – not the “only” ones, granted, but the most productive, innovative and environmentally sustainable and efficient. Will there be a reduction in overall travel, and particularly business travel? Likely, yes. Will New York City, Chicago, Philadelphia, Boston, London or Tokyo significantly depopulate? I’m thinking not – particularly in the long run, when I consider the “big picture”, including leisure travel, the arts, and various other economic sectors.

            Yes, “technology” changes things, but cities are very resilient at adapting, particularly global cities like New York City, Tokyo or London. And even in New York City the much-hyped “urban exodus” has also been called “The Urban Exodus That Wasn’t”:

            https://www.scpr.org/programs/on-the-media/2020/09/02/81845/

            …fascinating piece. Needless to say, there are many self-serving real estate interests feeding some media hype about the demise of all cities, and not just New York City.

            As to the decennial United States Census – let’s just say that no statistician worth their salt will ever look at the 2020 U.S. Census – conducted at the height of the lockdowns – and think it accurately reflects actual urban populations or a permanent shift in populations. To do so would be folly. The timing literally could not be worse.

            Bottom line: I don’t think – in the long term – that we will see any “huge shift” away from large urban centers. Perhaps in the near-term, but not in the long run. But yes – I do actually agree with you that travel (business travel particularly) will be altered.

            I am also much more sanguine than you on the future of intercity rail, particularly in the Northeast Corridor. Do I believe that rail will replace aviation entirely? Heck no! (I wouldn’t enjoy reading Cranky so much if that were the case!) And rail will likely not effectively compete with aviation between Chicago and Seattle, or Denver and Atlanta. But there are many urban centers within rail distance of each other that – even without relatively heavy investments in “pure” high sped rail on a European or Asian scale – will benefit from improved rail connections. In the Northeast Corridor, as I stated previously, Amtrak already managed to grasp the majority of the air/rail common carrier market share from aviation, and the Northeast Corridor isn’t even “true” high speed!

            I wouldn’t count on aviation’s legacy infrastructure as being the reason that it won’t lose market share to improved rail, particularly in a post-carbon economy, in the long run.

            1. “…fascinating piece. Needless to say, there are many self-serving real estate interests feeding some media hype about the demise of all cities, and not just New York City.”

              That’s the point I was trying to make as well. A nation of suburbia where many don’t leave home to work, go to school or what have you isn’t a country that is healthy & cant be sustained for the long-term.

    2. Eastern – Thank you for the history. I always wondered how DEN got lucky in this whole thing. It’s not like Washington/National with the beyond perimeter slots… just a seemingly random carve-out.

      As for the perimeter rule at LaGuardia, I’d assume it will eventually go away, but not everyone likes that plan. United and JetBlue will be the two biggest opponents. For JetBlue, it would hurt significantly to have its JFK slots devalued further like that. And for United, it would make a more convenient alternative to Newark. American and Southwest would likely prefer it, but it’s really American that would benefit the most. Delta seems to support it, but it’s a mixed bag for the airline. It would still need a split operation to fund those international flights at JFK, so it’s not all roses there. I just don’t know who wins that battle.

      1. The challenge for the Port Authority is that the economics of the LGA rebuild, one of the most costly airport projects in the world per enplaned passenger, were stretched even with the previous level of demand which was heavily dependent on a high percentage of high value business traffic as well as commuters into NYC from around the country, including Florida. A large chunk of that traffic may never return esp. as NY’s taxes increase faster than the national average. Work from home gives people a reason not to have to live in NY and pay NY taxes and yet work for a prestigious company – and those companies will find it harder to attract people if they force them to spend large amounts of time in an even higher tax, lower quality of life city. San Francisco is facing the same challenge but they have not engaged in the costly airport rebuilding projects that NYC has done. The Port Authority will actually struggle to attract airlines to LGA if demand remains depressed and favoring JFK and EWR due to distance FROM Manhattan and as LGA fees start reflecting the costly rebuild. Slot controls at LGA and JFK might be relaxed and so might the perimeter restriction in order to make LGA a little more attractive.

        The DL-US slot deal shows how easy it is to make a long-term mistake about valuable assets based on even a medium term assessment of much lower demand and revenue. Airlines won’t walk away from LGA but they will use smaller aircraft and trim slot holdings (if slot controls are retained), all of which will put pressure on traffic which increases airport costs per passenger. The low fare model doesn’t work when such a high percentage of costs are fixed regardless of what an airline charges for a ticket.

        B6 and UA’s objections to removing the perimeter restriction are diminished against their own growth in EWR and JFK respectively. B6′ agreement with AA to swap slots and for B6 to potentially take over some of AA’s LGA slots proves they are not locked out. UA’s operation of flights from LGA to Florida argues against being constrained by slots to the point of not being able to add flights to their west coast hubs if they had to. And if slot controls are relaxed at LGA as they were post 9/11, then there is no basis for arguing that any carrier is at a disadvantage. The Port Authority simply has to decide what is in the best interest of LGA to rebuild traffic sufficiently high enough to pay for the billions spent to rebuild the airport.

        1. “A large chunk of that traffic may never return esp. as NY’s taxes increase faster than the national average. Work from home gives people a reason not to have to live in NY and pay NY taxes and yet work for a prestigious company – and those companies will find it harder to attract people if they force them to spend large amounts of time in an even higher tax, lower quality of life city.”

          I keep reading comments such as this & it’s mere speculation & conjecture without solid evidence. NYC despite it’s recent view in the media , is a high quality of life city with elements most cities would love to have even with high taxes. Remember taxes aren’t everything despite the neoliberal fantisy that says otherwise.

          1. Tim and I don’t always agree, but I’m with him on this one: pretty much no matter what, NYC’s position is diminished by the pandemic and rise of remote work. They’ve had significant domestic out-migration for years, and it has accelerated significantly this year (well covered by the NY Times). People put up with a very high cost of living and many quality of life hassles to access the New York job market, and now they’ll be able to do it pretty effectively from elsewhere. Will it still be the most important global city in America? Absolutely. Will it be relatively diminished vs. what it was before the pandemic? Also absolutely.

  10. Cranky – I believe you are correct about Terminal 1’s domestic arrival limitations; I also believe the already-planned eventual reconstruction of T1 (that will take the area that T2 occupies today) will allow for more flexibility and that United might end up there.

    tvmccabe – T7 may be “cute”, but it has an interesting history nonetheless. Prior to the current century, it was the only unit terminal at JFK built and operated by a foreign flag carrier. Originally built by BOAC (later British Airways), it was considered a brutalist “masterpiece”, but I have never personally been a big fan. The BOAC station manager at JFK, Ron Burrage, was a kinda sorta local celebrity in New York and London, always being on hand to greet British notables. Check out the copy in the old ads on this site:

    https://londonairtravel.com/2019/08/07/british-airways-100-years-new-york-jfk-terminal-7/

    …and this great photo with “cleaner” brutalist lines and the BOAC signage as originally displayed on the terminal:

    https://pbs.twimg.com/media/D71u1dDXkAAI6V4?format=jpg&name=small

    Of course, for me the special part of Terminal 7 (the “British Airways Terminal” to those of us of a certian age) was that you could always glance over and see a Concorde there.

    As Cranky mentions, T7 is slated to be demolished as the jetBlue complex of an expanded Terminal 5 is planned to grow onto the T7 site, eventually.

  11. Does anyone know what is going on with Norwegian’s slots? Or South African’s? Or even WOW’s old slots? Are most of them leased? I am sure UA could pickup a slot from one of the litany of foreign carriers that seem to come and go from JFK. It seems as though UA was smart enough to hold onto some slots and just lease them.

    1. Ethan – I think the problem is that even with the random international carriers, none of them have the earlier morning slots that United needs to operate a full schedule. So it would have to find a way to get those regardless. But I don’t think any slots have been abandoned. I mean, WOW’s certainly would have been long ago, but for any airline that still exists, they’ll still be holding them. Both Norwegian and South African have slots to their name, but who knows if or when they’ll use them again.
      They have at least until March 27.

    2. Ethan – true – it appears that (unlike Cortez) they did not “burn their ships” and kept the abilitiy to return, if desired.

  12. Quick question – in the “Departures and Arrivals by Hour, February 2021, JFK Terminal 7”, what are the units? Flights, passengers, or something else?

    I don’t that there will be a meaningful amount of connecting traffic to Lufthansa or anyone else at JFK so the terminal doesn’t really matter for that. LAX/SFO-FRA then onwards from there is always going to be shorter and faster than flying through New York, and EWR has more destinations if you do want to anyway, and the flight timings aren’t useful for most international connections either.

      1. Ah nevermind I figured it out – it’s the total for all days in the month, not per day.
        Unless schedules vary widely day to day, the peak ~105 flights is still less than 4/hour per day, so there still seems to be plenty of space if United wants it, at least for now.

  13. A few comments:
    1) T-7 is not a permanent solution. Even if JetBlue’s T6 work gets delayed by a year or 2, BA and other tenants are still kicked out of T-7 by 2023. So, UA has at most 2 years with the current situation. The new T-1 could be delayed a lot longer than that. So, UA’s choices are to get what’s left over at T-4 when it will still be quite crowded or negotiate with B6 or AA to move in their terminals. I think the most logical solution is for UA to strike a deal with JetBlue for space in T5-7 in exchange for gates at EWR or slots at LGA/DCA.

    2) I’m pretty sure 763 is just a holder right now. They just don’t have enough pricing power to sell that many j seats out of JFK at the moment. Even their EWR flights are full of upgrades. So those flights will be on 752s for a while. Long term, they need more slots to offer more competitive schedule on SFO/LAX. Using slots to fly to ORD is quite silly.

    3) LGA perimeter restrictions aren’t going away anytime soon. If DL is having trouble utilizing its slots, it can feel free to give them up to WN and ULCCs. There will be no shortage of takers.

    4) LGA’s importance in NY area is going to continue to decline due to new WFH policies and move to less decentralized offices. JFK will be a beneficiary of that. EWR will be an even larger beneficiary after new T-1 is built and PATH train extension completes.

    5) UA needs to concentrate on trying to retain as much of its EWR gates as possible. Both B6 and NK have already grabbed additional gates at EWR, which means UA won’t be as large there post-pandemic. UA might only be able to built EWR back to 300 flights a day at EWR (before EWR gets overcrowded again) vs peak 425 a day pre-pandemic. That’s going to be a huge hit to their margins in NYC. And if they are going to add flights to JFK from DEN/IAH/ORD, that will mean fewer flights out of LGA. UA is going to have a bunch of LGA slots that it won’t be able to use.

    1. your comments are spot-on except for number 3.
      AA has been the weakest carrier from NYC for years and has been not only reducing capacity (they are the only carrier that was smaller from NYC than they were 5 years earlier) and their plan to try to swap assets with B6 was based on trying to find better economic uses for its slots.
      If demand for NYC air service remains low, the government, which controls slots will make the decision first to relax slot controls – which would allow new entrants to add flights just as happened post 9/11 and more recently at EWR. AA doesn’t have the financial strength to try to add service it is not operating from NYC and will be the largest source of slots for non-slot holders that want to grow.
      The perimeter restriction is further down the list of things the Port Authority can do to stimulate demand at LGA – but the challenge for the PANYNJ is economic for the airport and Port Authority. Reduced business travel demand will hit LGA the hardest, the perimeter restriction already limits the number of destinations that can operate from LGA, and not getting the level of demand back in line with a level of travel necessary to pay off the huge LGA rebuild will potentially leave the PANYNJ at risk of covering billions of dollars of debt that airlines won’t take on.
      Also, Delta is in a different position at LGA because it is funding its own expansion; it will be much harder for them to walk away but they also have the strongest finances and least competitive challenges nationally so retaining and growing their position in NYC.
      Just as we are seeing in LAX and other major coastal airports, NYC was a divided market between multiple airlines that is being concentrated in the hands of fewer carriers. Delta has the financial strength to restructure its NYC operation to match travel demands that other airlines simply won’t be able to do.

      1. If DL is not going to walk away from its investment, then it can keep flying half full planes around. There is no reason for perimeter restrictions to be lifted just so that DL will lose less many. LGA will continue to get revenue coming in as long as airlines are flying out of LGA. There is no reason those slots shouldn’t go to NK or WN if other airlines are no flying close to their full schedule. And if AA leases a significant # of slots to B6, B6 better be ready to use those slots. I have no sympathy for airlines hoarding slots at LGA when other airlines are ready to utilize them.

        You would actually need to present evidences why having LCCs flying these LGA slots would generate less revenue than legacy airlines flying them.

        1. FC and Tim – I agree with Tim that the Port Authority may likely lift the perimeter restriction at LGA to help its competitiveness, but I think FC overstates any extent to which LGA may lose “importance” in the region. The characteristics of the typical LGA user may alter somewhat, but the facility will certainly not be any less important. I feel this is because:

          • Both overall population and business locations are not decentralizing nearly as much as people think they are – and they likely (in my opinion) won’t in the long-term. Most people that moved out of Manhattan went to – wait for it – Brooklyn. Another borough, and one which is still closer to LGA than most people realize, especially compared with EWR. Will there be some changes? Yes. Enough to likely alter the overall market share (in terms of O&D passengers, not total enplanements) of each of the three major New York City metropolitan area airports? Likely not in a significant manner.

          • Traffic congestion throughout the region is such that LaGuardia will still be significantly closer (in terms of travel time) to Westchester and Connecticut than either JFK or EWR. So, even with some measurable “decentralization”, LGA will still have some geographic advantages, particularly to certain parts of the region, and particularly for flights whose stage lengths are relatively short and ground travel time needs to be minimized.

          • The new EWR Terminal 1 – while a great improvement in terms of the passenger environment – actually has fewer gates than Terminal A (which will be demolished), as I understand it, resulting in a net loss of contact gates at EWR. Terminal A has 35 gates, while Terminal 1 will have 33. Not a huge decline, so let’s just say it’s “a wash”. The Terminal B reconstruction at LGA similarly is a great improvement in terms of the passenger environment and also has the same number of contact gates as the old terminal it is replacing. However, the new Delta Terminal C – again, as I understand it – provides additional contact gates relative to Terminals C and D, which it is replacing. So – in terms of relative importance – I would not say the new Terminal 1 provides a specific competitive advantage to EWR over LGA.

          • It should be kept in mind that the PATH extension to EWR would go only as far as the Northeast Corridor rail connection station at EWR – riders would still need to transfer the EWR AirTrain for access to the terminals. While an improvement in available options, I feel it does not provide any overly significant advantage to EWR relative to the connections provided by the similarly proposed LGA AirTrain, which will connect with both the subway’s Flushing Line and the Long Island Rail Road’s Port Washington Branch at Willets Point. The connection with the Port Washington Branch is key, as – with the soon-to-be-completed East Side Access project – LIRR riders will be able to access either the west side (Penn Station) or the east side (Grand Central) of Midtown. So, again – I would not say the new PATH extension provides a specific competitive advantage to EWR over LGA.

          Just my thoughts!

          1. outstanding insights, I might add.
            I’d love to see any data you have about movements out of Manhattan to other boroughs as well as out of state. I have seen little quantified other than multiple sources saying that movement to LI and out of NY state esp. to the southern US is happening at previously unseen levels.

            I also have seen little indication that people are leaving NYC for NJ. If there is little movement to NJ, then it is more likely that B6′ growth at EWR will just take away market share from UA with little shift between airlines at JFK or LGA.

            1. In the past few years there has been a movement of Manhattan residents to NJ. Most notably to Hoboken, Jersey City do to the PATH train, but also to towns with train service like Montclair, Middletown & other shore points as well as towns in Bergen County.

  14. I, and others, would love to see you list the reasons – with data – as to why you think my conclusion might not be accurate. You might have insight that we, or I, don’t see.
    Airline history in NYC over the past 20 years (two previous downturns), financial and market strength now, overall competitive environment in key markets etc would seem to me to be good points to consider – but you might see others.

    1. If any of your comments were anything other than “hooray Delta” 100% of the time, you might be taken seriously. But you don’t have any ability to separate your crazy undying love for Delta with facts so there’s really not much point explaining to you why Delta’s reliance and buildup of NYC based on NYC Corp traffic over leisure actually leaves them the most exposed. They’re a legacy cost structured “leisure” airline in NYC at the moment with the most slots to cover at loss. United can flow higher revenue traffic over EWR, if needed. AA seems to be working with lower cost, leisure-focused B6 to cover exposure at zero cost to AA.

      Delta has very little of any of that. Just the most slots to cover with the higher cost than the other major O&D competitor at JFK and not great ability to mitigate their corporate traveler reliance unlike others unless it’s more leisure flying where they’re doing it with potentially lower revenue than a flow pax at EWR or higher cost than B6.
      Delta has no true ability to “restructure” their NYC operation to be leisure focused temporarily even if you say it. They don’t.
      What are they going to do? Turn themselves into JetBlue in NYC for 3-4 years until corporate demand returns? Atlantic travel isn’t returning with any strength anytime soon so those JFK slots will eventually need to be used for shorthaul leisure or something and JetBlue will always do better on a profit side there, if only from the cost side.

      You approach every question in terms of “how can I make delta seem like the best” and are so blinded by that that it makes it impossible for you to realize they’re actually the most exposed at NYC in this leisure-dominated environment with the least ability to mitigate via partnerships or flow traffic.

      1. You weren’t asking me, but I think the short answer is: “DL has the most to lose, so they’ll try and hang on at LGA the longest.”

        As for remaking themselves into a leisure carrier for 3-4 years? Yeah, maybe. I doubt it will be that long, but markets like NYC-FL is where the $$$ is, then why not (thoughtfully) redeploy capacity where you can? I haven’t done any kind of deep dive into it, but a cursory glance shows that /some/ business markets are coming back, with many others on ice through year’s end.

        DL also has a lot more flexibility in it’s labor costs than other carriers. A large portion of DL’s workers at LGA are Ready Reserve, and their hours can be flexed up/down as needed.

      2. I’m glad you posted your logic and reasons for believing what you do.
        The simple fact is that United’s average domestic fare from Newark on a local market basis (NYC originating) is HIGHER than Delta’s – in part because Delta has to fly shorter haul flights from LGA due to the perimeter.
        DL and UA both get very similar average fares in many markets; to somehow think that a drop in business traffic will hurt DL but not UA is simply not accurate.
        UA carries a VERY SLIGHTLY higher percentage of connecting traffic thru EWR compared to DL at JFK and LGA – but both are HEAVILY focused on the local market.
        UA has already lost far greater capacity share – which will translate into reduced pricing power – because of B6′ EWR expansion. B6 is going to be larger at EWR and that is bad news for UA.

        Besides, for years we have read how EWR is the easiest airport to get to from lower Manhattan and yet it is precisely lower Manhattan that has figured out how to work from home and many of those jobs will be connected to the internet from Long Island Florida, Georgia, Tennessee and Texas – with occasional stops in the NYC office. Hundreds of thousands of people commuted into NYC for years; that traffic will be slashed.
        And Florida to NYC traffic is high volume but it is not necessarily high revenue. It might be most of the non-hub traffic that remains right now but it is not the basis for sustaining a large operation for any carrier, B6 included.
        And the biggest factor that DL has in its favor is that it is not fighting market share battles in its other hubs. There is no invasion of low cost carriers at ATL, DTW, MSP, SLC or even SEA. DL has the same share of capacity it has had there for years. The real growth in competitive capacity in other airline hubs is coming in EWR (B6), DEN (WN) and new service by WN at IAH and ORD. DL and WN are both growing at MIA.

        NYC is a drag on everyone’s finances. B6 will be hindered because its network is still heavily dependent on the NE. Simply moving capacity from BOS and JFK to EWR doesn’t change much for B6 right now other than it has to fight to win new passengers.

        DL and WN happen to have much stronger balance sheets and are the predators rather than the prey in growing in other carrier markets. DL and WN are the strongest carriers in the industry right now and any industry analyst will say that. WN just doesn’t have much of a presence in NYC or BOS or the NE north of BWI so it is not as impacted as the slow return of demand in the NE. DL, as the financially strongest airline that does have a large position in the NE, will gain market share because it can stick it out and because other airlines will pull back. That is exactly what we are seeing from AA in both NYC and LAX right now. And it is exactly what happened post 9/11 (when DL actually built its JFK hub and acquired the LGA slots from US) and after the 2008/09 financial crisis – when most of DL and B6′ gains came from AA and when UA decided to leave JFK.

        DL had tens of thousands of employees take leaves of absence and more DL employees took early retirement than at any other airline. DL took huge one-time charges to get those employees off the company’s books and into retirement programs -which cost big money. There are still tens of thousands of DL employees that are on voluntary, unpaid leaves. THAT is why DL’s labor cost reduction was the largest of the big 4 airlines, and on a percentage basis, at the top of the US airline industry.

        We can all speculate about what will happen in the future but current data as well as history shows that DL has gained at the expense of other carriers, esp. AA and UA, for the 40 years of deregulation.

        DL has added capacity and routes from AA hubs over the past 10 years; there are scores of routes that DL could add from UA hubs if DL wants to make sure that it gets something from UA for whatever UA gets from DL strength markets. To not believe that won’t happen now given that has happened for decades is naive. DL has grown its revenue by “growing up” into larger industry markets over the past 40 years more than AA or UA have succeeded at “growing down” into DL’s small and medium-sized cities that are the strength of DL’s (including NW’s) network.

        UA might succeed at developing a presence at JFK (however they define success) but the chances are high that they will lose more in revenue in other cities than they will gain from JFK.

        But, Kirby, the architect of the LGA-DCA slot deal, thinks UA will come out stronger so UA will go back to JFK – and then we all get to sit on the sidelines and watch what happens, with some people thinking that this time will be different from all the other times before.

        1. Sorry. Was only talking about the current developing JFK Trsnscon landscape, not 40 years of industry changes. Although disagree with some of what you say in terms on the past is prologue.

  15. I recall that right before United left JFK they still had a “Global First” (or maybe just international first) lounge, even though they’d already ended international service to JFK some time back.

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