Once again this week, United send out a media notice about a new Denver ad campaign that’s meant to try to bolster the airline’s position in the fast-growing market. This isn’t the first time this has happened. You might recall the last one where United took out a local Denver ad during the Super Bowl to subtly slam Southwest’s operational struggles.
The airline is at it again. The new campaign will air digitally in the Denver airport, right around TSA security lines where people are standing around. It’ll also be used throughout social media. The ad focuses on United carrying more passengers in and out of Denver than any other airline. Once again, Southwest is clearly the target.
Now it’s entirely possible that this is just a petty response to a similar Southwest ad campaign as JonNYC on Twitter found, but let’s just assume for a minute that there is actual method to the madness here. Why is United hammering this message in Denver and not elsewhere? Oh sure, I can speculate, but I decided to let Cirium data do the talking.
I started by pulling Department of Transportation (DOT) O&D data which, in the dataset I’m using, is domestic-only. That allowed me to look at local traffic and remove connecting flying over all of United’s hubs. But again, do keep in mind that this is just domestic as you go through the numbers.
Local United 2022 Market Share by Hub
Instead of just United’s hub airport, I looked at metro areas, and that’s what resulted in the numbers above. You’ll notice that in the first four hubs where United has the highest share, United is the largest domestic local passenger carrier… except in Denver where it is second to Southwest.
In the fifth market, United is also second to Southwest, but of course, that’s a different situation. Southwest is a large number one thanks to its enormous Oakland operation while United is mostly concentrated at SFO where Southwest is tiny.
After that, it turns into more of a jumble. In the DC area, United is third behind Southwest at Baltimore and American at National on the strength of its Dulles hub. Dulles, of course, is far more oriented toward international flying compared to the others. I imagine United thinks opportunity to shift share there is low.
Lastly there’s the mess that is Los Angeles where nobody ever wins. United is behind Southwest, Delta, and American, and it’s a lost cause to try to “win” that market for anybody.
Looking at the current positions, you can see how Denver might be the most appealing play. This is the only hub (outside LAX) where United is competing directly with a big Southwest operation at the same airport. If United can swing more share and move into first place, it’ll help it to justify building up Denver even further. That’s a really important hub since United is trying to bolster its domestic network, a place where the coastal hubs don’t have the same impact. And the United Next plan is all about upgauging to bigger airplanes. United needs Denver to keep growing.
The question is, can share be moved? And the answer is very clearly yes. Here’s a look at how domestic local market share has changed in 2022 vs 2019 across all United’s hubs.
Local United Market Share Change by Quarter 2022 vs 2019
The biggest improvement by far has been in Denver. Below that, yes, Chicago has shown movement too, but much of that is simply a gift from American which has given up and pulled back on capacity there. Local share was bound to shift away from American when the airline pulled down flying as it has.
Between United and Southwest, airport advertising is a tougher sell when the primary operations aren’t even in the same airport. There’s just going to be less opportunity to shift in a place like Chicago. The same goes for San Francisco. I imagine that share shift is just based on United starting to restore the SFO hub to a greater extent post-COVID.
That chart, however, is just a moment in time. It does look like things are going well in Denver, but I was curious to look at it over time. The change is significant.
Local Market Share Over Time By Airline
I pulled out many of the 2020 quarters because those were just wacky with COVID, but you do see a continued upward shift for United. In Q4 of 2022, United actually passed Southwest to have the largest share of local traffic. Now, that could be because Southwest spent an all-too-large chunk of Q4 (end of December at least), not flying airplanes. Presumably if it had, Southwest would have remained in first by a slim margin, but that gap has narrowed greatly.
Sometimes, a fight for market share results in fares tanking, but that wasn’t the case here. Pre-pandemic, as United was growing Denver share, its yields were holding steady. After the pandemic, yields have surged. This has happened everywhere but to grow share and keep yields up is the dream scenario.
From the looks of it, share shift is possible, and Denver seems to be a successful effort. We could go much deeper and look at whether this is coming due to a change in the mix of flying or if it’s due to shifts in capacity levels, but let’s save some work for all those paid consultants out there.
The reality here is that United apparently thinks there’s more easy work to be done. After all, putting up some ads in the airport is about as easy as it gets. It has much work to be done after ceding the local market to Southwest years ago, but it is making real progress on that front. A strong Denver is a hugely important component of the future United.