United is Getting Aggressive in Denver, and It Appears to Be Working

Southwest, United

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

DOT O&D Data via Cirium

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

DOT O&D Data via Cirium

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

DOT O&D Data via Cirium

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.

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28 comments on “United is Getting Aggressive in Denver, and It Appears to Be Working

  1. The expansion on A concourse at Denver is a big game changer for United. They have their own dedicated international gates that can accommodate 3 wide bodies at once. Soon enough they’ll have most on A con once Frontier is pushed down to the east end ground load gates

  2. So how are both Southwest and United claiming they’re the number one airline at Denver? I noticed the Southwest fine print said 2011 through 2021, and United said 2022, but Cranky’s data still shows Southwest as number one in 2022. Who is actually the biggest carrier here?

    1. Jacob – Well, remember, my data doesn’t include international, so I’m sure when you throw international on top, United probably found a way to win.

    2. This has the appearance of painting Southwest as ‘unreliable’ even in their ads…
      I think they might have pounced on any metric….that appears to mislead and thus paint Southwest as untrustworthy

  3. Just one market pair, but as a long time Delta flier, I was mystified by DLs seeming pullback from competing MSP-DEN, even as travel surged after COVID restrictions lifted.
    DL seems to be coming back in terms of schedule going forward, but it was a year+ of days with DL in third in terms of frequency and seats. And to have your last flight of the day out of Denver 4:30 pm many days during ski season? C’mon, what, Delta?

  4. Is being #1 (however you choose to measure it) really what they need to be advertising?

    Many passengers can’t easily shift from flying certain carriers (whether company policies, international travel, specific destinations), and of those that can choose, I think passengers care more about reliability, service quality, punctuality, better schedules, and of course price, rather than just being #1.

    And I don’t know if it is something that needs to be pursued anyway. Being #1 sounds nice, but running a better operation and of course profitability should be more important.

    1. I think he’s showing that DEN is the only place among United’s top 6 metro markets where UA and WN compete at the same airport. Hence small differentiators can make a bigger difference.

      I don’t know whether being the largest airline would sway me but I do know that having seat assignments and the ability to upgrade to an economy plus seat would certainly sway me toward United at every possibility in Denver.

    2. I’m not a marketing guy, but my guess is that marketing their #1 status is meant to evoke, among other passengers’ airlines, a sense of “what does everyone else know that I don’t?”

      It’s not hard to run a better operation than Southwest.

  5. I love the analysis but I’m still trying to figure why to exclude international. That’s still O&D traffic, right?

    1. Bill – International data isn’t publicly available in the DOT data. I could pull data from a different source, but then it’s not as good on the ULCC front, so I figured this was better. Internationally, Southwest is not really challenging United except in some beach markets, so it didn’t really hurt to leave it out.

      1. United Intl: 1,147,747
        United Intl Pre-Clear: 384,307
        UAX Intl: 81,741

        Southwest Intl: 326,632

        from flydenver.com traffic reports on the Financials tab

          1. Correct – those intl numbers are total passengers.

            Relative to most other self reporting agencies (ie Port Authority NYNJ) etc, I find that Denver has one of the more comprehensive public reports available. Definitely worth a browse since the detail with which they break down passengers (and cargo) is pretty impressive. The Dec passenger report is 10 pages long!

            Upon further review, the last couple pages breaks down O&D and connecting passengers.

            So… O&D #s for 2022

            Total Passengers
            United: 14,028,148
            Southwest: 12,705,505

            Total Transfer
            United: 18,108,926
            SW: 4,771,702

            Total Intl O&D (included in O&D above)
            United: 664,735
            United Pre-Clear: 113,823
            UAX Intl: 24,767
            SW: 211,467

  6. Was United’s response “petty” or was Southwest’s initial ad misleading with the 12 year old data pull mentioned only in the fine print? United doesn’t normally put operational size in advertising, so I’m thinking Southwest assumed United would let their claim go unchecked.

  7. United has a horrid Monopoly esp to Aspen.. That lets them charge at some peak times over $1400 to go DEN-ASE-DEN. You also have the severely overcrowded TSA-Security area. Last time I had t go thru Denver at 4:45am the security lines were out the door…..

  8. UA is also beefing up their 6am bank. This previously was a few hub flights, but starting in a few weeks it looks like 12 or 13 flights to large line stations too. Those flights will only carry local pax due to the early departure times, adding to the lead.

  9. I would imagine the process for UA to build up Denver to be a much easier task than for Southwest, which would have to weave the additional buildup into its point to point network. There are flights United could they theoretically move from Houston to Denver that accomplishes two goals at once: 1) adds more flights at Denver to help with O&D 2) continues to provide connectivity that used to route through Houston.

    Might be interesting to watch what other UA hubs are impacted by the buildup of Denver.

  10. Find it so interesting that you didn’t include anything about seat factor for Southwest. By using market share only, you’re implying that Southwest’s capacity out of Denver has remained constant, but United is just capturing more of the traffic, which is really misleading

    1. chrisp – Seat factor is irrelevant because we are looking at local share, not total share. All those connections don’t matter. As I suggested, we could look into local vs connecting mix, but that’s a rabbit hole I didn’t bother following.

  11. It looks like UA’s market share increase has not come primarily from WN, but OA. From the last chart UA’s share looks up about 7 points over last five years while WN is down 2 and F9 is flat. Where has the other 5 points come from?

    DEN is UA’s largest hub (larger than ORD according to a recent Cirium article). As a matter of corporate pride, I think UA would want to be #1 in its largest hub just like DL is #1 in ATL and AA is #1 in DFW.

    1. Bravenav – I show United at 33.2% in 2022 and 29.9% in 2019. Southwest is relatively flat. But Frontier is down from 16.0% to 13.6% and Spirit is down from 3.3% to 1.5%. Those are probably the biggest movers. Chances are, Southwest may taking some of that share and then United is taking some of Southwest’s. But either way, United is gaining overall.

  12. I’ll add 4 points

    1) Denver added ~39 gates over the past year, many of which came online in 4Q22. Southwest and United received the lions share of those gates. We probably won’t see “steady state” passenger numbers from both carriers for the short to intermediate term as both carriers ramp up capacity utilizing the new gates.

    2) Overall 2022 passenger numbers (including O&D, connections, international): United – 32.1 million passengers, Southwest 21.1 million passengers

    3) I remember when the Oscar/Kirby early days where they mentioned DEN was United’s most profitable hub, mainly due to the connecting traffic. In that context, I’m not sure if “winning” the O&D market is like the chicken or the egg… With higher connections comes higher O&D traffic or with higher connecting traffic comes higher O&D traffic. In either case, I see United as “winning” regardless of being #1 or #2 in O&D traffic.

    4) Don’t sleep on United’s International offerings. In addition to robust Mexico flights, Japan is returning (I think) along with 3X Germany and 2X London daily. With all that connecting traffic and the continued rollout of the 787, there could be additional intl opportunities (hello Paris?) along with justification for a Polaris lounge one day (fingers crossed).

    1. The Tokyo flight has been back since March. It’s now operated daily by a 787-9, as opposed to a 787-8 pre-pandemic. And yes, currently 2x daily LHR flight, 1x MUC, and 1x FRA – all operated by B789. (LH also flies daily to MUC and FRA, including using their new B789 which I saw parked at the gate yesterday).

      As a DEN-based United flyer, I’d love to see CDG and perhaps AKL. Would also love to see Turkish add DEN as has been long rumored… we could really use a feed in to the Middle East/India.

  13. On point 3… higher connecting traffic comes higher O&D or with higher O&D comes additional connecting traffic… you get the point…

  14. I know the focus is on Denver, but I was surprised to see UA is the biggest in local traffic in the New York metro. It makes sense given the mainline growth in EWR, but I thought they may recently have been number 2, behind Delta. Maybe they were always number one though.

    Where’s Tim when you need him? lol

    1. Mark – Well, it is domestic only but you’re not wrong. DL passed UA in Q3 but UA was ahead in the other three quarters. But looking at 2021, DL was bigger. It goes back and forth.

  15. As a Denver flier, this has been great for me. United is a much better experience than Southwest. When I fly with family, United’s boarding process is miles better. United’s onboard experience is also better than Southwest’s – especially the new 737 Maxes. United’s network is better, too, and I can fly nonstop to places like Norfolk, Savannah, or Hawaii on them. United is more reliable and generally cheaper, too. It’s a winner for me.

    The one note I’d make is that Denver’s original concourses feel crowded and tight. The new areas on the ends of A and B are great, but the old areas do not seem to be built to comfortably manage the amount of people flying during the big banks of flights. I flew out on a 5:30 flight a few weeks ago and didn’t have time to grab any food because of the lines in the terminal (security and food lines). If Denver continues to be this busy, they need to finish the main terminal refurbishment and make sure the concourses can support the food offerings.

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