Damn the hubs; nonstop flights ahead for United

United Airlines is reinventing its domestic route map for the coming winter season, with plans to add nearly two dozen new domestic routes that bypass the carrier’s hub airports. It is a gamble in many ways, but with all the historical models essentially useless today the company is ready to try something different and see if it can generate a bit of revenue.

The addition of these new flights represents United’s largest expansion of point-to-point, non-hub flying and reflects our data driven approach to add capacity where customers are telling us they want to go. We look forward to offering customers in the Midwest and Northeast more options to fly nonstop to Florida this winter. 

– Ankit Gupta, United’s vice president of Domestic Network Planning

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Snowbird to Sunshine Service

The peak season from mid-December to mid-January will see as many as 28 daily flights from seven northern cities to four Florida sun destinations. Some of the Cleveland routes will be familiar from its days as a hub for Continental and then United, but the others are new for the airline. Nonstop flights from Indianapolis (IND), Milwaukee (MKE), Pittsburgh (PIT) or Columbus (CMH) to Fort Myers (RSW) are very much outside the realm of normal for United. The routes put the carrier in direct competition with Frontier, Spirit Airlines and Southwest Airlines for the snowbird traffic heading for beaches on Florida’s west coast.

Where things become arguably more interesting is on the LaGuardia and Boston routes. Those markets launch on 6 November, with all four South Florida destinations served. The competition is also notably stronger. Frontier, Spirit and Southwest remain, but are not the only players. Those east coast routes are a major part of JetBlue‘s market and Delta Air Lines competes strongly as well. American Airlines also operates there to a much smaller extent.

At LaGuardia the flights let United make use of its slot portfolio by trimming hourly service to Chicago, a pivot from business travelers to the leisure market. In Boston, however, there’s no compelling need to add more flights other than as a competitive response to JetBlue’s arrival at Newark as part of its similarly nontraditional (i.e. a little crazy) market expansion this Fall. JetBlue added significant capacity at Newark, including its Mint premium service for transcon markets, and now United is responding at Boston. That it has to compete primarily on price rather than on service is less than good for the market.

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Questions about the business case

Thus far the impact of the new route cycle appears to be fares slashed in an effort to fill seats. A year ago the conversation would have been more about the environmental impact of induced demand and dumping capacity into the markets. Today that discussion is joined by questions around the health impact of operating these flights and enabling discretionary traveler flow between crises hotspots.

While the airlines don’t expect to sell all the seats on board at the lowest prices the forecasts for load factors suggest that the flights remain unlikely to turn a profit. Maybe they’re a better option than grounding the aircraft and laying off workers, giving the airline an easier recovery if demand returns.

Or maybe this theoretical schedule will be further trimmed in the coming months. That would be very much in line with how the US carriers have behaved in recent months, putting a lot of options into the market and then aggressively “scrubbing” the schedules to remove the flights that are unlikely to fill.

Do hubs still matter?

In 2018 then President/now CEO Scott Kirby lauded the value of the carrier’s hubs as critical for delivering higher-value traffic, “A hub-and-spoke airline is really a manufacturing company, and it is about manufacturing connections. The more connections you can drive at a hub, the higher profits you drive at that hub, the more customers flow through that hub, and it’s exponential.” But with this new approach the company is skipping connections, shifting its “manufacturing” output to nonstop flights.

When the business travel returns, presumably so will that manufacturing value of the hub connections. Feeding the Boston travelers through Dulles or Newark will help support the international routes and other markets that are more valuable to the United network. But the timing of that return remains spectacularly unclear, especially as many countries are still blocking inbound US travelers. Unless and until the larger picture is addressed expect more “crazy” route maps to emerge as the airlines desperately try now things to keep cash flowing.