Hubs! American Style

It’s been announced by new American Airlines President Scott Kirby that American Airlines will no longer have kinder, gentler hubs in the near future.  Some time ago, American Airlines de-hubbed its hubs some.  Instead of hard peaks and valleys of activity at airports, it allowed flights to spread out more on arrivals and departure.  Labor was more steadily occupied but it also gave passengers less connecting opportunities.  US Airways doesn’t operate this way and Scott Kirby doesn’t want American Airlines operating this way.

So, we’ll see hubs more concentrated with flights at various times.  Why?  Because it earns more money and it’s all about the Benjamins.  Is this bad for anybody?  Nope, not really.  Not a single person is necessarily impacted in a bad way.  It’s just a different style that earns more money.  Do you see a theme here?

Since hubs got mentioned by AA, I thought I would look at their new hubs.

AAL_Map

Everyone always suspects airlines are going to de-hub a location.  Every airline always promises that won’t happen.  It always happens but in the case of American Airlines, it won’t happen for at least 3 years at most locations.  Which, coincidentally, is about the time it usually starts happening.

I’m going to make some predictions on the AA hubs that are going to annoy some people.  First off, I think there are really 3 kinds of hubs today.  They are true network hubs, focus cities and gateway cities.  The first is the traditional major network hub that offers something for everyone.  The second is similar but more “regional” in flavor.  The third is a city where international and domestic flights interchange in large numbers.  It can also be a network hub.

Here is what I think will happen in the case of American Airlines hubs:

Dallas / Fort Worth:  Largely unchanged.  Seriously.  Nothing much to see here except, possibly, a few more flights to a few more destinations.  DFW is both a major network hub and increasingly becoming a gateway hub again.

Chicago:  The same as Dallas.  Exactly the same as DFW.  Nothing more here.

Charlotte:  The same as Dallas and Chicago.  Exactly the same.  There is no reason to change this location and it won’t be taking the place of Miami.

Phoenix:  The same as Dallas, Chicago and Charlotte.  It will remain a major network hub but probably with less focus on international destinations.

Los Angeles:  A gateway city that will become more gateway.  I think we’ll see an increase of international flights here to South America, across the Pacific and to Europe.  It will be the West Coast Gateway for American Airlines.  But it won’t be similar to Phoenix.  The two are not redundant.  Phoenix will feed Los Angeles and vice-versa but they won’t take each other’s place.

New York City:  This will be the East Coast Gateway, a version of Los Angeles.  I think we’ll see increased flying to destinations in the Middle East, Asia and India.  Europe flights will remain largely the same but possibly see aircraft upgauged to large sizes.

Miami:  A gateway city to South America that will be reduced in importance.  I don’t see opportunities growing much here and I don’t see Miami serving the area as a focus city or network hub.  It’s expensive and inefficient to operate that way in Miami.  We will probably see a few regional flights reduced to this city and maybe a few increased flights to South America.  Possibly we’ll see some flights to Africa.

Washington D.C.  This will remain a major regional focus city.  Nothing changes here at all.  A major presence at Washington National, a minor presence at Washington Dulles.

Philadelphia:  I think Philadelphia will be a focus city with international tendencies.  It’s possible that Philadelphia will become similar to Chicago but I think it will be more regional with some international flights.  Not quite a major network hub, not quite a gateway city.  I think there will be some reduction in flights to and from this city over a very long period on a net basis with possibly some European flights increased.

And then there is the gap.  The Pacific North West.  I think that American Airlines will look to establish a second West Coast Gateway city and I think it will be Seattle.  Alaska Airlines is about 3 years away from having an ulcer, in my opinion.  It’s possible they may choose to focus on Portland and that wouldn’t be the worse choice but I think that Seattle has more “name” to it.  Portland, on the other hand, has more available capacity, better weather and is just as close to destinations across the Pacific as Seattle.  Portland is the more “logical” choice but Seattle is the better brand choice.

Either way, a new Gateway City will be focused in that area sometime between Year 3 and Year 5, in my opinion, and it will be a battleground between both Delta and American Airlines with Alaska Airlines and Southwest Airlines suffering as a result.

 

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