United Airlines may change route map post-coronavirus, says no hub is 'sacred'
United Airlines is prepared for the possibility of a dramatic makeover once the coronavirus pandemic is past, including the possibility of cutting one of its eight hubs across the U.S.
None of the Chicago-based carrier's hubs are "sacred" when it looks at rebuilding after the crisis, United president Scott Kirby said during a first quarter earnings call on Friday. Any decisions, however, are a ways off as passenger numbers remain near zero with no imminent signs of recovery.
“Everything is on the table in terms of what we look like," he said. "While we don’t have plans to close hubs, when you say everything is on the table we mean everything — there are no sacred cows.”
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The subject of closing hubs is a touchy one. They require significant investments by airlines, both financially — in terms of facilities and staff — and socially, in terms of support from the local community.
For example, US Airways' decision to downsize Pittsburgh (PIT) — once the heart of its route map — from a hub to a focus city in 2004 left the community with bitter feelings. Those lingered for at least a decade, with the local CBS affiliate in 2014 calling American Airlines' decision to close the former US Airways flight operations center there a "bitter pill."
Bitter pill or not, airlines have closed hubs after each of the past three industry crises. American shut hubs in Nashville (BNA), Raleigh/Durham (RDU) and San Jose, California (SJC), in the years after the 1990 recession; Delta Air Lines closed Dallas/Fort Worth (DFW) and Memphis (MEM) hubs following 9/11 and the Great Recession, respectively; and United closed its Cleveland (CLE) hub in 2014.
The COVID-19 crisis for airlines is worse than each of those past downturns, making it reasonable to anticipate of similar map changes.
Related: How will airlines rebuild their route maps after the coronavirus?
"Some investors were disappointed when one of your competitors insisted that they’re wed to their current hub structure," J.P. Morgan analyst Jamie Baker said during Friday's call when asking if United might close a hub. "Look I get it, it’s a touchy subject — no one ever comes down and goes ‘yeah, we’re going to close Memphis.'"
The competitor Baker referred to is American. Speaking during the Fort Worth, Texas-based carrier's own earnings call on April 30, senior vice president of strategy Vasu Raja said American had "no plans" to close any of its nine hubs following the crisis.
When asked for specifics on the post-coronavirus network plan, Raja said major connecting complexes like Charlotte (CLT) and Dallas/Fort Worth (DFW) will remain but further plans will be decided in a "clean-sheet exercise" that is just beginning.
Related: American has ‘no plans’ to close hubs when it shrinks post-coronavirus
Brett Snyder, founder of the travel service Cranky Concierge, thinks United's Los Angeles (LAX) hub is the "most up for grabs" on its map. The airport, while located in the second-most populous metropolitan area in the U.S., is a center of airline competition. American, Delta and United all consider it a hub, and Alaska Airlines and Southwest Airlines maintain significant bases there.
“They’re going to go back to their basics, and then grow back," he said on how airlines may rebuild the maps after the crisis at the beginning of April.
United is not committing to any long-term changes yet. Unlike other carriers, it will not make a decision on retiring jets until it has a better view of the recovery — a view it shares for any network shake-ups.
“When we emerge from this, United Airlines — and the airline industry — is going to look different,” said Kirby.
Related: United slashes Boeing 737 MAX deliveries amid coronavirus downturn
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- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
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| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
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You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
$325Recommended Credit
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Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.