United Airlines may change route map post-coronavirus, says no hub is ‘sacred’
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
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.”
Get Coronavirus travel updates. Stay on top of industry impacts, flight cancellations, and more.
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
Featured image by Edward Russell/TPG.
Sign-up Successful!
Welcome to The Points Guy!
Earn 50,000 bonus miles and 5,000 Medallion® Qualification Miles (MQMs) after you spend $2,000 in purchases on your new card in the first three months of card membership. Plus, earn up to $100 back in statement credits for eligible purchases at U.S. restaurants in the first three months of card membership.
With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.
- Earn 50,000 Bonus Miles and 5,000 Medallion® Qualification Miles (MQMs) after you spend $2,000 in purchases on your new Card in your first 3 months.
- Plus, earn up to $100 back in statement credits for eligible purchases at U.S. restaurants with your card within the first 3 months of membership.
- Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
- Earn 3X Miles on Delta purchases and purchases made directly with hotels.
- Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
- Earn 1X Miles on all other eligible purchases.
- Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
- Enjoy your first checked bag free on Delta flights.
- Fee Credit for Global Entry or TSA Pre✓®.
- Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
- No Foreign Transaction Fees.
- $250 Annual Fee.
- Terms Apply.
- See Rates & Fees
Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.
Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.