Could United Close Down Any Of Its Hubs?

As the global health crisis continues to rock the aviation industry, several airlines are revamping their operations in…

Could United Close Down Any Of Its Hubs?

As the global health crisis continues to rock the aviation industry, several airlines are revamping their operations in a bid to limit the damage. With United continually preparing for the worst during these tough times, could the Chicago-based carrier eventually close down some of its hubs? According to comments made by the airline’s president recently, it could be a possibility…

No aspects of United’s operations are safe amid the aviation crisis. Photo: Getty Images

Nothing is sacred anymore

Skift reports that during a first-quarter earnings call on Friday, United president Scott Kirby shared that even though there are no current plans to close hubs, absolutely everything is on the table. To emphasize his point, he said there are “no sacred cows”.

“If we get to the fourth quarter and demand is zero, we will have to make short-term sacrifices,” Kirby said, as reported by Skift.

“We will do that, and we will get our cash burn down to $20 million per day, which obviously gives us an extremely long runway to make sure that we come out on the other side and emerge a great United Airlines together.”

Scott Kirby United
Scott Kirby will officially become United CEO this month. Photo: United Airlines

Industry issues

United’s management understands that demand won’t pick up right away even if effective safety measures are placed, and travel restrictions are reduced. Tourist sites need to be open, and businesses need to be active before passengers start taking to the skies. With it being so hard to predict how long the health crisis will continue, it could be a while before this sort of activity resumes.

With this in mind, airlines could be forced to make tough decisions on the closure of hubs. Even bases that are usually important to carriers could be up for review during these uncertain times. Just this week, British Airways revealed that its operations at Gatwick are in question, despite the airport being a favorite for vacationers in the South East of England.

Therefore, United could also make the reluctant call to drop one or two of its hubs during the current downturn. Kirby added that decisions about hubs and routes will likely come after his firm decides how many staff members will be kept on following downsizing efforts.

United airlines aircraft parked
Most of United’s planes still remain on the ground. Photo: Getty Images

The contenders

If the airline was forced to take action on which hubs to close, it has eight to choose from:

  • Chicago O’Hare
  • Denver
  • Guam
  • Houston
  • Los Angeles
  • Newark
  • San Francisco
  • Washington Dulles

Out of this list, there are some airports that would likely be safe from being axed. Newark is United’s base for the area surrounding New York City. With the airport linking the United States’ most populous city with the rest of the world, this site will likely be prioritized.

United Airlines Aircraft at Newark Liberty International
There are few airlines willing to let go of their New York area hubs so easily. Photo: Getty Images

Additionally, Washington Dulles serves passengers to and from the capital of the US. So, there will always be some sort of regular activity happening at the airport. Moreover, United has been undergoing work to revamp its lounges at this hub. In fact, it has big plans to connect the country’s two economic centers.

As United is headquartered in Chicago, there probably won’t be any closures made at O’Hare. Furthermore, the airline recently announced its ambitious gate expansion at Denver after years of growth at the Colorado capital. Houston is also its only hub in the whole of Texas. Along with this, the airline is partnering with Apple on the redevelopment of its terminal at San Francisco International. Therefore, these four airports should remain open.

United Airlines, Battery Fire, Airbus A320
Denver has become a useful site for United. Photo: Getty Images

A tough call to make

Since United has seen positive results at San Francisco, perhaps its other West Coast hub at LAX could be more of a consideration for closure. The company’s executives have been frustrated about how constraints at Los Angeles have been preventing the airline from growing in Southern California.

Over the last few years, the operator has fallen behind Delta Air Lines and American Airlines when it comes to holdings at LAX. Subsequently, this hub could come under scrutiny if the situation further worsens. Nonetheless, with Los Angeles being the country’s second-most populous city, United will still maintain some sort of operations here.

UAL SFO
With San Francisco proving to be vital for United there could be a shift across the Californian coast. Photo: Getty Images

Additionally, United only flies approximately 300,000 passengers through Guam each year. Therefore, there is not as much to lose compared with the hubs on the US mainland. However, this airport provides some useful connections across the Pacific Ocean. Additionally, since it is a smaller operation, the costs involved in keeping it running are less.

Time will tell

Ultimately, United will be hoping that it does not have to close any of its hubs. Once demand picks up again, it will be a great challenge to regain a strong presence at airports if closures are made. However, if these actions help ensure the survival of the carrier, they could prove to be essential.

What are your thoughts on United’s plans over the next year? Do you feel the airline will eventually close some of its hubs? Let us know what you think of the prospects in the comment section.

Source : Simple Flying More   

What's Your Reaction?

like
0
dislike
0
love
0
funny
0
angry
0
sad
0
wow
0

Next Article

United Airlines Further Reduces Summer International Schedule

Earlier today, United Airlines shared additional route cuts for the summer. The air carrier’s schedule shows that the…

United Airlines Further Reduces Summer International Schedule

Earlier today, United Airlines shared additional route cuts for the summer. The air carrier’s schedule shows that the airline will drop a further 20 routes on top of those that were announced over the previous few weeks. Many seasonal routes to Europe will not continue until at least the end of October. United Airlines is already operating a shortened schedule through May and June.

United Airlines will cut some of its usual routes to Europe, South America, and over the Pacific for summer. Photo: Getty Images

20 routes chopped from the summer schedule

United Airlines has dropped 20 additional routes from its usual summer schedule owing to the coronavirus. At the moment, the airline is operating a drastically reduced route with no likelihood of things improving enough in the next few months to support select routes. United has eradicated the majority of its seasonal routes right through October. However, it will phase in a select few at the start of September.

United will remove some seasonal routes to nine countries until 23rd October 2020. Countries with affected destinations are as follows:

  • Australia
  • Brazil
  • Germany
  • Israel
  • Italy
  • Japan
  • Netherlands
  • Switzerland
  • United Kingdom.

However, some routes to these countries will be stopped for a shorter period. For example, flight UA900 and UA930 between San Francisco International Airport (SFO) and London Heathrow (LHR) will be suspended until 23rd October. However, two flights will operate to LHR from Chicago O’Hare International Airport (ORD) and three from Newark Liberty International Airport (EWR) after 7th September 2020.

SFO-LHR ORD-LHR
Some destinations will go ahead from select US airports. Photo: Great Circle Mapper

United adds to weeks of route cuts

Today’s announcement is just one in a string of route cuts that the airline has had to make on its summer schedule. On 24th April, it announced 12 route cuts to destinations in Europe and South America. These included a flight to Arturo Merino Benítez Airport in Santiago, Chile (SCL) from George Bush Intercontinental Airport, Houston (IAH), and to Porto, Portugal (OPO), from Newark Liberty International Airport (EWR).

Earlier than that, on 20th April, Live and Lets Fly reported that the airline had cut five summer routes. The week before, it had cut four.

2 United Aircraft
United is operating just 10% of its regular schedule. Photo: Bill Abbott via Flickr

United is feeling out the market

In an earnings call for the first quarter of 2020, the airline made it clear that its load factor was not what it once was. President of United Airlines Scott Kirby said:

“Our schedule is down 90%. And we plan for it to stay at that level until we begin to see demand recover.”

In May, United will operate flights to just four destinations on the other side of the Atlantic from three American airports. These routes are as follows:

  • Chicago – London
  • New York – Amsterdam
  • New York – Frankfurt
  • New York – London
  • New York – Tel Aviv
  • Washington Dulles – Frankfurt.

Making schedule cuts early ensures that United is not out of pocket when it comes to canceling routes and issuing refunds. However, making route cuts is not the only way that the airline could save funds.

UA Flight attendants
United will look to other areas of its business to save cash. Photo: United Airlines

Speaking in the earnings call, Scott Kirby said:

“Our responsibility to our employees, our customers, and our shareholders is to make sure that United is here for the long-haul and provides as many good jobs as possible to our people…we will make the hard decisions that are required to make sure United survives, is successful and has the [best] jobs possible for our people.”

It seems that for now, these are the last of United’s route cuts. We contacted the airline to see if it would be making further adjustments to its summer schedule, but it was unavailable to comment at the time of publication.

What’s your take on this story? Let us know in the comments. 

Source : Simple Flying More   

This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies.