United Under Attack: America’s Largest Airline Remains Troubled

Oct 14 2013Touting two new markets last week, United released a statement that, well, sounded like any other: “We look forward to giving travelers in Atlanta convenient access to this country’s best and broadest trans-Pacific network at United’s San Francisco hub, and to providing Minneapolis travelers with nonstop service to all eight of our North American hubs [the eighth being Los Angeles].”

But this was not just any new route announcement. People paying closer attention knew the real reason for the new flights: revenge. Atlanta and Minneapolis, after all, are Delta’s two most profitable hubs, ideal retaliation points against its seemingly endless buildup in United’s core markets up and down the U.S. west coast. Delta is competing on ever more shorthaul routes, and some of these shorthaul routes feed its Seattle longhaul hub, which is competing against United’s San Francisco hub for ever more connecting traffic to Asia and Europe.

Imagine Delta’s corporate travel profits between Atlanta and San Francisco, where only Southwest competes with far fewer flights and a vastly inferior inflight product, or between Minneapolis and Los Angeles, where only the even more marginal Sun Country competes. So United’s incursion into two of Delta’s best markets could hurt—and might indeed have the intended effect of showing Delta that any further west coast growth will carry a steep price.

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