A spirited discussion commenced last week on the hub status of United Airlines at Los Angeles International Airport. I argued that LAX remained both a de facto and de jure United hub while Cranky argued that United had abandoned LAX as a hub.
We parsed stats including service reductions, ease of connections, international expansion, and terminal improvements. Ultimately, we both made relatively persuasive arguments, but both arguments were missing a key element.
Gary, politely critiqued my post, noting, “He offers reasons why it’s no longer practical for United to offer the kind of connectivity that they used to, which explains rather than refut[es] the claim that they no longer try to be the carrier in Los Angeles that takes you anywhere (especially intra-California) and that feeds international flights from everywhere. It’s the difference between a connecting hub and a focus city.”
And of course Gary’s last point is correct — really Cranky and I were looking at the wrong stats if thinking about a conventional definition of a hub, which is a point to conveniently funnel passengers between two cities.
I thought the issue was over, but then a reader named RHYS chimed in on both of our blogs with some very interesting stats. Again, I don’t have access to this raw data, but he claims to have consulted the same Diio source Cranky originally did. Here is what he found comparing UA mainline stats between 8/2006 with 8/2016 (essentially, the time period Cranky used in his original analysis:
- UA operated flights are down from 3,486 to 2,984
- Seats are down from 564,117 to 527,950 (6.4% decline)
- Available seat miles (ASM) are up from 1,008,903,166 to 1,080,303,305
All interesting tidbits that offer no compelling indication on UA’s hub status at LAX. But then it gets more interesting–
I used the first quarter of 2006 vs 2016 in comparing T-100 data (all passengers on a flight) versus DB1B DOT data which is local passengers originating as this is the most recent available. In 2006, United passengers through LAX were 43% local versus 57% connecting, where in 2016 the percentage has only shifted to 46% local versus 54% connecting. This largely reflects the loss of local UAX prop service and some flights going to codeshare partners offset by some new international flying in my estimation. Overall it looks like UA at LAX is still very much a hub based on the share of connecting traffic remaining high, LAX is just a 17% smaller hub in 2016 versus 2006.
If these numbers are correct, LAX is still very much a United hub in terms of its share of connecting traffic.
So the bottom line is that Cranky and I were both right, in part. United’s hub at LAX has shrunk from its position of dominance in 2006, even while Delta and American have grown stronger. Nevertheless, 54% of travelers flying United at LAX are connecting, down only 3% from a decade ago. That’s a compelling argument that United’s LAX station is still properly classified as a hub.
But it does bring up another point — if connections are poorly timed (as Cranky argues), then it must only be price that is driving passengers through LAX. It is a given already that LAX is a lower yield market than SFO for United, but by how much…? That’s my next inquiry. If passengers are just flying through LAX because it is cheap, then we may well continue to see a pullback from Los Angeles.