In the world of politics, what seems obvious is often only a clever cover for something less obvious. By all accounts, United’s decision to add transatlantic service between Denver and London was a strategic move to challenge Norwegian Air. But is the story actually that United’s new route was a bargaining chip to influence the Denver City Council over a controversial new airport construction project?
United announced its new London route on the same day that UA President Scott Kirby tested before the City Council in opposition to what is known as the “Great Hall” project. The Great Hall project would move security from level five to level six, making room for more retail and concession space. The cost of the project would be $1.8BN and airlines serving Denver would be asked to partially fund it indirectly through passenger taxes.
United opposes the project on two primary grounds. First, it argues that the project is unnecessary. Adding more shops and restaurants to the Jeppesen Terminal is not helpful, because passengers will still need to travel by train to the gate area.
Second, by moving security to the same level as ticketing/check-in, an already-crowded area will become even more crowded. With ambitious plans to expand in Denver (and other airlines sharing the same viewpoint), United argues that the project will only create more congestion.
But earlier this week, the Council approved the project. Construction will begin next summer.
Will United Retaliate?
United was dismayed by this news, stating–
While we as a company are disappointed with the council’s decision, this does not change our commitment to growing United’s presence at DEN. We will continue working with the City of Denver and leaders at Denver International Airport to improve the operational design of the project so that it meets the comfort and security needs of our employees and customers.
Will that change?
Back in the Smisek era, United cut its planned Auckland flight from Houston Bush Intercontinental in alleged retaliation for the Houston City Council’s decision to allow international expansion at Houston Hobby airport across town. Although Southwest only serves a handful of destinations in Latin America, United (foolishly) argued it could not compete.
United also planned a second daily service from Los Angeles to London to begin earlier this year, but eliminated the second flight before it even began, citing weak demand. Could a similar move occur in Denver?
If it does, it won’t be because of the new airport project or competition, but because United could not meet profit targets on the route. Even so, the new Great Hall project will be a convenient scapegoat.
Let’s not kid ourselves–the fact that United announced new service to London the same day that Kirby testified before the City Council is no coincidence. While competing with Norwegian and swaying the City Council are not mutually exclusive policy aims, this construction project helps to explains why United would choose to compete in a market already saturated with seats (British Airways and Norwegian).
Image: Arina P Habich/Shutterstock