Tuesday, August 28, 2012

Future United: IAH

Stumbled across a pretty good piece of speculative blogging this morning regarding United's future plans for IAH.  Some you probably already know, some you might not.

United's Hub Capacity Dance. Edward Russell, Airline Business Blog @ FlightGlobal.com

The Chicago-based airline is in the midst of a network realignment that should build on the strengths of its 10 hubs while eliminating the weaknesses. Part of this is a 10% capacity cut at its largest hub in Houston by 2015 that, while officially in response to the local city council's decision to allow Southwest Airlines to build a federal inspection services facility for international arrivals at the city's Hobby airport, is widely seen as a big part of the rationalisation of the legacy Continental Airlines and legacy Untied networks.

New crew bases, increased gate counts and lower airport rental fees in Chicago and Denver all suggest that this capacity shift is happening. First, United said that it will open a Boeing 737 base in Chicago and a Boeing 767 base in Denver with legacy Continental crews, and an Airbus base in Houston with legacy United crews in August. This allows it to bring the Continental 737 fleet, which is larger and younger than the Airbus A319 and A320 fleet, to O'Hare and more larger aircraft to Denver.

Of course, there's nothing new about the 10% capacity cut to IAH, we've already started to see the effects of that, as well as United's terrible PR blunder blaming the City Council's Southwest Airlines decision for changes that were probably already in the works.  What was new, to me, was the addition of an Airbus base in Houston and the probably shifting out of the legacy Continental 737 fleet to Chicago.  This means that, overall, Houston is going to get older, less reliable birds that are lacking in amenities and comfort. Houston is also going to be inundated with the new "slim" fuel-cutting seats that are also, according to some people who have sat in them on international airlines, borderline excruciating if United doesn't decide to accept the extra padding upgrade.  Given United's operational stance of late, I'd say the odds are 30% for them spending extra money for passenger comfort.

From what I can see, these changes portend a drop in the hard product flight experience for UA customers flying out of IAH.  They're going to be put into older, and in some cases woefully under-powered, metal with uncomfortable seats, no chance of getting in-flight wi-fi, a reduced number of flights with in-seat power jacks and worse choices for in-flight entertainment.  While it has been revealed that IAH is going to receive the Nightmare Dreamliner even that is a service reduction, in terms of overall seat numbers.

Given that Houston customers don't appear to be in a conciliatory mood I'm unsure why United would want to focus many resources in that hub, choosing instead to focus on Chicago and Denver where they're being given financial reasons to do so.  You have to think that the IAH-AMS and IAH-LHR planned Nightmare Dreamliner service is going to be directed more to connecting passengers than anyone flying based out of Houston. (Although, it will be a plus to Houstonians should they choose to partake in the service, if the plane is as advertised)

Continental billed IAH as "their largest hub" and spent years throwing Billions of dollars of hard and soft product toward it.  Now that United has taken over the economies of scale have determined that IAH, while still a prominent hub to be sure, will not be the key player in the game that it once was.  Is this attributable to the Southwest/HOU expansion decision as United claims?  Certainly not, but the decision to abandon long-term agreements at IAH certainly didn't help.  So, getting back to the title of this post:  Future United at IAH is certainly going to be much less cutting edge and passenger friendly than present United at the same.  IAH will move from a global hub to a more regional (South America) hub with a noticeable downgrade to the domestic hard product.

Probably not the future the Houston Airport System had in mind when they started this fracas, but a future that they could probably do very little to prevent from materializing.  Given the nature of large companies, these changes have been on the drawing board for a while, City Council and the HAS have just provided United with a scapegoat allowing them to justify it.  That no one is buying into their flimsy rationalization is totally beside the point.

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