ABOUT THIS COLUMN
As the merger soap opera rolled into its second year--United and US Airways first proposed the deal in May, 2000--United was tanking. It had lost money for three consec-utive quarters, it was stuck at the bottom of the Transportation Department performance ranking and it was being hammered by Frontier in Denver and American at O'Hare. And what was United management doing? Anything but fixing the sinking ship. Rather than cut weak routes, they jammed more and more small regional jets into United's hub structure. That worsened the airline's on-time performance at its O'Hare hub, thus cascading the delays to United spokes around the world. That, of course, infuriated frequent flyers and led them to defect to other carriers. The more elite flyers who defected, the faster United's traffic dropped and the faster its losses piled up. Goodwin and Dutta decided none of this was their fault. This week's scapegoat? The supposed lack of runways at O'Hare. -- J.B.
BY JOE BRANCATELLI
May 31, 2001 -- Do you know that old definition of chutzpah? A teenager murders his parents and then throws himself on the mercy of the court because he's an orphan.
What follows is the airline equivalent of chutzpah. It is also a nifty little example of why you can't believe a word the nation's major carriers say about flight delays and why no one should listen when they demand we spend more tax dollars on additional runways and new airports.
On April 18, United Airlines announced it would "transition" service in a number of domestic markets, including four routes at its hub at overcrowded, overburdened Chicago/O'Hare. Admitting that the airline "has not been profitable in these markets," United president Rono Dutta explained that "revenues simply are not keeping pace with costs and the outlook is not encouraging."
Faced with this dreary state of affairs, was United ending service on these unprofitable routes? No. Were they even reducing flights? No.
United's solution was far more interesting. Beginning July 9, it will turn over operations in these four unprofitable markets to its United Express commuter division. And while United Express will dramatically slash the number of seats, it will actually be operating more flights between overcrowded O'Hare and these unprofitable cities.
The chart above offers a tidy snapshot of what United and United Express are doing. On four routes that it admits are unprofitable with very little potential, United and its United Express vassal are choosing to clog O'Hare with 36 percent more flights every day even while reducing seats by 39 percent. This outrageous little switch is being accomplished by substituting United Express' 50-seat regional jets for United's Boeing 104-seat 737-300 and 120-seat 737-500 aircraft.
Now here comes the chutzpah part.
On April 25, exactly one week after United announced it would reduce seats while increasing flights on those routes, the Federal Aviation Administration released its long-awaited study of airport capacity. Surprising no one, the FAA noted that O'Hare is one of the nation's most chronically overscheduled airports in the country. In fact, the FAA reported, during good weather, there are 3.5 hours each day when more flights are scheduled to arrive and depart at O'Hare than the airport can handle. During bad weather, O'Hare is overscheduled about 8 hours a day.
United's reaction to the so-called FAA benchmark report was instantaneous. Having just announced United would slash seat capacity while increasing flights in unprofitable markets, Dutta promptly threw himself on mercy of the court of public opinion.
"The FAA's findings confirm the impending crisis: too little capacity to meet soaring consumer demand," opined Dutta. "Key airports around the country must build new runways now." Mr. Chutzpah didn't stop there, adding, "Customer…dissatisfaction will remain high while the infrastructure remains unable to accommodate existing, let alone future, demand."
But wait, my friends, there's still more. Ten days ago, on May 21, United chairman and chief executive James Goodwin got into the act. "Air travelers are facing a crisis fueled by insufficient airport capacity," said Mr. Chutzpah's boss. "We must get agreement on new runway capacity at O'Hare and we must get it now."
I know, I know, you're having trouble digesting this. So let me recap for the intractably sane: United is cutting seat capacity while increasing flights on four O'Hare routes it admits are unprofitable and then its top executives wail about a shortage of runways at O'Hare.
That, my friends, is chutzpah.
Now lest you think I've simply chosen a convenient juxtaposition of embarrassing facts and quotes from the dunderheads who mismanage the nation's second-largest airline, rest assured that the entire recent history of the airline industry is replete with just such duplicity. Airlines at the country's major hubs have systematically strangled airports during the last decade by switching from a reasonable mix of larger, less frequent flights to a suicidal concoction of smaller planes flying wingtip to wingtip.
Think about it. When was the last time you flew a 747 on a domestic route? How many times this year have you flown a 737 on a route that used to be served by a widebody? How many 50-seat jets have you flown on routes that used to be serviced by DC-9s or 727s? Can you remember how many times you've been forced to connect through a hub on an itinerary that once had nonstop service? And when was the last time you had confidence in the scheduled arrival time of your flight?
Two decades after the airlines first began downsizing our jets and running us through hubs, the nation's air-transportation system is nearing collapse. There is absolutely no public will to spend tax dollars for new airports and runways. Business travel is declining because it costs too much and is too often unreliable. And, ironically enough, the airlines aren't making money anymore, either.
Time for a change, fellow flyers. We've had more chutzpah than any two generations of business travelers should be forced to endure.
This column originally ran at biztravel.com. This annotation originally appeared at JoeSentMe.com in December, 2002.
Copyright © 1993-2004 by Joe Brancatelli. All rights reserved.