United Moving to Re-Bank Hubs: Copying American, Houston Goes First

United’s management thinking is now America West-turned-American Airlines management thinking since United brought ex-US Airways leadership of American over to run the business.

United delayed the launch of its Basic Economy after Scott Kirby moved from American to United to become the airline’s new President. United took the time to rethink Basic Economy in much the same image as American’s planned rollout, which is they we see United taking Basic Economy farther than Delta had ever considered by banning full-sized carry ons as a restriction on the fare.

United hasn’t devalued its award chart in nearly four years. MileagePlus reports up to Andrew Nocella now. Nocella came over with Kirby from American (and US Airways before that). That has me concerned.

Today United announced that latest way they plan to follow in American’s footsteps: re-banking the Houston hub effective October 29.

This effort is called “rebanking.” United has traditionally operated a schedule of ten “flight banks” at Houston, with the hub serving as a connection point for east-to-west routes across the U.S. along with Latin America. With the new effort, United will consolidate existing flights into an enhanced eight-bank structure, connecting customers from all directions, enabling the airline to use aircraft more effectively throughout the entire country.

One key factor in customers choosing an airline, after price, is total flying time. Shorter trips often show up higher in flight search.

So reducing connecting time doesn’t just get customers to their destinations faster when everything goes right, it also increases the likelihood that customers will buy from an airline. The challenge of course is when things go wrong.

The idea is that planes land and are turned around quickly. By compressing flight arrivals followed by departures you’re increasing the number of connections that appear to appeal to passengers.

  • Compared to a rolling hub where flights arrive and depart evenly throughout the day this means more employees handling more passengers at peak times. It also means lulls at the airport where you’re paying those employees to wait for the next bank of flights.

  • This approach more fully utilizes gates during peak times. During irregular operations it’s more likely to cause problems that cascade throughout the system, gates unavailable when planes don’t push back and planes therefore arriving without a gate. Shorter connection times mean more missed flights.

  • Shorter connections also mean less airport shopping revenue for merchants, although there’s a drive towards app-based ordering of food in advance and delivery to gates at many airports which means less time is required for spending money at the airport. There’s less browsing though which does detract from retail sales.


United Club in Houston

There are tradeoffs with a banked hub. Houston is a better candidate than Newark, Los Angeles, or Chicago O’Hare (which American re-banked). We’ll see where United goes next, though Denver is a clear candidate.

Banked hubs were common prior to the airline recession of the early 2000s. A move towards rolling hubs saved on costs. The shift back to banked is an attempt to gain business and earn a revenue premium despite the higher cost in an offsetting low fuel cost environment.

In contrast, airlines like AirTran pioneered a model where ‘people wait on planes’ rather than planes waiting on people. Longer connection times, spead out flights, are lower cost to the airline but costly to the passenger in terms of travel time.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. I am a Houston resident and for the majority of my recent flight searches I can get to any domestic destination quicker and cheaper on a different airline than United, usually American. Wonder if this re-banking will help that.

  2. This does not surprise me given that Kirby came from AA & so his ‘management’ is going to be to copy, exactly, what Doug Parker et al have been doing @ USdbaAA. Next up will be the UA version of ‘going for great’.

    As an AA EXP & PHX hub hostage, I know all about AA’s banked hubs. This means every plane is trying to depart & arrive @ basically the same time-your plane is now #67 for takoff & you’ll get to spend lots of ‘quality’ time in the penalty box upon arrival because there won’t be a gate available. Plus, the added joy of having to choose between a 32 minute connection & doing the OJ dash thru the airport or 4 hour connection-fun (not).

  3. ” Plus, the added joy of having to choose between a 32 minute connection & doing the OJ dash thru the airport or 4 hour connection-fun (not).”

    Totally second this. On a recent MSY-CLT-JFK award itinerary, my choices were 41 min mad dash through the ginormous sprawling CLT or a thoroughly wasteful 2.5 hour one with no lounge access.

  4. Banked hubs look good in theory, but that depends on everything going perfectly which is far from reality.

  5. I usually opt for a longer connection time (within reason), because I am less likely to miss my connection or lose my bag (if I checked one).

    The American DFW hub is really a problem. Since planes board early to avoid late departures, often the plane arrives in DFW early. However, there is no gate available, so the plane often waits 20 or more for a gate. This is very irritating because I could be in the American Express Centurion lounge drinking wine and eating, instead of in my seat on the runway.

  6. Wow, maybe United can also start boarding at T-60 and closing the aircraft doors at T-25. That’ll surely please their customers.

  7. Is this why my connection in Phoenix going into Fresno has always been 40-50 minutes?

    Which always means running because the large plane from the east coast is on one end of the airport, and the ERJs are clear across on the other end?

    Was true when Phoenix was a America West Hub, a US Airways Hub, and now a AA whatever.

  8. “United hasn’t devalued its award chart in nearly four years” maybe true but the whole MP program has been gutted in the last few years

  9. “United hasn’t devalued its award chart in nearly four years” actually when I think about it it’s closer to 3 years I think and also the award routing rules changed massively so it’s a slightly misleading statement

  10. Doesn’t this also mean that during peak times the United Clubs will be even busier than they are now?

  11. “Doesn’t this also mean that during peak times the United Clubs will be even busier than they are now?”

    Oh, absolutely, not to mention the concourses-zoo doesn’t even begin to describe what they look like in PHX & DFW sometimes, which makes the ‘OJ dash’ even more fun 🙁

    FWIW, I think the only ones happy about the re-banking @ USdbaAA are Doug Parker & his minions, but what else is new…

  12. I’ve seen it both ways. Revenue is due to customer satisfaction; no stress.
    The only statistically proven method is to expand the schedule, not compress it. It produces satisfied customers in all situations. AA and DL are not your competition. You are theirs.

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