Originally Posted by
Saabs
I think they are arguing that they have too many destinations for their size, or too spread out.
Every hub has to earn its keep. UAL has more hubs than its competitors, which produces (at least on paper) the best network in the business. Hubs by their nature are expensive to run. Therefore, they must produce a revenue premium through connecting customers of course but also through originating customers. It is crucial to have a dominating position at a hub so that any challenge to the revenue premium is minimal. When you look at hubs like DEN and LAX, UAL has significant competition. Additionally, DEN is an expensive airport to operate out of and LA is fragmented by multiple airports and plenty of competition. Domestically, IAD is a problem with the increasing avalibility of longer range flights out of DCA. The big spenders in Washington are not going to drive out to IAD if they can go out if DCA. Special Tracking is right, even ORD is questionable. If the new AA is able to operate at a lower cost while providing a superior product (which so far they are), they will beat down UAL in its hometown too. To the point where UAL can't maintain a hub there either. So, while the best network looks good in theory, in reality it is too broad to maintain when parts of it fail to deliver the required revenue premium needed to justify it in the first place.
It really sucks talking like this when we hoped that the merger would provide stability for all of us. Maybe there will be some way to overcome these issues, we will see.