Originally Posted by
hummingbear
Really, you could make the COL argument about most of our bases. EWR, IAD, ORD are all very expensive. Even DEN is getting out of control. The reality is, we’ve got bases in some of the highest priced housing markets in the country. This is by design. UAL has long known that their operating costs for keeping hubs in the likes of ORD & SFO are way higher than DAL’s in ATL, MSP, etc. They reason they do it is because it gives them direct access to some very high $$$ business travelers that other airlines don’t have. So they keep their operating expenses higher to maximize their revenue stream.
I’ll say that again.
They spend more money than their competitors so they can make more money.
Fair enough. One of the increased expenses of operating in high cost markets is that you have to pay your employees commensurately. That means when your employees lose 15% to inflation, you can’t turn around & offer them 5% on DOS with modest increases over the next few years.
Management can (and should) shift flying to the central bases, but that can only go so far- especially when they’re trying to grow the airline by thousands of pilots. They need people in the coastal bases & that means paying them enough to be there.
If it’s between a big house in TX & a small house in CA, you can staff a base. If it’s between a big house in TX & commuting from LAS, you’ll continue to see unfilled vacancies.
Interesting treatise, but numbers matter in order to make your point.
From your claim that United spends more in it’s hubs, have you distilled this claim from the10K filings? I’m curious about the source.
On the big house vs small house argument, maybe a hypothetical 3,000sq/ft anywhere in the country, to include selling price, taxes, etc provides an Apples to Apples comparison. There are dozens of sites that provide those comparisons which shows the delta. 20 years ago Texas had a lower cost of living (as the joke goes “but you have to live in Texas”) but I’m not certain that holds up today.