Creating a Hub-bub Over the Skies of America : Airlines: Another kind of carrier warfare, this one over hub cities, has resulted in tighter airport schedules and more frequent delays for frustrated passengers.
What does a late airplane out of Los Angeles--a delay brought on by a mechanical problem--have to do with an airline’s expansion and a hub war in Miami?
Battles for control of hubs in Miami, Chicago, Philadelphia and other cities have been very expensive, as airlines jockey for schedules and frequencies of flights and routes. Flight delays in unrelated markets can often result.
Recently, I checked in for American Airlines Flight 256 going between Los Angeles and San Francisco. It was scheduled to leave at 3:45 p.m. The passengers boarded the plane at 3:25. But at 3:50, the plane was still sitting on the ground.
The pilot announced that there was a small mechanical problem on the four-engine BAE 146 jet, and it would only be a few minutes.
At 4:15, a gate agent came on board and announced the flight was canceled, but that passengers would be put on the 4:45 flight.
Dutifully, we filed out of the aircraft and went to the gate, where the 4:45 plane, American Flight 592--another BAE 146--was waiting.
And we waited. After boarding the plane at 5 p.m., 15 minutes after scheduled departure time, the pilot announced that there was a “small mechanical delay.” Finally, at 5:30, the plane left the gate. Then, due to air traffic congestion, we were further delayed, arriving in San Francisco at 7 p.m.
Was my case an isolated one?
Apparently not.
“It happens all the time on these planes,” the flight attendant on my American flight told me. “It’s unbelievable. My husband flies these planes and he’s yet to have one cycle (a pilot’s one- , two- or three-day flight schedule between cities) where there wasn’t a mechanical delay.”
A look at airline schedules even reflects the anticipated delays related to this aircraft. American Flight 254, a BAE 146, is scheduled to leave at 11:45 in the morning (not a peak time) and arrive at 1:13 in the afternoon--a gate-to-gate time of one hour and 28 minutes. By comparison, USAir Flight 144, a Boeing 737, is scheduled to leave at noon--15 minutes later--and arrive at 1:09, four minutes earlier .
My return flight on American from San Francisco was scheduled to leave at 2:45 p.m. When I arrived at the airport at 2, I noticed that the 1:45 p.m. flight had still not departed. It was a BAE 146. I asked if I could still make it, if it would be leaving before the 2:45 flight.
“Forget that idea,” said the gate agent. “If you have a ticket on the 2:45, hold on to it. We’re putting all the 1:45 people on your flight.”
Not surprisingly, the 2:45 p.m. flight didn’t leave on time. It was also a BAE 146. It was late arriving into San Francisco (a mechanical problem in Los Angeles), and duplicate seat assignments between the 1:45 p.m. and 2:45 p.m. passengers resulted in an additional delay.
I arrived back in Los Angeles at 4:45, an hour later than scheduled.
What does all this have to do with the expansion plans of American Airlines?
Last year, American stepped in and bought up Eastern Airlines’ Latin and South American operations for $423 million. American also built up its hub in San Juan.
Pan Am, which also flies many competitive South American routes, also beefed up its service, and an expensive hub war began.
In order to service the new markets, American found that its fleet was stretched exceedingly thin. While American has more than $20 billion of new planes on order, they could not be delivered fast enough. Thus, American was forced to use some high-maintenance, high-cost and low-reliability aircraft on a few routes.
The same thing happened in Philadelphia, when Midway Airlines opened a hub in USAir territory. There was no brotherly love lost.
Fare wars erupted, fleets were stretched thin and start-up costs for Midway’s new hub went way beyond projections. Those costs contributed largely to the company’s $11.4 million loss in the second quarter of 1990.
Fallout from the hub continued when Midway recently announced a 10% employee layoff and some flight reductions.
And, as USAir discovered when it purchased PSA and entered the California market, having the most flights and carrying the most passengers doesn’t necessarily mean that you can operate profitably.
In the latest quarter, the company lost $75 million. And in August, the airline announced plans to lay off more than 3,600 employees, including 211 pilots.
Two separate sources at American have told me that in July alone, American lost $1.5 million in revenue in the California corridor--revenue that went to other airlines who flew passengers from delayed or canceled American flights.
While it has not been publicly announced, American is getting rid of its BAE 146s on Nov. 1. The aircraft are up for sale, but whether American sells them by that date or not, they will still be taken out of service. For now, American has decided to bite the bullet.
“It was just too costly,” says one American official.
The BAE 146s will be replaced by more reliable MD-80 and Boeing 737 aircraft. That’s good news for California corridor travelers, especially if they happen to be flying on American Airlines.
In Miami, the start-up for American--at least on paper--has been excellent. Load factors are high, and so are profits as the airline flies to 20 cities in 15 Central and South American countries, as well as to its new San Juan hub.
Operationally, it’s a different matter. In order to support all the new flights, the airline had to hire hundreds of new employees. And there have been more than a few hiccups.
Language has been a big problem, as well as maintaining sufficient staff numbers in airport terminals as well as flights.
An example of the confusion: A Miami-to-San Juan flight was canceled due to a mechanical problem. Passengers were then booked on another American flight leaving four hours later. But when the passengers boarded the later flight, which also left 45 minutes after its scheduled departure, the pilot apologized to passengers--not only for the two delays, but because no one on the ground had apparently informed American’s caterer of the earlier delay. As a result, 72 passengers that night would not be receiving a meal.
In Chicago, the hub war has been nothing less than a shoot-out between American and United (the two carriers handle about 80% of all O’Hare traffic). Each airline has been fighting for schedule position at their Chicago hub, and the results could be disastrous to passengers trying to make flight connections.
“It’s a game of chicken and no one wants to blink,” says one FAA official. Under deregulation, neither the U.S. Department of Transportation nor the FAA controls flight schedules. What this means, particularly in a hub war, is that an airline can schedule as many arrivals and departures as it wants in a particular U.S. city.
Last year, however, because O’Hare was becoming congested, American and United agreed to accept certain scheduling restrictions. But in June, American told the FAA that it was withdrawing from the deal.
That’s when the latest hub war broke out in Chicago. According to the latest “schedule,” during one peak 7-to-8:30 p.m. period, there are as many as 40 arrivals scheduled in one five-minute interval--an impossible (and absurd) number.
Delays are, and will continue to be, inevitable, as long as airlines fight it out for turf in the expensive hub wars. Competition, at least in these cases, will not result in lower fares.
