ANALYSIS: United network at regional junction

Washington DC
This story is sourced from Pro
See more Pro news »

United Airlines is on the brink of major changes. It will begin reducing the number of 50-seat regional aircraft in exchange for 76-seat aircraft beginning next year, a move that will have ripple affects on its network.

The Chicago-based carrier will add at least 70 Embraer 175s by 2015, with 40 ordered by regional carrier SkyWest Airlines on 21 May and 30 ordered by United itself in April. The number could increase to 110 if the airline takes its 40 options for the type.

United will have to reduce the number of 50-seat or less regional aircraft in its fleet with these new aircraft. The joint agreement that its pilots ratified this past December outlines a cap of 450 regional aircraft by 2016, with 255 larger regional aircraft with up to 70 or 76 seats and the remaining 195 smaller aircraft - from 394 small aircraft at the end of March.

United regional fleet, 31 March

United Airlines

By Flightglobal's calculations, United will have to reduce the number of up to 50-seat aircraft at a rate of about 2.7 for every one E-175 in order to achieve the cap. The falls to 2.3 50-seaters for every one large regional aircraft if the 11 Bombardier Dash 8 Q400s that will be added to the Express fleet this year are included.

"Right now we have too many 50-seaters that we want to upgauge to 70- or 76-seaters," says Ron Baur, vice-president of fleet at United, onboard the airline's first revenue Boeing 787 flight since January on 20 May. He declines to comment on how many 50-seaters the airline plans to remove from its regional fleet.

United's network will change as the number of aircraft in its regional fleet shrinks. Regional jets with 50 seats or less fly from all of its hubs, though they are used on more than half of all departures from Cleveland Hopkins International and Houston Intercontinental, according to Innovata FlightMaps Analytics.

Innovata FlightMaps Analytics

Brian Znotins, vice-president of network at United, says that the upgauging associated with the regional fleet restructuring will result in fewer frequencies on certain routes but declines to comment on any changes to the network, on the 787 flight.

Second tier hubs like Cleveland could be disproportionately impacted by upgauging. Small regional jets operate nearly 55% of United's departures from the airport and the majority of those flights are on routes to destinations that are also served from the airline's other hubs, according to FlightMaps.

United routes from Cleveland, June 2013

Innovata FlightMaps Analytics

"As long as Cleveland remains economically viable, it will remain a hub," says Znotins when asked about the future of the hub. He adds that there is strong support for the hub from the airport and community.

Other airlines have reversed course on similar promises. Executives at Delta Air Lines said that it would keep all of its hubs in place when it merged with Northwest Airlines in 2008.

Now in the midst of its own regional fleet upgauging, the Atlanta-based carrier is drawing down its Cincinnati and Memphis hubs - two operations that have eerie similarities to Cleveland. These include a large percentage of flights flown by small regional jets, a predominantly domestic network and catchment areas that overlap with other Delta hubs.

Delta routes from Cincinnati and Memphis, June 2013

Innovata FlightMaps Analytics

"Most of those people are connecting on Memphis to other places," said Glen Hauenstein, executive vice-president of network planning and revenue management at Delta, during an investors day presentation on the regional fleet restructuring in December 2012.

"Now all of those cities are redundant to cities that are served nonstop out of Atlanta, where we also fly 50-seat RJs [regional jets] from Atlanta to Birmingham," he continued. "We believe that by eliminating the 50-seat regional depth service to between Birmingham and Memphis and up gauging the Birmingham to Atlanta to be on medium size RJs or smaller narrow bodies like the [Boeing] 717s, we will be able to produce the products that's not only more appealing to our customer base but its much more cost efficient for us to produce."

Znotins has a similar line regarding United's planned upgauging, explaining that it allows the airline to "add more seats with the same cost".

Any major network changes at United are pure speculation at this point. We know that it will begin reducing the number of aircraft in its regional fleet next year but we do not know how that reduction will be achieved except that it will involve the addition of E-175s.

Frequencies will come down in some markets - we have already seen this on routes where the Q400 has been introduced this year. But the amount of frequency reductions that would be needed in order to maintain United's current route network with 108 fewer aircraft would be significant and arguably untenable to the many business travellers who still want schedule flexibility when they book their next flight.