American Airlines has added 20% more departures out of Chicago’s O’Hare Airport this year as compared with last: some 480 flights versus about 400.
The slate includes lovely new destinations, some seasonal, ranging from Hyannis, Massachusetts, to Naples, Italy, and Madrid, Spain, to Idaho Falls, Idaho. But what’s probably more important, especially for those who travel for work, is a beefing up of American’s departures to the likes of LaGuardia Airport in New York and Los Angeles International.
Brian Znotins, American’s senior vice president of network planning, made the case to us this week that O’Hare retaining its status as a so-called “dual hub” airport is a vital weapon in the city’s competitive arsenal. His argument is that most cities either suffer the lack of competition that flows from one dominant airline controlling most of the inventory (Dallas and Atlanta being fine examples), or enjoy more competition (Kansas City or St. Louis) but then suffer from having to connect to many business destinations, a time suck that also presents more risk of delays.
He’s correct, of course. You could even argue that Chicago is the nation’s only “triple hub,” given Southwest’s many destinations from Chicago Midway and how that airline recently has retooled its business model away from offering bargain travel and more towards appealing to those willing to pay higher fares.
We’re close observers of the extensive crew of online aviation watchers and many of them have argued that American’s sudden resurgence of interest in Chicago came only because the city of Chicago has acted on a gate reallocation process that shifted some gates to American’s rival, United Airlines. In the fall, United will gain six gates and American will lose four. That Department of Aviation process is based on how much airlines have actually flown into and out of O’Hare.
Znotins said that this rebuilding has long been in the works and was slow to arrive because travel recovered more quickly in the southern U.S., where American has a hub in Charlotte. That airport charges airlines considerably less to operate than O’Hare, also explaining much of its growth. O’Hare will always have to keep costs in mind; it cannot price itself out of the market in service of the fanciest terminal. Departures matter more than fountains.
American’s 20% growth in Chicago is really a return to where it was before the pandemic, something Znotins acknowledged to us. We’d noted a lack of convenient departures on American to airports like LaGuardia, where there used to be hourly shuttle service. And some popular flights (for the red-eye averse) like the daytime service to London’s Heathrow Airport have gone away this summer.
But Znotins says many will return soon, once the airline gets the much-delayed new planes it has ordered. He said you can expect to see more business class seats on international routes soon and also more single-aisle transatlantic flights on the new A321XLR, which could fly nonstop to cities such as Manchester, England, or reclaim that daytime Heathrow departure.
But here’s the thing about hubs. Half a hub does not cut it when another airline (in Chicago’s case, United) has more departures. You either go whole hog, competition-wise, or back off further into the realm of what airlines like to call “focus cities.”
American has not backed off, which is especially helpful for Chicago given all the rumors in the airline industry about United potentially moving its headquarters to Denver, once its facilities under construction near Denver International Airport are ready. That doesn’t mean United, which long has branded itself as “Chicago’s hometown airline,” would downplay Chicago or remove flights or even move at all, but it could. Better for Chicago to have its eggs in multiple baskets.
Hubs are never guaranteed to be there forever. Just ask St. Louis, Memphis or Pittsburgh, all cities that lost hubs after airline consolidations. Chicago does not want to join that list and that means working well with airlines. Sure, we have a good geographical location for connecting passengers, but St. Louis is a similarly central locale with milder winters.
While American has objected to the timing of the gate allocation business at O’Hare, we had the general sense from this frank airline executive that it was mostly happy with how things were going in Chicago, even though the post of commissioner of aviation remains vacant. Clearly, former Mayor Rahm Emanuel’s runway improvements have mitigated delays. We always see an efficient TSA operation at our big airport, which is not true everywhere. And from various statements, we glean that American seems mostly happy with its renegotiated deal regarding the long-in-gestation airport expansion, now coming on a more cautious timetable.
Of course, all of the above also is dependent on the economy. Znotins is the man who decides which American planes fly where in order to maximize profitability, and he’ll have to react to changes in the market, whether that comes from a decline in discretionary leisure spending (impacting European vacations) or a decline in international tourism due to a perception that President Donald Trump has rolled up America’s welcome mat.
Alarm bells are ringing. United’s earnings report released Tuesday exceeded profit expectations, but the airline still offered an unusual “bimodal” forecast, basically saying there was so much uncertainty in the air, no pun intended, it was planning for two entirely different scenarios given the Trump-induced chaos.
“Either the U.S. economy will remain weaker but stable, or the U.S. may enter into a recession,” United announced, covering its bases.
Neither United Airlines nor American Airlines, nor indeed Chicago, can control which scenario turns out to be the most accurate. If the U.S. demand for flights drops as the economy shrinks, departures will disappear all over the country and new routes and bigger planes will be put on hold.
But Chicago can control where it sits in relation to other U.S. cities and we’re glad to see American has recommitted to a robust schedule in service of O’Hare’s all-important dual hub. We were worried the opposite was on its way to happening.
