In his quest to ascertain the "more fundamental question" concerning United Airlines' restructuring, Mr Thomas (Flight International, 8-14 October) completely misses the reality of the US airline industry: too many hubs.
The fact that Southwest Airlines' market capitalisation exceeds the sum of the top half-a-dozen US hub airlines (as does Ryanair's in Europe) is the key to understanding where the solution lies.
The band-aid approach thus far applied by the US airlines cutting capacity by about 15% does nothing but aggravate their business models because the hub concept precisely depends on maximising connections.
In other words, the travails of the hub airlines do not imply that the hub model is invalid, but rather that overcapacity of hubs is the problem.
If the current 25 domestic US hubs were trimmed to a dozen or so, undoubtedly the financial results would be of another order of magnitude.
The reality, of course, is that this solution will not happen until the Chapter 11 bankruptcy protection options have been exhausted and the Trojan Horse of new domestic codesharing plays itself out, with duplicate hubs being eliminated eventually.
In the meantime, the blood-letting will continue.
Arthur Smith-Vaughan Nicaragua
Source: Flight International
