Comment and analysis on all things Charlotte

American Airlines to go back to banked hubs

In the American Airlines/US Airways merger, most of the senior management comes from US Airways. Which is to say that in the future, the combined carrier’s operations will often look more like what US Airways does now than American’s current practices. Case in point: How the airline will operate its hubs.

There are two basic hub operation models:

• Banked hub. The idea is that a bunch of planes arrive all arrive around the same time, allowing for the maximum of connection possibilities. The downside: You need more gates, people and planes to make such an operation work. The lower aircraft usage comes from longer turn times at the hub airport and the need for some airplanes to wait at outstations so that they arrive with the bank of planes and not too early. There’s also a greater potential for things to go very wrong at the hub airport with a banked operation, resulting in big delays.

• Rolling hub. Flights are spread out more evenly during the day. Less flights coming and going at any given time means there’s less congestion, and an airline needs fewer gates, people, and planes. The downside: While rolling hubs minimize airline costs, they also will reduce airline revenue. Passengers generally want to get to their final destination sooner rather than later, and there’s a lot of later involved in a rolling hub, exactly because flights are spread out during the day. People aren’t willing to pay as much for such longer itineraries.

American Airlines has rolling hubs at Dallas/Ft. Worth, Chicago O’Hare, and Miami. US Airways, Delta, and United prefer banked hubs whenever possible (slot-constrained or gate-constrained airports are the obvious exception). That will change sooner however, as American’s new bosses have said that AA will go make to having banked hubs.

From the Dallas Morning News:

“Instead of being scheduled to maximize connections, [a rolling hub] was scheduled to lower costs. And it does lower costs — better asset utilization, better pilot and flight attendant utilization. It is lower cost,” [president Scott Kirby] Kirby told pilots.

“But you give up some of the revenues,” Kirby said, because there are fewer flights during a time window to offer connecting passengers. “You lose all that revenue, and it overwhelms the cost savings.”

Kirby said every airline experimented with rolling hubs during the post-Sept. 11 downturn, “but in just a few months, every airline with the exception of American went back to flying a banked schedule.”

Now, he said, “We’re going to go back to a banked schedule.”

Charlotte impact: How does this impact CLT you ask, as US Airways’ operation here are already banked? If it takes more planes to operate the combined airlines’ Dallas/Ft. Worth and Chicago O’Hare operations, that leaves less aircraft available for future growth here in Charlotte.

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