In the world of politics, what seems obvious is often only a clever cover for something less obvious. By all accounts, United’s decision to add transatlantic service between Denver and London was a strategic move to challenge Norwegian Air. But is the story actually that United’s new route was a bargaining chip to influence the Denver City Council over a controversial new airport construction project?
United announced its new London route on the same day that UA President Scott Kirby tested before the City Council in opposition to what is known as the “Great Hall” project. The Great Hall project would move security from level five to level six, making room for more retail and concession space. The cost of the project would be $1.8BN and airlines serving Denver would be asked to partially fund it indirectly through passenger taxes.
United opposes the project on two primary grounds. First, it argues that the project is unnecessary. Adding more shops and restaurants to the Jeppesen Terminal is not helpful, because passengers will still need to travel by train to the gate area.
Second, by moving security to the same level as ticketing/check-in, an already-crowded area will become even more crowded. With ambitious plans to expand in Denver (and other airlines sharing the same viewpoint), United argues that the project will only create more congestion.
But earlier this week, the Council approved the project. Construction will begin next summer.
Will United Retaliate?
United was dismayed by this news, stating–
While we as a company are disappointed with the council’s decision, this does not change our commitment to growing United’s presence at DEN. We will continue working with the City of Denver and leaders at Denver International Airport to improve the operational design of the project so that it meets the comfort and security needs of our employees and customers.
Indeed, it isn’t just the new London service that is coming to Denver. United has announced a robust expansion at Denver, particularly to Hawaii.
Will that change?
Back in the Smisek era, United cut its planned Auckland flight from Houston Bush Intercontinental in alleged retaliation for the Houston City Council’s decision to allow international expansion at Houston Hobby airport across town. Although Southwest only serves a handful of destinations in Latin America, United (foolishly) argued it could not compete.
United also planned a second daily service from Los Angeles to London to begin earlier this year, but eliminated the second flight before it even began, citing weak demand. Could a similar move occur in Denver?
If it does, it won’t be because of the new airport project or competition, but because United could not meet profit targets on the route. Even so, the new Great Hall project will be a convenient scapegoat.
CONCLUSION
Let’s not kid ourselves–the fact that United announced new service to London the same day that Kirby testified before the City Council is no coincidence. While competing with Norwegian and swaying the City Council are not mutually exclusive policy aims, this construction project helps to explains why United would choose to compete in a market already saturated with seats (British Airways and Norwegian).
Image: Arina P Habich/Shutterstock
Surely they must mean 1.8 million? Why would it cost 1.8 billion to move security. Silly and typical. If United really wanted to get their attention they would threaten to pull their hub from Denver and move it 🙂
Unfortunately, it is 1.8 billion, and if you saw the current set up of the airport, in my opinion, you’d agree with the airlines. It just doesn’t make sense. As just one example, you can walk into level 4-6 from any of the doors that lead to drop off/pick up, public transportation services, and direct parking. Or, you can get to those floors from below via the elevators in the parking lot. They will have to block access to levels 4-5 for the elevators and doors, and figure out a way to concentrate quick drop off/pick up and public transportation into level 6. And let’s not forget the new light rail which currently arrives at level 4/5. All this is just for dealing with restructuring access from the outside, not to mention the reshuffling security and changing how the flow works from the inside. It’s a flipping mess and a waste of money.
I’m flabbergasted how they can do this without actually building in the sixth level from an open space to an actual floor. What’s going to happen to passengers while all this construction goes on? This is patently absurd and begs the question: “Who shops at a US airport?”
How am I agreeing with a United decision?
DaninMCI, EVERYTHING airport related is expensive…you can’t install a new garbage can for 1.8 million at an airport.
I hope they don’t pull the DEN-LHR flight but this construction project was rejected by all of DEN’s airlines and yet the council still pushed it through. As a Denver resident and airport employee, the logistics of this project are going to make traveling through Denver’s airport unnecessarily frustrating. Moreover, for a price tag of 1.8 billion, you could build an entirely new terminal.
Stupid. On purpose.
Give a politician the ability to spend other people’s money unchecked, this is what happens. IAD spent $1.5 billion on their security pavilion and another $1.5 billion on a one mile train that only serves 3 of 4 concourses. Now, passenger emplacement fees are second highest in USA (thanks to the unaccountable MWAA) and they can’t attract new service because it costs so much. Government run amuck.
There is another factor here in the fact that London is a slot constrained airport. United must use these slots or they would loose them. This used to be used by a third flight from Houston to London but with the downturn in international flying from Houston after the oil downturn the third flight was pulled. Do UA had this extra slot to use, originally the plan was a second seasonal flight from LAX but I guess they saw better profit potential in the Denver market. We will see how it works out but I doubt they will pull it over this airport construction issue. There are very few other cities to use the slit from and they are extremely valuable.
But I think they would have had no trouble filling it from Newark, where the slot came from.
DO you realize Newark is on the east coast and Denver is in the West. People on the West coast want NON-STOP flights to LHR and anywhere else in Europe. What has EWR got to do with it? I would rather connect in DEN and fly 9 hours to Europe than connect in Newark?
All I said was that the Denver slot came from Newark.