United left New York JFK in 2015, a decision it now regrets.
I covered United’s departure from JFK extensively–
- United Airlines Leaves JFK, Moves p.s. to Newark
- United JFK Employees Say Goodbye to Home, Hello to Uncertainty
- Onboard Video from the Final United p.s. Flight from JFK
- A Review of My First and Last United p.s. Flights from JFK
- Saying Goodbye to United Airlines at JFK
- United Airlines First Class San Francisco to New York JFK
The JFK station was very special to me, particularly in cultivating loyalty to United over the years, and I viewed its abandonment as one of the prime blunders under the crooked reign of ex-CEO Jeff Smisek.
But United Airlines President Scott Kirby now admits the decision to move premium traffic across the Hudson has backfired. In speaking to employees at a closed-door event in Newark, he stated–
I wish I could roll back the clock and change the decision. It was the wrong decision.
No kidding!
As refreshing as it is to hear Kirby admit that, the damage has been done.
Why It Was Foolish for United to Leave JFK
Let’s not forget that competition is fierce in the LAX/SFO-JFK market. United competed with American, Delta, JetBlue, and Virgin for premium traffic. Let’s also not forget that United allegedly lost money for seven consecutive years on the route. Kirby points out that focusing only on the JFK-LAX/SFO routes was penny wise, pound foolish.
The real reason it was a mistake was it let American Airlines in particular go win a bunch of big corporate accounts. People like Disney and Time Warner — two big examples — are corporate accounts that had been United exclusive corporate accounts and not only flew United on the transcon [routes] but flew United from L.A. to Heathrow and all across the country.
He also adds that the JFK was unique in not being price sensitive.
Those are the kind of corporate accounts [where] on-air talent has contracts that say they fly first class. They pay first class fares — it’s completely irrelevant what the price is. … We opened the door and let American in on contracts like that.
To be fair, United did that already when p.s. went from a three-cabin to two-cabin product a couple years earlier.
Kirby to Blame for Smisek Decision
Not sure whether to file in the “don’t flatter yourself” file, but Kirby takes personal credit for United’s departure from JFK, stating–
You can probably personally blame me, at least to some degree, for the fact that United pulled out. When I was at American Airlines, we were consciously trying to push United out of JFK. That was our goal.
AA did aggressively compete at JFK, introducing A321T service featuring a premium-heavy cabin including first class seats in 1-1 configuration.
No Plans to Return to JFK
United will likely not return to JFK. The slots have been given up and have gone up in price. Furthermore, Newark is profitable. But United does hope to claim market share back. When the merger occurred, United’s New York market share (factoring in the huge Newark hub) was 30%. It has now dropped to 26%, something Kirby calls a “big, big drop”.
Newark’s profit is 15%, says Kirby. He claims Delta’s New York margin is only 4% and AA’s somewhere in between. Thus, the goal will be to win back market share by making Newark “the best airport, the best schedule, the best everything for New York.” Good luck…
CONCLUSION
Not a lot of surprises in this latest revelation. A larger profit margin in a captive hub like Newark is not surprising. But it matters much less when market share drops. Noting that the JFK-LAX/SFO market was about much more than those two routes is also not a surprise. Somehow, I feel much more comfortable that with Kirby at the helm United will be making less strategic blunders.
(H/T Brian Sumers)
There’s also the obvious problem that many Star Alliance partners use JFK. A lot of Star Alliance itineraries that have a layover in NYC now require a difficult connection. This also makes award bookings more complicated on partners that have clunky websites.
United Airlines has done some dumb things over the years, leaving JFK Puts United on top of the list of Dumb & Dumer,
Get rid of Cibo at Newark! The trend in New York airports toward that really overpriced, limited choice market for snacks has been terrible (Delta at LGA, JetBlue at JFK and now United at Newark). I flew two premium United transcon flights over the past week and remembered why I prefer flying out of Delta T-4 at JFK.
I think airline exec’s have taken a lot of undeserved credit for the price action in their stocks. There are very few that have actually innovated. Following what Delta does operationally, or copying Spirit’s “charge for everything” philosophy” means you aren’t a complete fool versus showing groundbreaking leadership skills. I’m sure the AA/UA execs just sit there and pat themselves on the backs while they ruin the experience for the customer and their brands at the same time.
I feel airline shares are where they are due to 1) cheap oil, 2) legislators showing no spine & allowing these mergers which has resulted in reduced capacity and competition, and 3) better labor contracts due past poor management (ie bankruptcy after bankruptcy). Airline execs would really earn their insane bonuses if they could actually improve the customer experience while extracting more revenue. But they consistently show they prefer the “gimme more while i give you less approach”.
United is the perfect example of this I think. The only really innovation they’ve had in the last decade is the Polaris improvements….and they show they can’t even manage that correctly with the seat issues, wine shortages, and 95% slippage rates in blanket theft 🙂 As someone has traded the airline stocks pretty actively over the last decade…i really think most of the posters on Flyertalk would make better airline execs than the clowns running them now.
I hate JFK with a passion, so it worked out well for me. It takes me 30 minutes to get to Newark, and 2 hours to get to JFK from my Manhattan apartment. JFK is only convenient for people living in Brooklyn and Queens, and only if there’s no flight from La Guardia that would fit their need. I know many people who feel the same, who will not fly out of JFK, an airport that is simply too far away with too much traffic in between. So thanks to this move, I get to enjoy PS flights out of Newark. (I was only flying out of Newark, and sometimes La Guardia, anyway). The other issue is that UA has no other flights out of JFK, which must have been a bigger factor than the connecting international Star Alliance traffic – after all many star alliance airlines have flights from Newark also, like Lufthansa, Austrian, SAS, TAP, LOT. I’m sure that given the enormous expenses they must have had at JFK, this will work out well in the end.
It’s not all about people in Manhattan. What about the millions living on Long Island, you forgot them. Driving from Long Island to Newark is a two hour torture test at best. The roads are crowded, full of construction, bridges, tolls and then the illogical confusion called the NJ Turnpike figuring out exits and parking lots in and around the airport. Even if people use the LIRR to Penn Station onto the NJTransit to Newark Airport, it now becomes a 3-4 hour trip + allowing for getting there early and you’re talking six hours to feel “comfortable” that you’ve gotten there on time. Then you have to deal with the narrow corridor to get through Security (also TSA-Precheck is not in a convenient end of the check-in area) – it is such a mishmash !! After that one has to make their way through a shopping mall with food stalls, bars, shops and restaurants running down the middle. After you struggle to figure out gate numbers, you’re sitting at small, dim-lit, ugly, dirty, dark gray rugged gates with sour-puss CO agents and people lined up into the already crowded walkways while they line-up in their zone categories. When you have finally made it up to the gate reader you are met with a surly CO agent who will never be smiling. United should have never left JFK, they should have restored international flights (NRT, GIG, GRU, LHR) and improved their transcon Premium service. Jobs lost or employees forced to go to Newark if they wanted to keep their job.
Horrible, horrible decision by Continental.
Hard to see how it was Kirby and the US management who were the brains behind AA capturing all that corporate transcon business ex-JFK since it was the old management that decided to fit their new A321Ts with F cabins as they replaced 767s at the same time UA and DL were only offering J/C as their premium cabin offerings. (Clearly AA captured the Hollywood studios and even put a 3-cabin A321T on the LAX-YYZ nonstop route for a week or so during the Toronto International Film Festival) and new B777s with F cabins on the LAX-LHR route. The only thing Kirby and company did was not to reverse the decision to keep F cabins on planes flying the prime “Hollywood” (ego-sensitive) routes.
It would interesting to me to see how UA would be doing on the PS transcon into JFK given that AA have been consistently developing a better hard product than United (though I can’t stand either airline), and have been doing so for some time now. The introduction of the A321T is light years, relatively, ahead of what UA calls “premium”. Aside from UA’s recent and pathetic attempt at being a world-class airline with the introduction of Polaris – and we all know what a debacle that’s been – would they still be faring alright at JFK? Would those lucrative contracts still be with UA once pax from those companies started flying on AA given the special handling they’d receive at LAX and the better on-board product?
The United terminals at Newark International Airport have one illustrious distinction that I have never seen anywhere else except at halftime during sporting events…men have to line up to use the restrooms, just like women often have to do at many locations. I couldn’t believe what I was seeing the first time I saw it. I went from restroom to restroom, looking for one where men were not lined up, and I couldn’t find one. What is wrong with that airport? In today’s world, how can they have so few restrooms that men have to line up for them? United gave up JFK for this?
United was, is, and always will be the airline that does the least with the most! Just handing over the OD traffic was beyond silly` but it is UA.
I live in Carnegie Hill, on the tony upper, east-side. I fly out of EWR and LGA, but NEVER EVER out of JFK. Newark is SO EASY to get to; why all I need do is to get to Grand Central and hop on the Newark Airport Express busses! Much faster than getting to Idlewild.
LaGuardia is just a short taxi drive away so that’s marvelous, too!
However, you want me to take my Prada luggage and stand on the LIRR Jamaica platforms with all those menacing SAVAGES lurking around me?
And you know of whom I’m alluding to.
I WOULDN’T DARE!
There’s easier ways to commit suicide!
ONLY EWR OR LGA. NEVER IDLEWILD.
And why do they call that swamp Kennedy?
He never lived here! He only cheated on his wife here.
If anything, they should have renamed it, Marilyn Monroe Airport. AT LEAST SHE LIVED HERE!!