William P. Hobby Airport

[lockmat]

For some reason, I'm starting to agree with conclusions such as these:

Houston: You Blew It on United Hub

http://www.thestreet.com/story/11572615/1/houston-you-blew-it-on-united-hub.html

In my opinion, Houston airplane travelers may have won, but the Houston economy and employees lost out in the long run.

[Houston19514]

For some reason, I'm starting to agree with conclusions such as these:

Houston: You Blew It on United Hub

http://www.thestreet...united-hub.html

In my opinion, Houston airplane travelers may have won, but the Houston economy and employees lost out in the long run.

The most obvious problem with that analysis, is that United, and especially its Houston hub, will have to compete with Southwest for connecting traffic to Latin America/Caribbean destinations and would have had to do so no matter what decision was made by the Houston city council.

Southwest will fly to those destinations. If not from Houston, then from Austin, San Antonio, Atlanta, New Orleans. Maybe even Oklahoma City. In any case, connecting passengers don't give a hoot which of those they connect through and would have provided the same competition to Houston's connecting traffic as it will by coming through Hobby. Was Miami's international traffic hurt be the establishment of low-fare international service from Fort Lauderdale Airport? No.

[Pleak]

It almost sounds like that analysis was written by United's P.R. department.

In addition to what 19514 said, the article's whole basic premise is wrong. If this is true:

"United's Houston hub is also the third most profitable major airline operation in the country in terms of profit margin, according to Scott Kirby, president of US Airways (LCC_). The golden egg is the vast benefit it brings to Houston's economy."

Then United's shareholders should be suing United for gross mismanagement for pulling down operations at IAH when they have such a stranglehold over the hub.

In reality, these cuts are nothing but the trimming and re-arranging of routes as the merger progresses. They are moving planes all over the system now that they have a much bigger variety in their fleet in order to maximize usage. Nothing wrong with that. But this was planned anyway.

And what non-stop international flights are we losing? One to Auckland which dubiously made sense when Continental launched it as they had no western hub, but now that United has hubs on the west coast - makes no sense and a flight to Morelia, Mexico. And we are gaining non-stop internationals (or competition) to Cancun and a couple of other cities in Mexico and the Caribbean. Doesn't sound like a net loss there.

[Pleak]

Double post..........

Edited June 12, 2012 by Pleak

[ToryGattis]

For some reason, I'm starting to agree with conclusions such as these:

Houston: You Blew It on United Hub

http://www.thestreet...united-hub.html

In my opinion, Houston airplane travelers may have won, but the Houston economy and employees lost out in the long run.

Respectfully disagree. This was written by a stock analyst trying to curry favor (maybe United will grant him Diamond elite status?). He's also probably not happy that it's going to cut into UAL's profitability, thus limiting the stock. And he *completely* ignores all the Latin American tourism we may get coming to Houston as a result of competition and lower fares. The Auckland flight was gone anyway (they had already pre-announced using that 787 on Denver-Tokyo). And some minor United cutbacks in Latin America service are going to hurt Houston's business competitiveness? Please. "You know, we'd grow in Houston with 650 daily United flights, but 600? Nah, unacceptable!" And I'm betting most of those will come back once SWA stimulates lower prices and more demand. Now compare that to businesses who do a lot of Latin America business, whether U.S. companies (or their Latin divisions) or U.S. branches of Latin American companies: "Low fare competition to lots of our destinations? Sold!" They might even consider Houston over Miami!

[lockmat]

I am very open to being wrong. I know my opnion is not among the majority (or nationally?).

It seems like most Houstonians are upset at United and are evaluating this with that same mindset. Many are saying United is reacting like a child and getting back at Houston in a sense. I don't want to ignore the possibility that they are reacting emotionally, but I just don't see it. They are running a business. This is not high school. They are more interested in making money than "getting back" at Houston (unless they can do both).

In my opinion the SWA decision is going to make a legitimate business impact and I believe the recent moves is truly a reflection of that.

It seems most giving "real" reasons for those moves is simply speculation and conjecture. They could be true, I don't know. As of now, I don't think so.

[Andrew Broadfoot]

I am very open to being wrong. I know my opnion is not among the majority (or nationally?).

It seems like most Houstonians are upset at United and are evaluating this with that same mindset. Many are saying United is reacting like a child and getting back at Houston in a sense. I don't want to ignore the possibility that they are reacting emotionally, but I just don't see it. They are running a business. This is not high school. They are more interested in making money than "getting back" at Houston (unless they can do both).

In my opinion the SWA decision is going to make a legitimate business impact and I believe the recent moves is truly a reflection of that.

It seems most giving "real" reasons for those moves is simply speculation and conjecture. They could be true, I don't know. As of now, I don't think so.

Competition is always nice. However, even if this didn't happen I would still fly by the same philosophy. Pick the airline that makes the most sense (for me) logistically and financially. I happen to live downtown so I try to fly out of hobby first and if I can't find a flight there then IAH is next in line.

[Metro]

It remains to be seen which nonstop routes, if any, get pulled by UA. We can only speculate on the impact on planned routes, although one of the graphics in UA's report did show a few unidentified intercontinental routes (trans-Pacific and Atlantic) as future possibilities that could be at risk. The problem comparing the Houston situation with Miami is on a couple of levels. Primarily, MIA has MUCH larger demand to/from Latin America - no other US city is close. So even though FLL competes with Miami, Miami's Latin dominance is large enough to more than offset the competition. And the connecting AA hub at MIA is just an extra benefit, since Miami can support most of its Latin destinations on local traffic alone. This is why even though Houston is arguably the #2 hub city for Latin America, it doesn't have nearly the same capacity or extent of destinations (outside of small RJ destinations in Mexico) that Miami does. Where it gets very risky for Houston is that Houston's O&D (Origin and Destination) traffic numbers are relatively small for a city of its size, and the array of nonstop destinations served from IAH are largely a result of the artificial connecting hub Continental built here. This is similar to ATL and DFW, which are also overserved in nonstop destinations for their city cizes due to large connecting complexes. However, even Atlanta and Dallas have more O&D traffic than Houston - and all of Atlanta's traffic and DFW's international traffic is constrained to one airport. So if United does decide it needs to pull back routes, Houston could very well find the loss of nonstop options that are not supported by O&D numbers alone. Another carrier is not likely to serve a low O&D destination nonstop unless it feeds a connecting hub for them, so nonstop destinations that currently only exist due to connecting possibilities could certainly be at risk of being lost and not replaced. This same situation doesn't exist in other multi-hub cities like NY, LA, the Bay Area, Miami, Chicago, or DC since the O&D traffic is so much greater in those cities that massive connecting fotress hubs aren't as necessary to support their various non-stop destinations.

Edited June 13, 2012 by Metro

[ToryGattis]

As was mentioned before, absolutely nothing changes about United's connecting traffic. Any passenger connecting thru IAH had a dozen other connecting options they could have chosen, including, at some point in the future, Southwest, no matter what cities they decide to use for Latin America service. Here's what changes: United could gouge local passengers on intl nonstops, and thus offer cheap connecting tickets and still have very profitable flights overall. Our city shouldn't really care what connecting passengers are paying, it should care about what our own local citizens have to pay to travel. Opening up competition will help that. And I still believe the lower local prices (which United has to match) will stimulate demand, thus creating more flights overall, inc. from United. They just won't be as profitable for United. In essence, we're forcing United to offer the same discounted fares to locals that they currently offer to connecting passengers, at least to the limited set of destinations Southwest will serve.

BTW, on another note, all of these pro-United arguments have an additional problem that they apply just as well to domestic service as intl service, yet does anybody really believe we'd be better off if we closed Hobby and shut down competitive SWA domestic service?

[Houston19514]

It remains to be seen which nonstop routes, if any, get pulled by UA. We can only speculate on the impact on planned routes, although one of the graphics in UA's report did show a few unidentified intercontinental routes (trans-Pacific and Atlantic) as future possibilities that could be at risk. The problem comparing the Houston situation with Miami is on a couple of levels. Primarily, MIA has MUCH larger demand to/from Latin America - no other US city is close. So even though FLL competes with Miami, Miami's Latin dominance is large enough to more than offset the competition. And the connecting AA hub at MIA is just an extra benefit, since Miami can support most of its Latin destinations on local traffic alone. This is why even though Houston is arguably the #2 hub city for Latin America, it doesn't have nearly the same capacity or extent of destinations (outside of small RJ destinations in Mexico) that Miami does. Where it gets very risky for Houston is that Houston's O&D (Origin and Destination) traffic numbers are relatively small for a city of its size, and the array of nonstop destinations served from IAH are largely a result of the artificial connecting hub Continental built here. This is similar to ATL and DFW, which are also overserved in nonstop destinations for their city cizes due to large connecting complexes. However, even Atlanta and Dallas have more O&D traffic than Houston - and all of Atlanta's traffic and DFW's international traffic is constrained to one airport. So if United does decide it needs to pull back routes, Houston could very well find the loss of nonstop options that are not supported by O&D numbers alone. Another carrier is not likely to serve a low O&D destination nonstop unless it feeds a connecting hub for them, so nonstop destinations that currently only exist due to connecting possibilities could certainly be at risk of being lost and not replaced. This same situation doesn't exist in other multi-hub cities like NY, LA, the Bay Area, Miami, Chicago, or DC since the O&D traffic is so much greater in those cities that massive connecting fotress hubs aren't as necessary to support their various non-stop destinations.

All very interesting. And yet more evidence that Southwest's international service will help grow the international O&D market.

You are quite correct that Houston historically has had pretty low O&D numbers. I don't know why. But I recall years ago reading that is one of the reasons Continental saw so much potential to grow their hub here... because the O&D market had huge room for growth.

And as Tory mentioned above, if it is loss of connecting traffic that is going to kill our routes, the effect on United (and therefore, on Houston) would have been identical whether Southwest's flights are operated out of Hobby, Austin, or even had they been operated out of Bush (which United very dishonestly pretended to welcome with open arms).

Any thoughts on why Houston's O&D traffic is relatively low? That has always struck me as odd. (Currently, it is no doubt at least partially attributable to the monopolistic pricing imposed by United... but not sure that explains the historical pattern.)

[lockmat]

I just thought this might interest some. Seems like it's a program for the airports to save money by increasing air traffic efficiency?

http://www.faa.gov/nextgen/

[LTAWACS]

Im sure it will pique the interest of the airlines.... they are probably scrambling to save as much as they can.

[editor]

Just got this in the e-mail:

---

New Baggage Claim at Hobby Airport is Open

HOUSTON, June 25, 2012 - Improvements continue to arrive at William P. Hobby Airport (HOU), as the new baggage claim operation is opened to the public. The renovated space offers passengers a number of improved features, including new terrazzo flooring, longer baggage conveyors, upgraded lighting and larger restroom facilities.

“We’ve made a commitment to the public to return our facilities to opening day fresh,” says Houston aviation director Mario Diaz. “This renovation goes a long way in living up to that commitment. This is a high-traffic area where customers will definitely notice the improvements, especially compared to the previous layout.”

The construction project began in June 2010, and over the past two years passengers have used a temporary baggage area while the renovated space was being completed. Customers were directed to the new baggage claim area for the first time on June 26, 2012.

It is the same footprint of the original baggage claim area that had been open since the airport opened in 1965. But, the new space is an open concept, making the area look larger and much brighter. Customers will no longer see the green tile flooring and wooden locker facilities that had become synonymous with the prior baggage claim area.

“Hobby Airport has come a long way in a short amount of time. We’ve been able to upgrade the airport in several different areas that have made a huge impact to our customers,” says Ross Underhill, Hobby Airport acting general manager. “Now that the baggage claim area is open, we’ll set our focus on opening the U-ramp up again.”

The completion of the new baggage claim area represents a major step forward in the progression of the $350 million Hobby Airport renovations. So far, there have been new ticket counter spaces added, lobby and artwork.

Ticket Counters: Moved all carriers, except for Southwest Airlines, to renovated space.

Lobby: Remodeled main entryway/lobby and elevator/escalator passageway.

Art: Installed several new art pieces, both inside and outside the airport.

Next up is the opening of the U-Ramp in August, 2012.

---

I guess the theme is "Sugar Land McMansion." It's all so very... beige.

[FIREhat]

I like it. Light, airy, bright, clean, open, just like the new terminal entry. Hobby continues to open its lead on my personal list of favorite airports.

[Andrew Broadfoot]

Wasn't this where the baggage claim before the last baggage claim was?

[Houston19514]

Wasn't this where the baggage claim before the last baggage claim was?

The press release said:

"It is the same footprint of the original baggage claim area that had been open since the airport opened in 1965."

Yes, the baggage claim is in the same place it was before the remodel started.

[JLWM8609]

The press release said:

"It is the same footprint of the original baggage claim area that had been open since the airport opened in 1965."

Yes, the baggage claim is in the same place it was before the remodel started.

They don't fact check much, do they? The airport opened in 1927, and the current terminal opened in 1954.

[yaga]

I saw this on another site and I haven't seen it posted here at HAIF.

Some of the highlights of the presentation:

IAH

Flat growth in domestic aviation in the next 5-10 years

Turkish Airlines beginning service in April 2013

Expect new Asian carrier in the next year and in talks with new Latin American carriers as well.

IAH in despearate need of infrastructure imporevements (electrical and sanitation)

Lack of funds for new terminals and other improvements due to passenger facility charge of $3.00 per passenger which only began in 2008. All other major airports have been collecting this for years and are currently collecting $4.50 per passenger. Mentions Continental was dead set against it. United is showing more flexibilty towards the charges.

Terminal B modernization underway and will resemble Terminal E

Termianl D - alot of corners cut in construction back in 1990. $5 million worth of improvements to accomodate Airbus 380 (new jet bridge, preconditioned air improvements, power connections). Terminal D refresh in the next 6 months to modernize the waiting areas (currently green carperts on the wall!), add new restrooms (at 380 gate, only 4 stalls in each men and women restroom for plane that holds 520 people).

Emirates Airlines has requested to build a 10,000 sq ft lounge and will pay for it but no room in Terminal D.

HAS is working on the new Termianl D Modernization Plan Report and it should be complete in Q1 2013 with ground breaking in 2014. Plans will call for more widebody gates via a pier added onto Terminal D, more restrooms, more concessions and duty free shops, and more lounges.

Add an additional Eco Park Lot on Will Clayton

Major renovations to Airport Marriott Hotel

Mentioned no plans to build any new terminals, only refresh and modernize existing terminals. Terminal A refresh will occur after Terminal D.

New IAH Master Plan Report to be complete by December 2013. Old master plan from 2006 to mirror ATL terminal setup has been "Thrown in the trash". Not feasible, estimated at 20 billion.

HOU

In the process of designing International terminal of 5 gates expandable to 10-11 gates.

New parking garage of 3,000 spaces

Slight growth at HOU with new international service from Southwest. A lot of domestic flights will shift to DAL after the wright amendment expires in 2014 making room for the new international flights and associated connecting flights.

New Hobby Master Plan Report to be completed by June 2013.

[mfastx]

Very interesting watch, watched the whole thing. Really puts things into perspective about how making current investments in infrastructure really pays off in the long run. Intercontinental really needs some improvements, it's embarrassing going to terminal D after coming from somewhere like Amsterdam.

Really looking forward to more improvements at our airports.

[ToryGattis]

"New IAH Master Plan Report to be complete by December 2013. Old master plan from 2006 to mirror ATL terminal setup has been "Thrown in the trash". Not feasible, estimated at 20 billion."

In a previous thread there was some debate about this. This is the presentation I attended.

[mfastx]

"New IAH Master Plan Report to be complete by December 2013. Old master plan from 2006 to mirror ATL terminal setup has been "Thrown in the trash". Not feasible, estimated at 20 billion."

In a previous thread there was some debate about this. This is the presentation I attended.

I was wondering how they were going to be able to keep the terminals and everything open while they were basically constructing a new airport. Apparently it was too difficult and expensive a task.

[Houston19514]

I was wondering how they were going to be able to keep the terminals and everything open while they were basically constructing a new airport. Apparently it was too difficult and expensive a task.

Same way they are completely rebuilding Terminal B while operating flights out of it...phases. Read the master plan. It's all in there.

They no longer anticipate the traffic growth that had been anticipated when that plan was prepared.

[ricco67]

My issue is that they are going by current projections that passenger traffic will be flat.

In this economy, I wouldn't argue that, however once it improves, there is a possibly that it will mushroom and we will be struggling to catch up again.

It would be like building terminal d on a larger scale throughout the entire airportwith little forethought.

[mfastx]

Same way they are completely rebuilding Terminal B while operating flights out of it...phases. Read the master plan. It's all in there.

They no longer anticipate the traffic growth that had been anticipated when that plan was prepared.

I know it can be done, but was it really worth the money? We would to have had to totally reconstruct the entire airport. Including the roads. It's not the same as reconstructing one terminal. I would have liked to have seen it, but right now there isn't really demand for it.

[asubrt]

Apparently a major revision of terminal D is going to happen soon after all...

New GM @iah says major renovation of Int'l Terminal D coming. Details on other changes, 2nite on #KPRC

[asubrt]

Highlights from the news story:

-New general manager of IAH Carl Newman coming from Phoenix Sky Harbor

-$100 million dollar gutting and renovation of terminal D (starting a few years from now)

-Changing and modernization of the blue direction signs along the airport access roads in the next year

-Plans for additional domestic and international destinations

-Some of Terminal B will be completed by next year

Not a whole lot of new info other than the signage and commitment to renovating terminal D (although no start date was given).

[SkylineView]

Thanks for posting Yaga.

[HoustonBoy]

Iah has announced Air China service to Beijing in 2013!

[urban909]

Iah has announced Air China service to Beijing in 2013!

That would be nice, however, nothing has been officially announced by either the airport or the airline.

Edited January 8, 2013 by urban909

[HoustonBoy]

I didn't mean to put announced, I just realized it, but air china has Houston to Beijing service listed and it was taken down 5 days ago. Apparently they do this before they announce new service. It is supposed to start in July. Lets hope it happens!