United Wants to Return to New York JFK — And Doesn’t Know How to Do It

United pulled out of New York JFK entirely in fall 2015. A year ago the airline’s President Scott Kirby said that was a mistake. Now he wants to return to New York JFK and doesn’t know how to do it.

Scott Kirby, president of the Chicago-based carrier, said United would like to return to JFK but “doesn’t see a feasible organic solution to getting back in there”, a summary of his presentation at the Wolfe Research Global Transportation Conference on 22 May shows. The presentation was not webcast.

Here’s what happened:

  • United left because they were losing money on the only flights they offered at JFK
  • But the airline’s bean counters looked only at revenue and expense for the those particular flights and missed the bigger revenue picture — lucrative corporate contracts which made other routes profitable, and which they lost without the JFK flights.

Kirby said last year,

“The real reason it was a mistake was it let American Airlines in particular go win a bunch of big corporate accounts,” he said. “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.”

…Many of the corporate contracts were unusual because the companies cared less about pricing than typical businesses, Kirby said. Actors, for example, usually must fly in premium cabins — regardless of whether the fare is $1,000 or $10,000.


United Dominates New Jersey

Newark isn’t New York — New York Mayor Fiorella LaGuardia once refused to get off a plane at Newark Airport, because his ticket promised he’d travel to New York. He was at the time pushing for construction of what became LaGuardia airport (the very first airport lounge was opened at LaGuardia converting the mayor’s private office there). It’s more convenient to parts of the city, however.

Their market share in New York has fallen from 30% down to 23% since Continental and United first merged. Still Kirby said last year that their New York margins are higher than their competitors because they’re still the largest carrier in the metropolitan area. He claimed United had a 15% margin in New York compared to 4% for Delta, with American somewhere in between — something it accomplished while barely competing at JFK.

Two years ago the FAA dropped the ‘temporary’ level 3 slot controls at Newark that went into effect in 2008. Now other airlines can fly in and out of the airport as long as they can get access to gates.

Ironically the problem United now faces is that they can’t get back their old slots and gates at New York JFK. They sold their slots to Delta. And Alaska has moved into some of the space they were operating out of in the airport.

New York is the most important air travel market in the country, and the premium New York West Coast routes the most important as well. There was a time of course that an airline could be number one coast-to-coast out of Newark…

Kirby has effectively admitted that Newark may be convenient enough to New York but it isn’t all that’s needed.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. “Kirby has effectively admitted that Newark may be convenient enough to New York but it isn’t all that’s needed.”

    Does he mean that UA also needs to be competitive in (at least) major markets — like JFK, for example — as well as in soft product and pricing is also needed? Or would that simply be delusional?

  2. maybe they can bribe another port authority official for slots….they can come up with a flight to the hamptons to shuttle some freeloader on weekends….it seemed to work for them (for a while) and smisek didn’t do too bad either from the ordeal, he is still counting the money that was hidden in his parachute

  3. United keeps talking about how business travelers won’t fly on RJ’s when they can fly on real jets instead. Yet, all they do is talk – no action. Who wants an RJ to Washington or Atlanta or Chicago from New York? NOBODY.

    I could get fired up about United….but I quit United I 2013 so now I really don’t care. Good luck Scott

  4. But United has said that Newark is the #1 New York airport experience. So they lied? *gasp*

  5. This is what I have been saying for YEARS. In the meantime, they should immediately start flights from ISP to IAD and ORD, to save the business they are bleeding from Long Island from people who wont drive to EWR, and don’t want to deal with the BS LGA is, and will be for the next infinite number of years. Next, did AC give up THEIR slots at JFK as well, or do they hold on to them? Can UA get the ones AC is not using?

  6. I have to laugh at this. 8 years ago Tilton was running United and wanted to merge the company in order to get a huge golden parachute. The only CEO he would allow to run the company was Jeff Smisek. So Smisek cuts CLE which was a huge mistake and now most of that capacity was back filled by all other carriers within weeks.
    He cut 100 flights from LAX which allowed AA to become the biggest carrier there.
    And he sold all 18 valuable JFK slots to Delta in exchange for EWR slots that are now worthless since anyone can fly into EWR if they can get a gate.
    United was the #2 carrier and now is #3.
    Smisek was the best CEO that American Airlines could have asked for.

  7. Why not just do what Delta did at Love Field and squat on some gates. Chances are it will be years till they get kicked out.

  8. Short of buying (or maybe swapping) slots or gates with another airline (too bad those two gates at Dallas Love Field are no longer available to offer Delta in exchange for some slots at JFK along with a pair of gates at Delta’s vastly under utilized Terminal 2…) looks like United is “SOL” at JFK…

    …then again, with Alaska’s recent announcement that it’s closing down the ex-Virgin America pilots’ base at JFK, and shifting the 100 pilot jobs that goes with it out west in September, who knows (?)…

    …it just might turn out that Alaska might have some surplus slots, plus a gate/shared gates at United’s former home in the British Airways Terminal (T7), in the not too distant future seeing how CNBC also reported that with the closure of the ex-Virgin America pilots’ base, Alaska Airlines might also cut the transcon frequencies that Virgin America operated from NYC to LAX/SFO down to just 2x daily vs the much more robust schedule Virgin had in recent years…

    …otherwise, I guess buying Jetblue would offer slots and a terminal to boot, but that’s pretty far fetched! 😉

    One thing’s for sure – it’s hard to imagine Alaska being willing to sell/lease any potential surplus JFK slots to arch rival Delta given the bad between those two airlines in recent years – unless of course Delta also made an offer Alaska can’t refuse for those two coveted gates at Dallas Love Field that Delta would love to get its hands on that also includes the JFK slots, too, as a means of keeping United out of JFK!

    But, those (likely to be surplus) Alaska Airlines slots post closure of the pilots’ base sure to seem to likely loom large – perhaps by years’ end, too!

    So, Scotty K., maybe you should get that check book open and ready – and who knows…you might just find a way to claw your way back into JFK after all!!!

    Ah, the intrigue…

    Stay tuned!

  9. OK…clearly an outlier. I prefer JFK on DL if I’m connecting, but if NYC is my destination, I’ll take EWR over JFK or LGA all the live long day.

    If Penn weren’t an absolute cesspool, I’d have zero complaints at all.

    Of course, if I had a black car waiting for me at JFK, I might feel differently.

  10. I live in New Jersey, and work in NYC. The reality is that EWR is still more convenient than JFK for a lot of people living in NYC. It really depends on “where” in NYC you live. JFK is just a nightmare to get to for many people. I still fly out of both, but obviously prefer EWR, and will pay a premium to do so.

    As for United Vrs JetBlue in JFK – I don’t see how United wins that battle. I have a flight early this morning, and the only reason why I chose United is because with a free checked bag, and free priority boarding, the basic economy price on a relatively short flight(2 hours and a half) made a lot of sense. It was Spirit levels of cheap, and I could accrue some easy United miles to use for International travel. Put United in JFK, and they have customers who look towards AA and Delta miles, and most likely already have the same perks I do with their two chosen airlines. Which leaves JetBlue, which all things considered is ALWAYS the superior choice, if the prices are similar. I just don’t see United doing well.

  11. Kirby is an imbecile. He has easily spent enough time in Manhattan to understand the travel dynamics for 8 million New Yorkers – millions of whom detest Newark (not to mention the millions of O/D visitors who understand that JFK is far more convenient to uptown and midtown. This was an easy call and he blew it.
    As for “getting back in” the reasoning is absurd. Anything can be done at a price and there are always opportunities – it just takes a dealmaker with vision.
    I guess the bottom line is those of us stuck in a UA hub can at least have a little optimism that UA will eventually return to JFK, but nobody will be holding their breath.

  12. Is JFK super important because it’s closer to nicer suburbs where the middle manager types that have to travel live?

    United has also all but pulled out of the Northwest. They used to have relatively large presence in Seattle and the surrounding small cities pre-merger.

    It was just Alaska to many PNW destinations for a couple of years before Delta expanded here and essentially copied United/United Express old network.

  13. @Howard Miller —> you wrote:

    1) “…then again, with Alaska’s recent announcement that it’s closing down the ex-Virgin America pilots’ base at JFK, and shifting the 100 pilot jobs that goes with it out west in September, who knows (?)…”

    2) …it just might turn out that Alaska might have some surplus slots, plus a gate/shared gates at United’s former home in the British Airways Terminal (T7), in the not too distant future seeing how CNBC also reported that with the closure of the ex-Virgin America pilots’ base, Alaska Airlines might also cut the transcon frequencies that Virgin America operated from NYC to LAX/SFO down to just 2x daily vs the much more robust schedule Virgin had in recent years…

    Closing down the pilots’ base doesn’t [necessarily] mean any change in service. That said, I have no idea what CNBC report you’re referring to. What *I* read on CNBC — see https://www.cnbc.com/2018/05/15/alaska-airlines-plans-to-pull-its-planes-and-pilots-out-of-new-york.html — said, “Alaska offers 14 flights a day to JFK and the company says it will add another in July.”

    It wouldn’t make sense from a “transcontinental” standpoint for AS to cut back service. It also would hurt any international connecting travel, thus limiting the value obtainable through MP. What AS *does* need to do, however, is UP their transcon game, not cut it back. They are (roughly) fifth in their F/J class soft product, behind Mint, DeltaOne, AA and UA — now that they’re planning to re-do VX’s F into the lesser AS product.

  14. Untied Airlines is a pathetic company
    Giving up First Class deserves the idiot award
    Giving up JFK slots beyond stupid idiot award of the century

  15. @Howard Miller —> Closing a pilot base doesn’t mean any reduction of service. I know you wrote, “Alaska Airlines might also cut the transcon frequencies that Virgin America operated from NYC to LAX/SFO down to just 2x daily vs the much more robust schedule Virgin had in recent years…” HOWEVER…

    1. CNBC — https://www.cnbc.com/2018/05/15/alaska-airlines-plans-to-pull-its-planes-and-pilots-out-of-new-york.html — wrote this: “This was a difficult decision — but a necessary one — based on the need to match our pilot staffing with the geographic areas on the West Coast where we deploy our aircraft every day. All of our JFK-based pilots are being offered the opportunity to transfer to either Los Angeles or San Francisco,” a spokesperson for the airline told CNBC via email. Alaska offers 14 flights a day to JFK and the company says it will add another in July. (I draw your attention to the last sentence — not a cutback in service at all.)

    2. USA Today — https://www.usatoday.com/story/travel/flights/todayinthesky/2018/04/04/alaska-airlines-adds-new-nyc-route-amid-virgin-america-integration/484977002/ — wrote, “Alaska Airlines will add a new non-stop route between California and New York and bolster its existing New York service from its biggest hub in Seattle.

    The new route will connect San Jose and New York JFK. Flights begin July 6, with Alaska Airlines offering one daily round-trip flight on Airbus A320 aircraft.

    “From Seattle, Alaska is adding a third daily round-trip flight to JFK. The carrier says the early-morning flight will give customers “convenient access to a combined 10 daily flights to top global destinations across Europe” via Alaska’s line-up of partner airlines. The extra Seattle round-trip also starts July 6 and will be on A320 aircraft.”

  16. @Boraxo, It was Jeff Smisek that gave up JFK, not Kirby. Similarly if United care about corporate contracts they should probably return to Oakland as well, would help them to qualify as #1 carrier of choice for several Bay Area companies.

  17. Disney was one of UA’s largest accounts. Losing exclusivity had to be blow both to image and revenue, and a wakeup call.

  18. UA can slowly build at JFK. First, LAX and SFO. Then some of the hubs, like ORD and IAH. DEN could be served with one daily flight at first. LHR maybe next. 2 gates at first to an eventual 4-6 gates. Could T1 have space? How about VX’s old T4 gates? Or bus gates from T1? Tower Air’s gates???

  19. At the time they were bribing Port Authority officials via unprofitable flights. They were also bribing Christie officials by flying into AC. Part of those bribes included getting PATH extended to the Newark Airport train station, allowing them to market direct access from Wall Street to the airport.

    That project was originally scheduled to be completed….oh, right about now.

  20. @Nick – Nothing UA could do would make me happier than resumption of the oil express between OAKIAH, and would love to see DEN & ORD as well. But nobody has the cojones to take on WN, which is charging fortress prices @OAK.

  21. where is henry LAX to polish this turd of a UA decision? waiting with baited breadth…

  22. > But nobody has the cojones to take on WN, which is charging fortress prices @OAK.

    This is true. With the new schedule open, we’re buying flights for Thanksgiving on WN out of SFO instead, saving > $100 per ticket.

  23. In the FWIW Mode, here’s a price comparison, from all three Bay Area airports (SFO, OAK, SJC) to all three New York airports (JFK, LGA, EWR) — all non-stops — Tuesday, 9/18 through Saturday 9/22, roundtrip (not including red-eyes; NOT including “basic” economy).

    Alaska: as low as $244 Main Cabin; $1,388 First
    American: $313 Main Cabin; $2,217 Business; $2,407 First
    Delta: $313, Main Cabin; $2,116 DeltaOne.
    Southwest: $260 (all flights are to LGA, are one-stop, and may or may not incl. plane change). Flights to EWR are more expensive.
    United: $293 Economy; $2,130 Business.

    So, Mr. Kirby, WHY should I fly United?

  24. JFK is so, so important to UNITED. OUR STAR ALLIANCE PARTNERS ARE THERE AND WHERE ARE WE ?? INTERNATIONALFLIGHTS, WHY NOT, AND MORE IMPORTANT, DIVERSION AIRPORTS. IN BAD WEATHER JFK COULD TAKE FLIGHTS AND STILL BUS POEOPLE, BUT NOT FROM BOSTON, AND DULLES>

  25. Mr Kirby should call his former airline – American has JFK slots they aren’t fully utilizing.

  26. What a MORON Kirby and the rest of UAL’s mgt are.As an employee who’s life was affected by the idiots at the top of UAL,they should loose ‘their’ jobs!

  27. UAL is doomed. They treat their employees like crap, similar to USAir, god rest their soul. Moving out of JFK was a bad move and they know it now. I flew out of there for ten years and it was a great, lucrative place. LaGuardia, however, is an embarrassment to New Yorkers. What a pit! Same ugly place it was 30 years ago.

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