Nothing at Dulles International Airport has come easy for
United opened its Dulles hub in 1986. At the time, the airport already had two hub carriers. United's growth there was not rapid. Its first international flight, to Frankfurt, did not take off until 1990. To this day, the talk continues that Dulles is too remote to draw many passengers away from Washington Reagan National or from Baltimore.
Nevertheless, United didn't flinch in 2002, when the experts -- and some of its creditors -- recommended closing the Dulles hub. In fact, it endured a nasty battle at the airport with Independence Air, which turned against its onetime partner to launch competing flights in 2004. Quietly, United has poured resources into Dulles, building a significant hub that will have 320 daily departures by the end of November.
United has added 84 Dulles departures in the past 12 months, with 22 more coming by November. Included are nonstop flights to Kuwait and Tokyo, both scheduled to begin in October. United moved the Tokyo flight from New York Kennedy, moved South American flights from Miami and is seeking a Dulles-Beijing route.
By November, the Dulles hub will serve 75 domestic destinations, about two-thirds of them east of the Mississippi, and 22 international destinations, including eight in Europe and six in the Caribbean.
A Hardened Competitor
United has weathered so many challenges at Dulles that one more is barely noticeable, so it's unlikely United will be troubled when
begins Dulles service on Oct. 5.
"We don't find Southwest's entry into Dulles to be terribly big news," says John Tague, United executive vice president. "We are respectful, but not distracted." Initially, Southwest will have 12 daily departures.
In Tague's view, United has proven its critics to be wrong because they underestimated both United's resolve and Dulles' potential.
During the three-year bankruptcy that ended in February, "there were expectations around artificial time frames, but the company was not concerned about the people watching us," Tague says. "Our philosophy was that we should judge ourselves by what we got done in bankruptcy, not how fast we did it."
As for Dulles, Tague says, "Lots of folks critiqued United's structure, asking 'Does United have too many hubs?' People had debates about Dulles.
Earlier, United was viewed as brave in terms of its international aspirations for Dulles. But now it's a different picture. United has proved to the naysayers that Dulles can be successful."
United is widely thought to have the world's best route system, with a strong presence in Asia, Europe and North America. But United has long been weak on the East Coast. It remains the only legacy carrier without a strong New York presence, a problem it sought to address in 2000 by bidding to acquire
. The deal failed in 2001 when Justice Department regulators determined it to be anticompetitive. Operating independently, the carriers were so successful at stifling competition that the following year both filed for bankruptcy protection.
So Dulles remains United's East Coast focal point. Until now, it has often seemed not quite up to the job of being the major East Coast hub for one of the world's two largest carriers.
Battling for Dulles Growth
Dulles and its Northern Virginia home are invariably described in terms of their growth potential. When United announced in 1985 that Dulles would become a hub,
The Washington Post
said the airport "suddenly has become the hottest airport ticket in the East because there is still room" and noted that area growth was strong.
To be sure, since 1986, airport traffic has tripled to 27 million passengers. But little has changed in the language used to describe the airport or the region.
The most recent problem United confronted at Dulles was the nasty end to its relationship with the former Atlantic Coast Airlines, which became Independence Air.
In bankruptcy court, United sought to cut the cost of contracts with regional carriers. In response, Atlantic Coast devised an improbable scheme to change its name and charge low fares while operating high-cost regional jets from a Dulles hub. This experiment cost United millions of dollars in lost revenue before Independence Air shut down in January.
The next month, United emerged from bankruptcy at a flush time for airlines, with high demand for travel and a low supply of seats. Critics continued to question whether United cut costs sufficiently. But the airline's ability to benefit from strong international demand has never been questioned. United's route system is 40% international (by revenue passenger miles), the most of any major U.S. carrier.
By cutting costs for domestic flying, United became better able to feed its international hub at Dulles, Tague notes. "You can't have strength internationally without adequately supporting it, and we found a way to do so without paying a financial penalty," he says. "The result of our restructuring is more competitive capacity not only on mainline but also on express."
The Dulles Hubbub Continues
The debate over Dulles' viability persists, however.
National and Baltimore are more convenient for most local travelers, says consultant Mike Boyd. Independence Air lured passengers to Dulles with below-cost pricing, but once it folded, many passengers went away, he notes. Passenger traffic at Dulles was 20% lower this July than last July, airport statistics show.
Meanwhile, Dulles battles other major East Coast hubs for connecting traffic. Most East Coast connecting passengers pay low fares to fly between the Northeast and Florida, and they are already well-served by hubs in Atlanta and Charlotte. "Dulles is really just a point-to-point airport
where United has been trying to build a hub for 20 years," Boyd says.
But consultant Daryl Jenkins, an area resident, said Dulles is a perfectly suitable hub. Wealthy, growing Northern Virginia provides sufficient local traffic, he says, while Washington obviously needs international flights, which draw connecting traffic. "United has built its presence at Dulles to feed the international flights," Jenkins says. "It's perfectly rational."
As Southwest arrives and grows, he adds, "there will be some overlap with United, but there will be some synergies, too, because people will come on Southwest to connect to the international flights."